Investors minimized their losses on Thursday, as the three main indexes ended almost at break-even by the market's close. Financial, retail, and technology stocks led the initial decline after three consecutive up sessions for the Nasdaq and S&P 500, then stabilized. Bargain hunters took advantage in the small-cap sector of the stock market today.
Stocks Hold Steady in Quiet Session; Burlington Stores, Boston Scientific, Vertex Inc. in Focus The Nasdaq composite fluctuated between positive and negative territory before finishing the day slightly down—losing just under 11 points, falling short of a 0.1% dip. It managed to stay above the 20,000 mark. The S&P 500 also edged marginally lower, losing a bit more than two points, amid narrow range trading.
The Dow Jones Industrial Average managed a modest gain of less than 29 points, extending its winning streak to five sessions. Two components rallied by at least one point: Honeywell (HON) and UnitedHealth (UNH). UnitedHealth is part of the IBD Long-Term Leaders list.
Honeywell, the diversified industrial giant, added 1.6% for the week to create a base-on-base pattern with a 242.77 buy point.
Trading volume climbed from Tuesday's half-day session on both major exchanges. After Thursday, only three trading sessions remain in 2024.
Additionally, the Russell 2000 surged more than 0.9%, a bullish move as the small-cap index quickly recovered from early losses of nearly 0.9%.
Notice on a daily chart, however, that the Russell 2000 still trades well below its 50-day moving average, which had been climbing rapidly since late October but has recently slowed.
Long-Term Leaders: Will UnitedHealth Stay on the List?
3:30 p.m. ET SoundHound Shines One standout on Thursday was SoundHound AI (SOUN), where aggressive traders drove the stock to new highs. A key player in sound-based artificial intelligence technologies for corporate customers, the midcap growth stock surged in festive volume, reaching a session high of 24.98.
Shares have tripled since bullishly breaking past resistance at 6.45 in November. SoundHound AI is now significantly extended from any IBD-style buy point. Shares could rapidly decline after their near-vertical rise.
The Santa Clara, Calif., firm hasn't yet shown an annual or quarterly profit. The net loss shrank in 2023 to 29 cents a share vs. a year-ago 59-cent loss. For this year, analysts see the net loss sinking to 25 cents per share. Meanwhile, revenue has grown rapidly, up 81% in Q4 2023 and 73%, 54%, and 89% in the first three quarters of this year.
- Total revenue over the past four quarters exceeded $67 million. According to FactSet estimates on MarketSurge, revenue is expected to rise 97% in the current quarter to $33.7 million, then climb 196% in Q1 2025, 179% in Q2, and 70% in Q3. The next four quarters are expected to total $148.3 million in revenue.
- Long-term debt to equity in 203 was very high at 299%. However, mutual fund sponsorship grew from 137 funds at the end of 2023 to 169 in Q3 this year.
- Watch This Blue Dot Meanwhile, keep an eye on these three stock market leaders: Adtalem Global Education (ATGE), Ralph Lauren (RL), and cybersecurity leader Fortinet (FTNT). Why?
All three recently received a "blue dot" alert on the MarketSurge platform, indicating they are outperforming the S&P 500.
The 2025 Stock Market Outlook
The biggest stock market winners often outperform major indexes before breaking out and going on spectacular runs, rewarding chart-reading investors.
Adtalem, up 1.2% on Thursday, is building a flat base with a 92.93 buy point. Shares have risen more than 20% since crossing a trendline entry near 76.50 on October 30, when it reported fiscal Q1 results.
This post-secondary education provider has reported 5%, 33%, 33%, and 39% earnings-per-share growth over the trailing four quarters. The Zacks Consensus Estimate projects an 18% bottom-line jump. Estimates place fiscal 2025 full-year earnings at $5.89 per share.
On January 30, Adtalem shares dropped over 18% after a quarterly report failed to meet Wall Street's expectations.Fiscal second-quarter earnings ending in December rose 5% to $1.23 per share, a meager gain versus an 8% revenue rise that reached $393.2 million. However, the Chicago-based organization has since shown strong performance, with earnings up by 33%, 33% and 39% respectively in the next three quarters from then, with revenues being up by 12%, 12%, and 13% respectively. In the broader market context, Boeing's stock has increased in value slightly at low trading volumes, presenting an opportunity for investors. Boeing, which has had tough times in the aerospace and defense industry in the last five years, announced a firm order from Pegasus Airlines for 100 737-10 airplanes, with options for up to 100 more jets, on December 19.Pegasus primarily serves Turkey and neighboring Middle Eastern countries.
Boeing stock, troubled by market share loss due to two tragic 737 Max crashes, labor disputes, and quality control issues, still trades nearly 60% off its March 2019 peak of 446.01. Recently, however, it is on track for gains in five of the past six weeks.
This rebound has lifted Boeing to within 8% of a near-term high of 196.95.
In other words, the stock has been building a new base for months. If Boeing maintains recent gains and approaches that July 31 high, it could set up a breakout and new buy opportunity.
Arguably, Boeing is forming a bottoming base since its sharp decline to a low of 89 in March 2020.
Fundamentals have been poor at the Chicago-based aerospace giant. Over the past four quarters, it posted a cumulative net loss of $14.94 per share, according to MarketSurge. Analysts, however, forecast a major turnaround in 2025, expecting earnings of $1.20 per share.
Boeing has 747.2 million shares outstanding and a $135 billion market value, almost one-tenth of tech leader Broadcom (AVGO)'s value, currently a stock market leader.
11:53 a.m. ET Nasdaq Holds Lead Over S&P Through Thursday, the Nasdaq held a strong lead over the S&P 500 in the year-to-date rally, up 33.3% vs. 26.6% for the latter. The Russell 2000, at 2,271, gained 12% but still lags behind the large caps.
Among megacap techs, Meta Platforms (META) showed some sluggishness seen among select techs so far in December. Both Meta, a major Leaderboard holding, and the Nasdaq have risen significantly in 2024. Still, the social media giant hasn't seen much lift since breaking out of a flat base with a 602.95 buy point.
Meta maintains excellent IBD ratings, including a 96 Composite Rating and an 88 Relative Strength Rating.
The Nasdaq-listed leader has also rebounded well during recent pullbacks to and below the 50-day moving average. At its year-to-date peak of 638.40, Meta has gained as much as 80%. This is an astounding gain, considering the stock surged 194% in 2023.
10:39 a.m. ET Bonds Hit Stocks Again? Sellers once again dominated the government bond market, driving yields higher. Rising money costs can dampen consumer spending.
The U.S. Treasury 10-year note yield jumped four basis points to its highest level since May 29. Meanwhile, ProShares UltraShort 20+ Year Treasury (TBT) gained ground, clearing a cup-with-handle entry at 35.66. This ETF is designed to rise when Treasury bond prices fall and yields rise, delivering twice the Barclays 20+ Year U.S. Treasury Index's move.
Within the Dow Jones industrials, keep an eye on Home Depot (HD). The home improvement chain recently cut through the 50-day moving average and fell below a 421.56 breakout point.
The golden rule of IBD-style investing is to keep losses minimal in every trade.
Home Depot has underperformed large-cap indexes, rising 13% since January 1. Its Relative Strength Rating of 67 is mediocre. Earnings are expected to dip 1% in the fiscal year ending in January, then rise just 4% in the next fiscal year.