Stocks weakened after a mixed open Friday, as a coronavirus vaccine approval and federal stimulus talks continued to dominate market attention. Palo Alto and Israel's CyberArk led cybersecurity stocks, rallying as details emerged regarding the nation-state attack on U.S. federal IT systems. Tesla climbed into another advance ahead of its S&P 500 debut. On the Dow Jones today, Nike stock traded lower ahead of its fiscal second-quarter report after today's close.
XThe Dow Jones Industrial Average flashed briefly higher at the starting bell, then dropped more than 150 points, about 0.5%. Specialty chemicals maker Dow (DOW) rose 2.6% to lead the Dow Jones today, following an upgrade to overweight from JPMorgan. UnitedHealth Group (UNH), Intel (INTC) and Nike (NKE) all traded down more than 1%.
The Nasdaq launched to a 0.1% gain, then reversed 0.1% lower on the stock market today. Tesla (TSLA) ran up 2.6% to the head of the Nasdaq 100, after its 5.3% jump to a record high close on Thursday. The stock earned a debt rating upgrade from Standard & Poor's on Thursday, ahead of its initiation as an S&P 500 component on Monday. The IBD Leaderboard stock is expected to move sharply higher Friday, as funds buy shares ahead of Monday's S&P 500 debut.
The S&P 500 fell 0.4%, as FedEx (FDX) dragged at the bottom of the list. At the top of the index, security software leader Fortinet (FTNT) rallied 3.8% amid widening news of a national IT security breach. Retail chain Kohl's (KSS) gained 2.2% after an upgrade to buy from Jefferies.
Remote medical services outfit BioTelemetry (BEAT) knocked out a 17% gain, after agreeing to be acquired by Netherlands-based Philips (PHG) in a deal valued at nearly $2.8 billion. Philips shares rose 1.7%.
Stocks near buy points early Friday included Logitech (LOGI), Fortinet, Nice (NICE) and Dynatrace (DT).
Earnings News: FedEx, Winnebago, Apogee
FedEx (FDX) took the hardest early hit among S&P 500 stocks, down 4.6% despite delivering a blowout fiscal second-quarter earnings report and solid guidance late Thursday.
Winnebago (WGO) rallied 6.5% after a strong fiscal first-quarter report, mobing up the right side of a six-month consolidation.
Apogee Enterprises (APOG) reversed an early slip and gained 1% after reporting quarterly results. Darden Restaurants (DRI) inched up 0.1% after delivering results this morning. Nike (NKE) dipped 1.1%, with earnings are due out after the close.
Stimulus Deal, China Blacklist
Senate Majority Leader Mitch McConnell said Thursday stimulus negotiations would likely continue through the weekend, although the spending bill to which the stimulus measures are attached faces a midnight Friday deadline, otherwise much of the federal government would be forced to shutdown Saturday morning.
Still, McConnell and Democratic leaders continued to sound optimistic that a deal is close. The relief package reportedly includes extra jobless benefits, small business funds, checks to every adult American and $17 billion in airline aid.
Chip stocks were mixed Friday after the White House added more than 60 names to companies and institutions banned from receiving U.S. export products or services. Semiconductor Manufacturing International, China's largest chipmaker, headed the newly restricted names and was blacklisted due to its alleged relationship with China's military.
China-based Baidu (BIDU) traded high on the Nasdaq, up 4.2%, while JD.com (JD) dropped 1.5% to near the bottom of the list. Intel posted the Nasdaq 100's biggest drop, skidding 1.9% lower in early action.
Moderna Vaccine Awaits EUA
The Food and Drug Administration's vaccine advisory panel endorsed Moderna's (MRNA) coronavirus vaccine after a hearing on Thursday, clearing the path for the FDA to issue an Emergency Use Authorization. The EUA would free Moderna to begin distributing a targeted 6 million doses of the vaccine to 3,285 locations in the first week following approval, according to the Washington Post.
The Department of Health and Human Services and Department of Defense announced on Dec. 11 plans to purchase an additional 100 million vaccine doses from Moderna. That put the government's total orders of the Moderna vaccine at 200 million doses.
Moderna Nabs Key Endorsement For Covid Vaccine; But Shares Slip
Moderna shares fell 4.8% early Friday, after ending Thursday down 8.2% so far this week. The stock is still up 51% from a Nov. 16 breakout. It is 19% below a Dec. 1 high, and found support at its 21-day exponential moving average on Wednesday and Thursday.
A vaccine jointly developed by Pfizer (PFE) and Germany-based BioNTech (BNTX) was first to earn approval in the U.S. and U.K., and is being rapidly distributed in both countries. Shares of Pfizer slipped 0.5%, and BioNTech dropped 1.4% early Thursday.
