Nasdaq Breaks Support As Staples Rally; Pepsi, Halozyme, Expedia In Focus

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0:24Ken Shreve:Hey, good afternoon, everyone, and welcome to Stock Market Today for Tuesday, February 3rd. My name is Ken Shreve. On today's show, well, not too bad a day for the Dow Jones Industrial Average and Russell 2000, but quite a different story for the NASDAQ composite and NASDAQ 100 today as tech stocks, specifically software and semiconductor stocks. A tough day of selling in that area of the market. S &P 500 also under some selling pressure today. Looks like we got distribution days for the NASDAQ and the S &P 500. Before we get into all of that, let me bring on our news editor, Ed Carson, who's going to talk a little bit about this rotation out of tech stocks today.

1:07Ken Shreve:He's got three stocks to watch. Good afternoon, Ed.

1:09Ed Carson:Good afternoon. and want to talk about one of the winners, the moose shift in the staples, and that would be Pepsi. Also, Biotech Halozyme, and then a loser, Expedia.

1:19Ken Shreve:Yeah, I'm looking at some big top percentage gainers in the NASDAQ 100. Today, I'm seeing PepsiCo, seeing Walmart, Fastenal, not your usual large-cap NASDAQ 100 tech name. So let's start by taking a look at the indexes and see how we ended up today. And we'll start by taking a look at the NASDAQ composite under a lot of pressure for pretty much all day, but it managed to close a little bit off lows. We saw some buyers come in, lifted the NASDAQ off lows, did close below its 50-day moving average, closing loss of 1.4%. It looks like volume did pick up the pace a little bit. This is going to be the fourth distribution day in five trading sessions for the NASDAQ composite.

2:15Ken Shreve:So seeing a little bit of clustering of distribution for the NASDAQ. Check in on the S &P 500, not down as much as the NASDAQ. That ended with a loss of eight-tenths of a percent or so. Did touch its 50-day moving average. That also closed off lows. Looks like volume was just a little bit higher. Close call, a little too close to tell right now. But selling in the Russell 2000 and Dow Jones, really not too bad today at all. The Russell 2000, that is looking like it is going to be flat. Let's check IWM here. That is a little more up to date. IWM is, yeah, that looks like it's going to try to eke out a small gain today.

3:00Dow Jones Industrial Average, that is basically just down a little bit today.

3:09Ken Shreve:So, Ed, really just all about tech stocks today. We saw the NASDAQ under pressure, but really the selling in software, this has been a story going on for some time today. Pretty nice earnings from Palantir, but IGV, this is sort of our benchmark software ETF, that was down another 4.6 % today after a very rough January. And then that VanEck semiconductor ETF SMH didn't do much better, down 2.5 % today. So tough day for the NASDAQ.

3:45Ed Carson:Yeah, I mean, obviously, software is just a lot of trouble, a lot of concerns that AI software will either replace what software does or that there'll be so many job cuts that fewer people will be buying the software. There'll be fewer seats, you know, as it were, license seats. Part of the issue is that, yes, I mean, there's definitely division. I mean, is this a market retreat? Great is the market rotating into other things. We'll look at some of the other ETFs, but it's like, that's unclear. And it's also day by day. I mean, okay, the NASDAQ found support and yesterday there was a big bounce.

4:14Ed Carson:You know, late last week, we faded. And then, okay, we've got to bounce when we needed to. And then we come right back down. And the S &P, oh, it's better, but doesn't look great either. I mean, if you were buying off of yesterday, you were probably disappointed simply off of the S &P and NASDAQ. uh you say the dow the russell um you know look a different story it's still not it's just it just makes it tricky it's like what's going to lead is the market going to go up it's like you know why we talk about market trends is because if the market is trending higher it will tend to trend higher i mean i mean it just sort of like technology but it's like so when you buy it it'll keep doing that but if in this kind of market where not just the last few days but the last several weeks, even several months for the NASDAQ, we're sort of in a range and you can't count on a day's gain leading to another gain the next day.

