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Another tailspin for Boeing helped send the Dow Jones Industrial Average briefly sliding more than 350 points Tuesday, but blue chips edged off lows just before the close to limit losses to 0.6%. Meanwhile, Spirit Airlines (SAVE) plummeted on the rejection of a proposed merger between it and fellow U.S. carrier JetBlue (JBLU).
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As the Dow tripped up, a few of the Magnificent Seven megacap techs helped limit the Nasdaq’s drop on the stock market today. The composite index dipped 0.2% lower by day’s end, significantly trimming intraday losses, after climbing almost 3.1% last week.
Weekly charts show bullish action in the Nasdaq and other leading indexes. The Nasdaq, for now, has refused to bow below its rising 10-week moving average. The same is true for the bellwether S&P 500, down 0.4% at the close of trading Tuesday but still within striking distance of an all-time high.
At 37,245, the 30-stock Dow Jones index is now down a little more than 1% for the year after gaining 13.7% in 2023. But Boeing (BA) — still trying to regain investor confidence as it deals with manufacturing defects in its 737 MAX 9 series of passenger jets — has dropped below its 200-day moving average, a key technical level and a sign of the stock’s severe near-term weakness.
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In The Dow Jones Industrials
Boeing, which plunged nearly 8% in massive volume on Tuesday, has fallen 23% since Jan. 1 and dropped more than 7% below a 243.10 buy point in its recent cup base. When a leading stock falls 7% or more from a breakout level, it triggers the No. 1 rule to guard a portfolio from serious risk.
By contrast, Boeing rival Airbus (EADSY) is still up for the year despite a 2.2% decline in heavy turnover. Airbus stock has climbed as much as 11% after launching past a 36.73 proper buy point in a nearly four-month double-bottom pattern.
Elsewhere in the stock market, the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) slipped mildly for most of the session, then finished nearly at the break-even mark Tuesday.
Meanwhile, megacap tech leader and Dow Jones component Microsoft (MSFT) edged 0.5% higher after a handsome 5.6% gain last week.
Also nicknamed Mr. Softy, the cloud computing and enterprise software titan remains in a 5% buy zone after lifting past a 384.30 base-on-base pattern. Microsoft reports fiscal second-quarter results for the December quarter on Jan. 31 after the close.
Microsoft boasts a strong 97 Composite Rating on a scale of 1 to 99, according to IBD Stock Checkup.
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MarketSmith 250 Member Rises
Outside the Dow Jones index, MarketSmith Growth 250 member Elastic (ESTC) rose 3% on top of big gains last week. The database software specialist has been forming a flat base after zooming sharply in November on strong quarterly results. The key chart pattern flags a 118.42 buy point.
Elastic got some airtime in Tuesday’s IBD Live show.
The company turned profitable during the fiscal year ended in April 2023 in which it earned 25 cents a share. That’s a bullish reversal from a net loss of 33 cents in fiscal 2022.
Of late, the Mountain View, Calif., midcap has seen top-line growth slow some, from 43% during the quarter ended in January 2022 to a 17% gain in the past three quarters each time. In its fiscal second quarter that ended in October, revenue rose 17% to $310.6 million. However, over an eight-quarter period, the top line has grown on average a hefty 26% vs. year-ago levels.
Mutual funds owning the stock have steadily increased their position as well, going from 531 at the end of calendar year 2022 to 581 as of the fourth quarter last year.
What’s more, Elastic’s executives are big diners on their own cooking. According to MarketSmith data, Elastic management owns 18% of the 99.6 million shares outstanding.
The stock has gained more than 40% since it traversed past an 84.04 correct entry within a large, first-stage cup with handle during the week ended Dec. 1.
Beyond Dow Jones: More Financial Markets News
Among IBD’s 197 industry groups, toy, solar, airline, gold and silver, oil royalty trust and home furnishings retailing stocks led the downside. These groups backtracked 2% or more on a price-weighted basis.
But retail auto parts, fabless chip, health care services and fiber-optic telecom gear stocks showed oomph with gains of 1% or more.
Meanwhile, crude oil futures finished weak, falling 1.1% to $71.91 a barrel on the Nymex.
Gold futures fell 1% to $2,031 an ounce as the U.S. dollar strengthened to $1.0872 per euro.
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