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The major indexes just edged lower. It was another quiet session on the major indexes, with Fed minutes having little impact. META stock, Google parent Alphabet (GOOGL) and Salesforce.com (CRM) offset generally weak breadth.
Meta Platforms (META) launched Instagram’s Twitter rival Wednesday evening, quickly getting several million sign-ups. The Instagram Threads app debuts amid ongoing issues for Twitter, now owned by Tesla (TSLA) CEO Elon Musk. Meta shares rose in extended trading.
GOOGL stock and Salesforce flashed buy signals Wednesday. Meanwhile, MercadoLibre (MELI) is on the cusp of an early entry.
META stock is on IBD Leaderboard. Google stock is on SwingTrader. Google was Wednesday’s IBD Stock Of The Day.
The video embedded in this article discussed Wednesday’s market action and analyzed Google, Monday.com (MNDY) and Flowserve (FLS).
Dow Jones Futures Today
Dow Jones futures were 0.4% below fair value. S&P 500 futures fell 0.4% and Nasdaq 100 futures declined 0.5%.
The 10-year Treasury yield crept up to 3.95%.
Hong Kong’s Hang Seng tumbled 3% intraday, amid real estate developer woes.
At 8:15 a.m. ET Thursday, investors will get the ADP Employment report for June. At 8:30 a.m., the Labor Department will release weekly jobless claims, with the June ISM services index due at 10 a.m. ET. Friday morning, the Labor Dept. will reveal its June jobs report.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
What Is Meta’s Instagram Threads?
Meta’s new text-based Threads is touted as a place where you can “follow and connect directly with your favorite creators and others who love the same things,” according to an App Store description. The Threads app shares many features with Twitter. It lets users “like” a post, reply or repost it. Search capabilities are limited.
Meta Platforms launched its text-based Threads app at 7 p.m. PT Wednesday, moved up 12 hours from a planned 7 a.m. PT Thursday debut.
Meta CEO Mark Zuckerberg launched Instagram Stories in 2016 to take on Snapchat, owned by Snap (SNAP). Instagram Reels, unveiled in 2020, targets after TikTok.
Other would-be Twitter rivals, such as Mastodon and Bluesky, have gained users, but have not yet become major threats. The Threads app, launching with a number of celebrities and other high-profile users, should be able to attract mass users quickly. After four hours, Threads had more than five million sign-ups, Meta CEO Mark Zuckerberg said overnight.
It’ll join an ecosystem with more than three billion daily users of at least one of Meta’s apps — Facebook, Instagram and WhatsApp.
Since Musk took over Twitter for $44 billion last year, the social site has alienated advertisers and many users over a variety of issues. In the past week, Twitter has imposed limits over how many tweets that users can read. This “rate limit,” which allegedly is to crack down on unauthorized data scraping and bots, affects non-verified users more.
Meta Stock
META stock popped 2.9% to 294.37, hitting a 17-month high. It’s well extended from any possible buy point. Meta Platforms rose 1% in after-hours trade.
Stock Market Rally Wednesday
The Stock Market Rally saw slim declines on the major indexes, with small caps losing a little more. Fed minutes from the June 13-14 meeting, offered few surprises. While pausing rate hikes at that meeting, Fed officials favored more tightening. That’s something Fed chief Jerome Powell and other policymakers have stressed since then.
The Dow Jones Industrial Average fell 0.4% in Wednesday’s stock market trading. The S&P 500 index and Nasdaq composite lost 0.2%. The small-cap Russell 2000 slumped 1.3%, ending a six-session win streak.
U.S. crude oil prices rose 2.9% to $71.79 a barrel. Saudi Arabia signaled it’ll do what it takes to prop up prices. That comes after it announced Monday that it would extend a voluntary production cut by another month, through August.
The 10-year Treasury yield jumped 9 basis points to 3.94%, a four-month high.
Amid rising U.S. Treasury yields and weak economic data in Europe and Asia, the U.S. dollar rose modestly, right around key levels.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) closed fractionally higher with CRM stock a major component. The VanEck Vectors Semiconductor ETF (SMH) slumped 1.9%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slipped 0.35% and ARK Genomics ETF (ARKG) declined 0.65%. TSLA stock is the No. 1 holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) slumped 1.8%. U.S. Global Jets ETF (JETS) climbed 0.3%. SPDR S&P Homebuilders ETF (XHB) declined nearly 1%. The Energy Select SPDR ETF (XLE) slipped 0.55% and the Health Care Select Sector SPDR Fund (XLV) closed just below break-even.
The Industrial Select Sector SPDR Fund (XLI) fell 0.5%.
The Financial Select SPDR ETF (XLF) lost 0.2%. The SPDR S&P Regional Banking ETF (KRE) gave up 1.3%.
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Google Stock
Google stock rose 1.5% to 121.75, rebounding from the 10-week moving average and breaking a downtrend in a short consolidation. Shares also cleared the 21-day line. Investors could use the 21-day line, or the June 30 high of 121.08, as a specific entry. GOOGL stock is on track to have a new base after this week.
Salesforce Stock
CRM stock climbed 1% to 213.82. Much like Google, Salesforce rose off its 10-week line and broke a short downtrend. The stock has a 225 buy point from a flat base, amid several weeks of tight weekly closes, according to MarketSmith analysis.
MercadoLibre Stock
MELI stock jumped 4.5% to 1,247.36. Volume was above average and picked up as MercadoLibre stock revved higher. Shares of the Latin American e-commerce and payments giant cleared its 21-day moving average decisively for the first time in a month and broke a short downtrend. But MELI stock stopped just short of the 50-day line. A clear move over the 50-day would offer an early entry. MercadoLibre stock is working on a 1,365.64 buy point.
Keep in mind that MELI stock suffered a number of declines in above average volume over the past several weeks.
Market Rally Analysis
The major indexes fell slightly Wednesday after slim gains Monday. Meta Platforms, Salesforce, Google stock and some other megacaps muted broader losses elsewhere.
Decliners outpaced advancers considerably Wednesday, but many losers showed little damage. Generac (GNRC) and Aehr Test Systems (AEHR) were exceptions, tumbling 8% and 11% in heavy volume.
The Invesco S&P 500 Equal Weight ETF (RSP) declined 0.4%, pulling back from its best levels in more than four months.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.3% vs. a flat Nasdaq 100.
Steelmakers, base metal miners and casinos had a tough day. Some software leaders lost ground, but many came off intraday lows. Medical products firms had another rough session.
Travel plays generally did well, or at least held up. So did industrials.
After the Market Rally rebounded last week, stocks are hesitating at pre-pullbacks. A longer pause or slight decline over several days or weeks could be constructive for the stock market rally. The Nasdaq composite closed 7% above its 50-day moving average, with the Nasdaq 100 7.9% above that key level. Those aren’t extreme levels, but they aren’t far from being so.
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What To Do Now
The market rally is going to do what it’s going to do. But investors may want to be cautious about adding much exposure in the short term, given the highs odds of sideways action or a renewed pullback.
In any case, there weren’t too many stocks flashing buy signals on Wednesday, aside from Google and CRM stock.
Plenty of stocks are hovering around buy areas in a variety of sectors, even if many retreated Wednesday.
Work on those watchlists.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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