National Security Breach Broadens
In what appears set to be one of the most critical stories heading into 2021, the U.S. Energy Department acknowledged Thursday it was among the five other federal agencies so far known to have been hacked into in a massive security breach thought to have gotten underway as early as March.
A statement released by the Energy Department said, "the investigation has found that the malware has been isolated to business networks only, and has not impacted the mission essential national security functions of the Department, including the National Nuclear Security Administration."
IT systems were compromised across multiple U.S. government agencies, and hundreds of the largest private companies. The hack was executed using malware coded into a software update patch from network software developer SolarWind (SWI). SolarWind said 18,000 customers had downloaded the upgrade.
A Thursday blog post from Microsoft President Brad Smith said his company had so far identified 40 customers compromised by the attack, both inside and outside the U.S. He said it was certain that the number and location of victims would keep growing. Calling the breach a "nation-state attack," Smith said the cyber-security infiltration was "effectively an attack on the United States and its government and other critical institutions, including security firms."
An investigation of the attack, first reported by the New York Times on Sunday, is still in early stages. The Associated Press reported that, at this point, "all fingers are pointing to Russia" as the source of the malware. President-elect Joe Biden said on Thursday his incoming administration "will make cybersecurity a top priority at every level of government -- and we will make dealing with this breach a top priority from the moment we take office." President Donald Trump has so far made no comment on the situation.
CyberSecurity: CrowdStrike, Palo Alto, Nice
The 33 stocks in IBD's Computer Software-Security industry group have collectively gained 5.7% following news of the breach, easily outpacing the overall market. That put the group in the week's top 10 advancers among the 197 industry groups tracked by IBD.
IBD Leaderboard stock CrowdStrike (CRWD) jumped more than 9% in early trade Friday. IBD 50 stock Palo Alto Networks (PANW) leapt almost 5%. Both stocks are extended from recent breakouts.
Nice, an IBD Long-Term Leader, broke out from a five-week flat base on Wednesday. Shares were up more than 3%, still within the 5% buy range, at the closing bell on Thursday. Nice stock rose 0.9% early Friday.
Fortinet climbed more than 4%, exiting a buy range above an alternative early entry at 135.04. The stock is also in a longer-term base with a standard buy point at 152.05.
Israel-based cybersecurity play CyberArk Software (CYBR) rallied 12.9% for the week through Thursday, then gained another 8.6% Friday morning. It retook a double-bottom base buy point at 116.54, then surged through its buy range.
The Global X Cybersecurity ETF (BUG) gained 4% Friday, and was up 6% for the week through Thursday, after clearing a buy point in a 14-week flat base. Shares traded a fraction higher early Friday.
Innovative Industrial Properties Reaches New Highs As Marijuana Support Grows
Dow Jones Today: Playing Catch-Up In A Strong Week
The stock market's confirmed uptrend gained another vote of strength on Thursday, with the Nasdaq, S&P 500 and Russell 2000 all rising to new record highs, allowing the S&P 500 to shake off one of its accrued distribution days. Thursday's advance sent the S&P 500 more than 5% above its closing level on the Nov. 12 distribution day. This erases the distribution day, lowering the S&P 500's count to a less worrisome four days. The Nasdaq's count is steady at two days.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The Dow Jones today heads into Friday's session lagging the Nasdaq and S&P 500 for the week with a 0.9% gain. The blue chip index has continued to bob over and under the 30,000 mark, marking a fresh closing high at 30,303 on Thursday. The Nasdaq has run up 3.1% and the S&P 500 has a 1.6% gain. Small caps continue to be the market's rock star segment, with the Russell 2000 up 3.5% for the week through Thursday.
That gives the Russell an 8.7% advance so far for December, vs. a 4.6% gain for the Nasdaq and the S&P 500's 2.8% gain. The Russell 2000 ended Thursday extended 34% above its 200-day moving average, the widest gap in its history. Its prior record was a 31.9% intraday gap chalked up on March 10, 2000.
Investor Sentiment Positive, Breakouts Hold
The market's uptrend is gaining strength, and investor sentiment remains positive. Thursday's Big Picture noted that positive sentiment indicates the major stock indexes are better able to shrug off negative news, like rising jobless claims.
Stock Market ETF Strategy And How To Invest In The Current Uptrend
It addition, growth stock breakouts are generally holding up. The Big Pic also reminded investors to pay close attention to breakout behavior: "Are they being sold into strength by institutions, or do the stocks continue to power higher? For most leading stocks, the post-breakout behavior has been bullish."
Find Alan R. Elliott on Twitter @IBD_Aelliott
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