5:07Ed Carson:So it just makes it difficult. If you've got something that has a nice gain, okay, the day-to-day fluctuations may not be so bad, but anybody buying recently, it's just tough. A lot of those things are going to fail or at least shake you out. But that also being said, RSP doesn't look so bad. That's again, if you're stripping away the techs, you know, some of the mega techs, RSP looked, you know, it's like basically at record highs, you know, so that one looks almost as good as anything.

5:39Ken Shreve:I was actually looking at breadth on the NYSE today. This is the equal weighted version of the S &P 500. Breadth on the NYSE today was actually slightly positive. So even though RSP was, yeah, just down three-tenths of a percent today. You know, much, much better than the S &P 500. Actually, decliners just beat, actually, advancers slightly beat decliners on the NYSE today. So pretty good on the NYSE. But, you know, and then over on the NASDAQ, breadth wasn't too bad. Decliners did beat advancers, but it was less than two to one. So breath wasn't too bad today on both exchanges. So we'll –

6:24Ed Carson:No, clearly. That was not the big issue. The QQEEQE, which is – this is the 100 biggest NASDAQ 100, you know, NASDAQ names outside of financials. That was not a good day for that. So you can see how software and chips and that like – but once you get out of tech, you're right. It wasn't so bad.

6:42Ken Shreve:Yeah, yeah. But we did have other ETFs that we wanted to just take a look at today because it was a very busy, busy day for the market. Take a look at XBI. This is the biotech ETF. I did see some movement in biotechs today. That outperformed a little bit, still showing a lot of relative strength in this market. XBI up two-tenths of a percent on the day. Also had some outperformance. I know David Ryan talked about this on IBD Live earlier today. The ITA, nice day of outperformance, getting support at the 21-day exponential here. That was up 1.4%. The iShares Aerospace and Defense ETF XLI, another ETF here.

7:34Ken Shreve:the industrial select sector spider xli up nine tenths of a percent so definitely some outperformance had a nice rebound in oil and gas stocks that have become quite quite volatile lately slv nice nice rally in silver today slv rallied six percent it did close off highs but But you can see that volatility in the prior three sessions. I think one recent day, silver was down, what, 25? Silver bullion was down 25%, 30 % in one day. So holding support at the 50-day moving average for now. Bitcoin, volatile as ever. The selling has continued unabated in Bitcoin. That closed offloads today, but still...

8:22Ken Shreve:Bitcoin actually uploads 73 ,000.

8:24Ed Carson:Yeah, Bitcoin actually up to its lowest since November 2024. It did close off lows, but oof, you know, it's like it's there was no rally with gold and silver, but it's selling off with gold and silver kind of thing. It's just been really tough. Again, yeah, yeah. Definitely a lot of risk off areas right now. Yeah.

8:42Ken Shreve:And then we can conclude by just taking a look at XLP. Consumer staples, consumer staple stocks also talked about a lot today earlier on IBD Live XLB. XLB, look at that three-day move in the consumer staple ETF. That was up 1.6 % today. And so, yeah, Walmart had another nice big day yesterday for Walmart. Nice breakout over that 120 level, extending gains today up 2.9%. So, interesting day.

9:18Ed Carson:Yeah, closing with a$1 trillion valuation for the first time ever. I mean, that was just sort of out of nowhere. The RS line has really been improving the last few weeks. And I think even on a weekly, it may be getting above some highs now. I mean, that's sort of like, it made a nice run, you know, for a while, then faded. And that's, all of a sudden, it's been doing really well. So, yeah, so it's unclear. That's just offensive. But as you're looking through those other things, it's not just offensive. There's rotation, some other things. I didn't mention this, but KRE, but maybe one more to look at, just that the regional banks are doing well as well.

9:56Ed Carson:Again, there's, you know, so that one is coming. A lot of banks are doing well, but KRE has really come on. And that was something David Saito-Chung was bringing up on IBD Live. So there are a lot of things working. So it's hard to know. I mean, so you have to be nimble. If tech is probably a place you really don't want to be participating in too much. Some areas are working, but you probably wouldn't want to make your whole menu plan off of tech for sure right now. A lot of other things are working.

