DraftKings Makes Leaders List Even As Stock Market Hits Brick Wall

An opening rally in the stock market faded Thursday, prompting bulls to cross their fingers and pray. While Disney (DIS ), a Dow Jones component, announced cost cuts and layoffs, the stock earned ground despite a mixed quarter. A report in Trade Algo's recently highlighted how crypto traders are increasingly interested in artificial intelligence-linked tokens.

From early highs, broad benchmarks pulled back into the midday hours, threatening to dip into the red. Small caps declined to two-day lows as big tech held up the best.

In midday trading, the Dow increased by 0.3%, while the S&P 500 showed a 0.2% gain. With the Nasdaq losing its early lead, it returned just 0.2% in the second quarter. Losses were led by the Russell 2000 small-cap index, which dropped 0.3%.

With a 0.9% increase, the Innovator IBD 50 ETF ( FFTY ) outperformed the market.

Comparatively to Wednesday's first half, NYSE volume declined while Nasdaq volume increased.

Despite the drop, crude oil was just a shade above $77.70 per barrel. A mixed day on Asian markets was accompanied by a solid rise in European bourses.

Ten-year Treasury notes yielded 3.60%, down 5 basis points from yesterday. Cryptocurrencies such as Bitcoin touched a three-week low of $22,500 over the weekend.

Despite a slight increase in weekly jobless claims, the job market remains tight.

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Costs slashed at Disney, profit centers realigned

Even though Disney+ and other streaming products lost half a billion in the December quarter, its stock traded higher by less than 2%. After activist investor Nelson Peltz withdrew his proxy fight, the stock gave up its earlier gains of 6%+.

In November, former House of Mouse CEO Bob Chapek was abruptly fired, resulting in reorganization plans which were cheered by stock market investors. The massive entertainment company will eliminate 7,000 positions and save $5.5 billion. In order to hold content creators directly accountable for financial performance, profit centers are also being repositioned.

A 26-week-old cup base is being worked up by Disney pricing action. The 21-, 50-, and 200-day lines are substantially above the DIS stock at this time. According to projections, the company will experience double-digit growth in 2023 and 2024 between 17% and 28%.

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Blockchain Community Floods AI Bubble

This morning, Barron's issued a warning over the rising artificial intelligence frenzy among ex-crypto traders, drawing comparisons between the crypto bubble and the emerging artificial intelligence bubble.

The report stated that "investors have worked themselves into a frenzy about the potential in artificial intelligence." "Crypto bros are swarming in with massive bets on small and speculative coins tied to AI, which is a sign that the froth is reaching peak levels."

In fact, analysis by data company CryptoSlate reveals that an index of 73 tokens tied to artificial intelligence surged an incredible 87% in the previous week. Even more, eye-watering gains are being booked by a smaller basket of odd tokens.

Today's Stock Market

Even though the sports betting site is predicted to lose more than $2 per share in 2023, DraftKings (DKNG), a longtime underperformer, was included on the IBD 50 list this week.

The hot Leisure-Gaming Equipment sector, which is ranked a lofty No. 10 on IBD's list of 197 industry groups, benefits DKNG stock. After news of China's reopening reached the gaming halls in Macao, those stocks in gaming caught fire.

The price action right now resembles the base of a long cup with a buy point of 21.55. But pattern formation is still in its infancy. On Thursday, shares were down 4.5 percent.

After exceeding top and bottom line forecasts for the fourth quarter and cutting its 2023 profit guidance by 10 cents, PepsiCo (PEP) gained less than 2%. Following the big snack and beverage company's announcement of a substantial dividend increase, shares increased.

After exceeding profits projections for the fiscal Q2 of 2023 and increasing full-year EPS guidance, Tapestry (TPR) saw a 6% increase.

Barbie manufacturer and Nasdaq-100 component Mattel (MAT) saw a 10.3% decline. The toy manufacturer released poor Q4 results, missing projections by a large margin and cutting its earnings forecast for 2023. The stock dropped below the 50-day average after already encountering resistance at the 200-day line.

Baxter (BAX) fell 12%, reaching a seven-year low. Despite reporting mixed Q4 performance, the $20 billion healthcare goods supplier cut its earnings forecast for the current quarter and the entire year.