Stocks opened mixed, then diverged into mixed trade Thursday as investors continued to digest the Federal Reserve's stance adjustment announced Wednesday. Earnings news sent Lennar sharply higher. Diversified medical leader Danaher rallied on merger news. BioNTech led an early rally among vaccine makers. And Salesforce.com headed the Dow Jones today.
XThe Nasdaq Composite fought to an early 0.3% gain, holding the 14,000 mark as chipmakers Advanced Micro Devices (AMD), Xilinx (XLNX) and Nvidia (NVDA) led the Nasdaq 100.
The Dow Jones Industrial Average slipped 0.3%, while the S&P 500 traded down not quite 0.1% on the stock market today. Nike (NKE) held the low end of the Dow, down almost 1% after a downgrade to mixed, from positive, by OTR Global.
Chip stocks rallied behind Advanced Micro Devices, which swung more than 3% higher, after announcing the launch of T2D servers, in partnership with Google Cloud, powered by AMD's EPYC processors. Xilinx jumped more than 3%. Nvidia posted a 2.2% gain. The iShares PHLX Semiconductor ETF (SOXX) advanced 0.8%.
Ford Motor (F) rallied 1.3% after company management raised its second-quarter operating earnings forecast to above analyst targets, and said orders were running strong for the company's four new vehicles, two of which are electric.
Vaccine makers BioNTech (BNTX) and Novavax (NVAX) jumped more than 3% apiece, after CureVac (CVAC) reported disappointing trial results for its Covid-19 vaccine candidate. CureVac shares dived 50%.
Danaher (DHR) surged 5% after agreeing to a $9.6 billion cash deal for plasmid DNA and mRNA producer Aldevron. The gain lifted Danaher shares near to a 261.53 buy point in a six-week flat base.
Dental and veterinary supplies vendor Patterson (PDCO) vaulted 2.9% higher after Piper Sandler upgraded the stock to overweight, from neutral, with a 44 price target. The early move positioned shares to open just below a flat base buy point at 37.26.
In earnings news, IBD Leaderboard stock Jabil (JBL) popped more than 2% following a solid fiscal third-quarter earnings beat. Homebuilder Lennar (LEN) rose 2.9% after reporting its second-quarter results. IBD Leaderboard stock Adobe (ADBE) reports its second-quarter earnings after the market close.
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Dow Jones Today: Banks Set To Rise
JPMorgan (JPM) and Goldman Sachs (GS) reversed their premarket gains on the Dow Jones today and dropped about 0.8% each. Salesforce.com (CRM) rose 0.5% to lead the Dow in early trade.
JPMorgan is set to continue its rebound that followed the Fed's moderately hawkish strategy discussion on Wednesday. That ended the investment bank's seven-day decline. Shares traded up 0.5% early Thursday.
Goldman rose 0.6% in premarket action, aiming to snap its three-day pullback. GS stock is still in range of a 356.95 buy point from a shallow cup base. It is just below a three-weeks-tight entry at 377.08.
JPMorgan has not technically triggered the automatic sell rule below what IBD MarketSmith analysis pinpoints as a 161.79 buy point in an eight-week flat base. But the seven-day decline that undercut support at both its 21-day and 50-day moving average triggered two sell signals.
Apple (AAPL) sloughed its early losses and rose 0.9%. That moved the stock up off its 50-day moving average, and to within about 4% of a 137.17 buy point in a seven-week flat base.
Unemployment Claims Jump Back Above 400,000
The Labor Department reported first-time claims for unemployment assistance rose to 412,000 in the week ended June 12. That was up from 376,000 claims in the prior week, the first increase since late April and counter to expectations for a decrease to 360,000 new claims.
In addition, the index for the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey fell to 30.7 for June. Down from May's 31.5 reading, it narrowly undercut forecasts for a tally of 31.
IBD 50 Stocks: Jabil, 360 DigiTech
360 DigiTech (QFIN) traded high in the IBD 50 lineup in early action. The China-based stock, which is extended from a June 4 breakout, grabbed an early 2.3% gain.
IBD 50 peer Jabil, also a Leaderboard stock, was up 2.1% after scoring strong earnings and revenue beats in its fiscal third quarter, and raising fourth-quarter guidance above analyst targets. The stock closed Wednesday at the top of a buy range following a rebound from 10-week support. It is also poised to rebound from its 21-day line.
Also on the Leaderboard roster, Wells Fargo (WFC) rose 0.6%. That set the stock up for a potential rebound from support at its 10-week moving average. The stock has gained 9% since clearing a four-weeks-tight chart pattern in mid-April.
Vital Signs: Bond Yields, Copper, Oil Prices
Treasury yields eased slightly, after a big spike following the Federal Reserve policy news on Wednesday. Yields traded around 1.55% early Thursday, under Wednesday's close just below 1.57%, according to CBOE data.
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Crude prices slipped a fraction, with West Texas Intermediate futures dipping just below $72 a barrel, but still up nearly 9% since the start of June. Copper prices continued to back away from the record high set above $4.76 a pound in mid-May. Futures fell 2.3% Thursday to just above $4.28 a pound.
Nasdaq, Dow Jones Today: Inflection Point?
Heading into Thursday's session, the Nasdaq Composite is down 0.2% so far for the week, but has rebounded 8% from its May 12 low. Over that same period the S&P 500 has advanced 4.1%. The Dow industrials have gained 1.4%.
The Dow Jones today opens with a 1.3% decline for the week through Wednesday. The S&P 500 slipped 0.6%.
The Nasdaq is leaning to potentially snap its four-week advance. But its post-Fed announcement action yesterday saw the index dip well below the 14,000 level, then recover to close above that line. That may be a replay of the index's attempts to hold support on April 29 and Feb. 16, both of which preceded three-week declines.
But third attempts in the market often mark inflection points. Therefore, it is possible that Wednesday's action marked a shift to support at 14,000 for the Nasdaq.
Wednesday's Big Picture noted that the S&P 500 held support nicely at its short-term 21-day moving average. The same was true for the Russell 2000 small-cap gauge, and the S&P Smallcap 600.
The Dow was a different story. It closed below its 50-day moving average for the first time since March. And while the Nasdaq and S&P 500 each sit about 1% off their record highs, the Dow is now 3% below what now is looking like an increasingly distant May 10 peak.
The mood of the Dow Jones today, and over the next few sessions will be particularly telling. The industrials could quickly retake 50-day support, as they did on Feb. 2 and March 5. The same is true of the Nasdaq: whether it will follow up Wednesday's retaking of the 14,000 mark differently than it did in February and April.
Stock Market Status
The stock market status reverted to "confirmed uptrend" on June 4. The market remains frustrating, but the improved market status suggests investors turn to a slightly more aggressive game plan. That is, start to rotate some cash back into the market, into fundamentally strong stocks and ETFs breaking out from sound chart patterns.
For more detailed analysis of the current stock market and its status, study the Big Picture.
But be measured, and defend that capital: keep new positions small to start. And keep sell rules handy and limit tolerances tight. Stay disciplined.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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