The Dow Jones (DJIA) is trading lower on Thursday as investors digest a key earnings report from Nvidia (NVDA) and labor market data from the Department of Labor (DOL).
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New trading tool for QQQ bullsFor the quarter ended December 31, Nvidia reported revenue growth of 73% to $68.10 billion with an adjusted EPS of $1.62. Both figures came above the analysts’ estimates of $66.23 billion and $1.54, respectively. In addition, the semiconductor leader provided fiscal first quarter revenue guidance of $78 billion, plus or minus 2%, which was above the estimate of $72.6 billion as well.
However, the results weren’t good enough for investors, with NVDA selling off amid continued fears of a bubble in AI. Investors are also concerned about the company’s customer concentration and whether the company can continue to grow rapidly if AI spending cools down. NVDA holds a 2.34% weight in the Dow Jones.
Several analysts defended Nvidia following its report. Cantor Fitzgerald analyst C.J. Muse emphasized that the company “gets no respect” and remains undervalued with strong AI demand. UBS analyst Timothy Arcuri said that it’s “hard to see” why NVDA is trading lower when it reported such strong numbers and maintained his price target of $245 and “buy” rating. Both analysts are ranked by TipRanks as five-star analysts.
Meanwhile, the DOL announced that initial jobless claims rose by 4,000 to 212,000, below the consensus estimate of 216,000, for the week ended February 21. Continuing jobless claims, which trail initial claims by a week, fell by 31,000 to 1.833 million and were below the expectation of 1.858 million. Initial jobless claims serve as a gauge of layoffs, while continuing jobless claims track the number of people receiving unemployment benefits and reflect ongoing unemployment.
The Dow Jones is down by 0.39% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Nvidia (NVDA) is leading the tech sector to the downside, although other Magnificent 7 members, including Amazon (AMZN) and Apple (AAPL), are trading lower as well. On the bright side, both IBM (IBM) and Salesforce (CRM) are up by over 2%.
Elsewhere, the financial sector is showing strength, with Visa (V) and American Express (AXP) both up by over 1%. Dragging the Dow Jones lower alongside the tech sector are healthcare and industrial stocks, highlighted by steep losses from Caterpillar (CAT), Merck (MRK), and Amgen (AMGN).
Is the Dow Jones a Good Long-Term Investment?
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is falling alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $557.34, implying upside of 12.98% from current prices. The 30 holdings in DIA carry 30 buy ratings, zero hold ratings, and zero sell ratings.