10:24Ken Shreve:yeah yeah no no doubt about it bad day for semiconductor stocks uh today and uh and uh also software but the selling and software has been going on uh quite a while and we also need to take a look at nvidia this is a big bellwether in the semiconductor space and the selling pressure was uh pretty relentless in nvidia today as well that uh ended down 2.8 percent in higher volume today. It did close off lows and it did undercut this recent low here of 177.61. It was a shakeout and it did close off lows and it's still inside this long consolidation, but NVIDIA's relative strength line has really started to lag.

11:06Ken Shreve:So we'll see if it can hold above these recent lows and see if it can base out here. But selling sellers in NVIDIA again today as it lagged with a lot of other semiconductor stocks today. All right, well, let's take a look at PepsiCo. I think PepsiCo had earnings today and had a nice rally. And boy, look at that move, up four days in a row and 4.9 % gain in very heavy volume. And it was a nice fourth quarter earnings report that the market cheered here, Ed.

12:02Ed Carson:Thank you.

12:10Ed Carson:Yeah, and there's also, I mean, you can see there's acceleration finally getting earnings to turn positive again. The revenue growth has accelerated for three quarters. I mean, it's not world beating, but it's beating the world beaters right now for the most part. So, you know, arguably from a technical standpoint, you know, maybe there's a trend line breakout or a breakout over short term highs in the earlier, like, you know, late last week or maybe Monday. But earnings were coming up. So it's just like, could you really do that? But there was also a buyback and a slight dividend hike, but I think it was a$10 billion buyback.

12:43Ed Carson:So there was news out there. I think the problem is now it's getting pretty extended from the 50-day line. So it was tough to buy before. It's not after. But this might be a situation where if you really feel compelled to buy something like this, well, maybe you buy XLP. I mean, honestly, I mean, there's a few other names you might find, but a lot of things like Pepsi feels extended. We definitely have Walmart is extended, you know, and those other things. So XLP might be a better way to play the staples right now. I mean, it looks a lot like Pepsi's chart, to be honest with you, at least recently here.

13:17Ed Carson:You know, clearing that. So not saying that that'd be safe. Look, if people go risk on again, staples will fall. I mean, they will. And they might fall sharply. Exactly. So, but if you felt compelled, I mean, I'm probably rather just be more cash than this. That's just me. But this looks a little high. But you definitely have to pay attention to this. It's acting well. A lot of the names in here are acting well. It's not just one or two days. So, you know, investors have to know what's working.

13:49Ken Shreve:Out of tech and into the staples, at least over the past couple of days. That's a look at PepsiCo, definitely seeing some movement into the biotech space. So let's take a look at Halozyme, H-A-L-O. This is a biotech that is profitable. We like the profitable biotechs. They're not easy to find, but they're easy to find in IBD's database when you use our rating system and look at those biotechs with composite ratings in the 90s. And you can see Halozyme has been profitable since 2020. And you can see it's been generating revenues for several quarters in a row and made a nice move today. Ed, Halozyme Therapeutics, tell us about it.

14:38Ed Carson:Yeah, Halo isn't a biotech per se. What it is, it's like it has drug delivery technology. So it makes it easier to turn their drugs into under the skin shots. And so that works out.

14:54Ken Shreve:Got it.

14:55Ed Carson:This one tried to break out of a double bottom base. And then today, I mean, it moved above 75.59 handle by point. That's legit. That's a legit by point. I mean, double bottoms can have handles. It was nice volume here. So a lot going on here. That's pretty strong growth that you've marked up there. So it's acting well. Relative strength line isn't at a high, but it is above the handle high. So I think that's a positive. out there. Yeah. So this one does have some big follow moves. You can see that sometimes on earnings, you know, it has some, it has some sharp moves and shortly daily or sharp weekly moves.

15:36Ed Carson:So you just have to be ready for that. This is not a sit and forget kind of stock and it's not a set and forget kind of market. Let's be clear. You definitely want to pay attention to things. But I think this was definitely showing a lot of, a lot of good action.

