Stocks swung into a mixed open Thursday, dinged by disappointing weekly jobless claims data on the heels of two sessions of quietly constructive trade. Tech stocks seized the early advantage, with Square and PayPal staking out early leads. On the Dow Jones today, Apple climbed, aiming to extend its rally to a sixth day, despite reports of chip shortage problems.
XThe Nasdaq Composite jumped 0.9%, while the S&P 500 angled up 0.2% to take a new high in opening trade. The Dow industrials shed 85 points, dropping 0.2%, as Chevron (CVX) led the decline on the stock market today,.
MercadoLibre (MELI) and Autodesk (ADSK) headed the Nasdaq's early advance. Autodesk jumped more than 3%, also leading the S&P 500. Shares are rising toward a 316.41 buy point in a double-bottom base. Aerospace leader Textron (TXT) jumped 2.5%, overtaking a buy point after an upgrade to buy from Goldman Sachs. The breakout, over a 57.14 buy point in a three-weeks-tight pattern, is in buy range through 60.
Square (SQ) was an early leader among IBD 50 and Leaderboard stocks, rising 2.8%. The point-of-sale systems maker punched back above its 10-week moving average this week, rising 6.8% through Wednesday. The six-day rally has placed it in a buy range for aggressive investors, as it scales up the right side of a seven-week base pattern.
PayPal also sits on a six-day advance, testing resistance at the underside of its 50-day/10-week line. Shares rose 2% in opening trade. If that move holds through the opening bell, PayPal stock would open above its 50-day line for the first time since March 3. PayPal is also on both the IBD 50 and Leaderboard lists.
Semiconductor stocks ran strong in early action, sending the VanEck Vectors Semiconductor ETF (SMH) up 0.9%. The ETF ended Wednesday 2% below a 258.69 buy point in an eight-week cup base.
Microsoft, Apple Rising On Dow Jones Today
Techs once again set up the early pace on the Dow Jones today. Salesforce.com (CRM) led with a 2% advance. Intel (INTC), Apple (AAPL) and Leaderboard stock Microsoft (MSFT) were close behind.
Apple stock rallied, even as Nikkei Asia reported Apple was experiencing production delays in its MacBooks and iPads, due to the ongoing global chip shortage.
The result is a pushback of orders for some of the devices into the second half of the year. The delays signal a possible worsening of the chip shortage, Nikkei reported, and could impact smaller tech players even more heavily.
Apple traded 1.5% higher early Thursday, after outpacing the market and breaking narrowly above its 50-day moving average in a 1.3% advance on Wednesday. Apple stock has climbed for five straight sessions, moving up 10% from a March 8 low.
It is technically in a buy zone for aggressive investors, as the stock looks to advance further up the right side of a three-month basing effort.
Jobless Claims, Powell Debate, Vital Signs
The number of first-time applications for unemployment assistance rose to 744,000 in the week ended April 3, the Labor Department reported. That was above the prior week's 728,000 final tally, disappointing expectations for a second straight decline to 680,000 claims.
Markets also will be tuned to Federal Reserve Chair Jerome Powell's participation in an International Monetary Fund virtual debate on the global economy, beginning at 12 p.m. ET.
Wednesday's release of minutes from the Fed's March 17 meeting showed a steady-as-she-goes stance. The record indicated it would be "some time" before they begin removing aggressive monetary measures to support the economy, and will communicate well in advance any eventual move — just the kind of predictability that investors seek.
Why This IBD Tool Simplifies The Search For Top Stocks
Trade across global markets was mixed, with Europe's markets gaining strength in afternoon trade. Crude oil prices held to their recent range, with West Texas Intermediate down slightly and holding just below $60 a barrel. Bonds were steady, with the 10-year yield unchanged at 1.65%. Bitcoin reversed early losses and gained almost 0.2%, climbing back above $57,000.
Tracking The Nasdaq's Cup Base
A couple of days of level trade have left the Dow and S&P 500 hovering just below record highs, while the Nasdaq adds another brick to the symmetrical consolidation begun in mid-February. The tight action of the past two sessions is a positive, according to Wednesday's Big Picture, because it shows the market refusing to give back any of its March advance.
A look at the Invesco QQQ Trust (QQQ) shows the Nasdaq Composite has shaped what IBD MarketSmith analysis identifies as an eight-week cup base. The buy point for the ETF is at 338.18. The fund ended Wednesday less than 2% below that entry. The symmetry of the base is a positive sign. In addition, the last two days could be the start of a handle forming on the pattern. In this respect, several more days of flattish action could be a positive.
Aggressive investors can track the same base pattern forming on the leveraged ProShares UltraPro QQQ (TQQQ) chart. The Invesco QQQ gained 1.1%, the ProShares UltraPro QQQ rallied 3.2% in Thursday's premarket trade.
Dow Jones Today: A Dozen Blue Chip Buy Points
The Dow Jones today opens freighted with an unusual number of stocks in bases and near buy points. More than a third of the 30 Dow stocks are currently in buy ranges or just below buy points.
Among those, Boeing (BA) is back in a buy range above a 244.18 buy point in a 12-week cup base. Intel is in a buy range over a 63.64 entry in a cup with handle.
Microsoft stock has now climbed in four of the past five sessions, ending Wednesday not quite 2% above a 246.23 flat-base buy point. The buy range extends to 258.54. Both Boeing and Microsoft are IBD Leaderboard-listed stocks.
Goldman Sachs (GS) is in its third week of tight trade as it tests its 10-week moving average. The pullback from March highs and support at the stock's 50-day/10-week moving average set it for a possible buying opportunity if it rebounds from 10-week support.
The tight weekly closes tend to indicate institutional investors accumulating shares. This could potentially amplify the rebound from support.
Walt Disney (DIS) is technically in a buy range. But it is also set up for a possible rebound from support, and may be building a base pattern as well. Nike (NKE) is attempting to retake support, offering a potential early entry for aggressive investors in its base-building effort.
UnitedHealth Group (UNH) is back below a 367.59 buy point, as it tests support at its 21-day exponential moving average.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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