15:52Ken Shreve:halozyme therapeutics definitely and look at that biotech group ranks eighth out of 197 we rank industry groups based on the six month price performance of stocks in the group so we know that the biotechs have been doing very well over the past six months and halozyme with that composite rating of 99 has been one of the the leaders in the group over the past six months so halozyme looking pretty good in the biotech group. And I saw a lot of selling among the online travel firms, namely in Booking and EXPE. And hard to find specific headlines, but apparently there was some news about Anthropic and some of their agentic AI tools maybe affecting some of these online travel firms.

16:46Ed Carson:Yeah, sort of like that's the concern. They all got hit on Anthropic, released a new AI agentic tool, and maybe you'll just be able to make it very easy to just sort of bypass the online travel firms and go directly and book without that. I mean, and that's part of the issue with software. What's the value add if you can just use a tool like this pretty cheap, you know, presumably, or that they are pretty easy to do and replicate all the experience, everything that Expedia has built up. And you just go, I just want to use my, I'll use Claude. I'll use that, you know, I'll just do that and I'll book it that way.

17:23Ed Carson:And it doesn't mean it has to happen, but sometimes it happens. There are certainly stocks that you see, look, they have an enormous market, but the whole market could go away if, and that seems to be here. This is sort of the kind of thing that's been hitting software and now it's hitting a new area. And it's just something, it may not be real, but you have to recognize this is, you know, sometimes these things happen and people go, no, no, no. Are you crazy? This isn't going to happen, blah, blah, blah. But it's something that's going to be out there. And it's going to maybe something that's going to haunt these names.

17:51Ed Carson:Even if it comes back, people go like, I don't know. I don't know. Maybe not today. And so that's another thing is that we've seen certain things like they trend up. And like, you know, we've seen it with Google and the memory names. People go, oh, it clicks. There's something fundamentally good now. But if you start saying fundamentally bad. So, again, just you wouldn't have known it, but here it is. And it's not good to see that right now.

18:21Ken Shreve:Again, these developments in AI have been weighing on the software stocks for literally months, and now it's starting to bleed into the online travel firm. So Expedia down 15 % today on that news, and BKNG booking, formerly known as Priceline, did not fare much better, booking a big decline as well, down 9 % on that news today. We do have a lot of earnings reports after the close. We've been following the really strong results in the fiber optic group, and we've got another fiber optic stock. We've got AMD. Which one do we want to start with?

19:07Ed Carson:Let's start with AMD. Okay. It beat views. It got it higher, as far as I could tell, but the stock is down, and, you know, pretty decently. And this thing could go all over the place. It'll be interesting. and just got a couple of handle, but that's a couple of handle base. I'm not sure why it's not showing it because that is not, that did not actually clear the buy point, but that, so there is a handle there saving you like 10 cents. So we'll see how that goes. And NVIDIA though was not moving. So I don't know what's going on, why AMD would be down and NVIDIA would not be, I don't know. But, you know, it was not really moving of any real note down, just a fraction.

19:46Ed Carson:So I don't know. I don't know what's going on. So, Lumentum, that beat fuse, I didn't look at all the details, but that one is already was extended. It's going to be more extended. And, again, this was pretty volatile for a few days, but it sort of got out there, and now it's going to be really out there. You know, so great for there. Cirrus Logic, this is a wireless chip maker, CRUS. This one was below a cup with handle buy point. Looks like it might get up to that. It's pretty volatile already. I've seen it swing around a lot. It was up more. So, right now it's below that. But that's going to be interesting.

20:20Ed Carson:Amgen, I think they beat views. I'm not really, haven't really looked at the details. They beat, seem like, fairly solidly. I haven't seen their guidance. This wasn't really doing a whole lot. Stock, I think, was in a buy zone. Or no, it had fallen back out of a buy point. So that one is going to be close to a buy point. Let's see what else. Sorry.

20:44Ken Shreve:EMR?