The Nasdaq Composite and S&P 500 gave up their opening gains and plunged a fraction, battling to defend their lead for the week. The Dow Jones Industrial Average was down 0.2% in the stock market today.
Vaccine manufacturer Modern (MRNA) led the Nasdaq 100 with a 1% gain as it aims to stem a steep two-week decline. Baidu (BIDU) et Facebook (FB) were also at the top of the list. Fixation (FAST) fell 2.6% to the bottom of the index, after Wells Fargo lowered the stock underweight.
Tesla (TSLA) reversed its initial losses and gained 0.3% after the company’s annual meeting of shareholders on Thursday night. The company said it will report third quarter results on October 20. Tesla stock remains in a buy range above a buy point of 764.55.
Quidel (QDEL) rose more than 6% to lead the S&P 500. Chief Executive Officer Douglas Bryant said last night that the company produced and shipped the most SARS tests in the company’s history in the past night. third quarter, and it’s on track this year to meet its target capacity of 70 million rapid antigen tests per month.
Quidel also announced preliminary third quarter revenue that drove JPMorgan’s price target up to 80 from 70.
Oil stocks held eight of the S&P 500’s top 10 biggest gains. Communication of the Charter (CHTR) fell 3.5% to the bottom of the index, following a downgrade of Wells Fargo.
Dow Jones Today: Home Depot Downgraded
Chevron (CVX) regained the lead in the Dow Jones today, rising 1% as oil prices rose.
Home Depot trailed early action, down 1% after Loop Capital lowered the stock to hold, to buy. The note also lowered the brokerage’s price target on Home Depot shares to 325, from 370.
The Home Depot posted a 2.2% gain on Thursday, dropping just below a buy point of 338.65 in what IBD MarketSmith analysis identifies on a daily chart as a flat base. Pulling back below this buy point did not trigger the automatic sell rule.
Tank rental in September; Debt ceiling raised
The Labor Department reported that the total non-farm payroll increased by 194,000 in September, down 17% from August and well below economists’ projections for 475,000 new jobs. This marks a second month of strong deceleration. However, the unemployment rate fell 0.4% to 4.8% for the month.
Markets were lifted quickly, after the Senate voted Thursday night to raise the debt ceiling until early December, as Democrats accepted Senate Minority Leader Mitch McConnell’s offer for a debt increase short term. To avoid a government default, the House must approve the measure before President Joe Biden signs it.
Chinese markets ended the week on a positive note. Hong Kong’s Hang Seng Index gained 0.6%, leaving the week up 1.1% after Tuesday’s drop to its lowest level in 12 months. The Shanghai Composite rose 0.7% to end its shortened holiday week with a 0.7% lead.
In Japan, Tokyo’s Nikkei 225 jumped 1.3%, benefiting from the US debt ceiling deal.
European markets were mixed around midday, with the CAC-40 in Paris down 0.4% and the Frankfurt DAX down 0.2%. The FTSE 100 in London held on to a 0.1% lead.
Vital signs: oil, bond yields, Bitcoin
Oil prices reversed initial losses and gained more than 1% on Thursday, with West Texas Intermediate crude hitting above $ 78 a barrel. WTI futures gained 0.9% early Thursday, approaching Wednesday’s 7-year high.
When to sell growth stocks: this could be your # 1 rule
Bond yields edged up ahead of the jobs report, with the 10-year yield rising one basis point to 1.58%. The yield jumped nearly 5 basis points Thursday to 1.57%.
Bitcoin gained nearly 3%, trading above $ 55,400. The cryptocurrency rose nearly 17% for the week and hit $ 56,078 and as low as $ 53,436 in the past 24 hours, according to CoinDesk.
IBD 50 shares: Callon buy point, Stifel buy range
On the IBD 50 list, Callon Oil (CPE) jumped 1.4%, aiming to extend its rally by four weeks. The shares carved out a deep cut base of 58% with a buy point at 60.59. The stock closed about 7% below that entry on Thursday.
Western Alliance Bancorp (WAL), Diamondback Energy (CROC), Stifel Financial (SF) and CarGurus (CARG) were all in buy ranges after passing buy points last week.
In Mode (INMD), SiTime (SITM), Former Domination (ODFL), CBRE Group (CBRE) are executing, or are in position for, possible rebounds from the 10 week support. Old Dominion is the focus of this week’s Big Cap 20 column.
Nasdaq, S&P 500, Dow Jones aujourd’hui
The Dow Jones is looking today to close what has been a strong rebound week, with the index up 1.3% through Thursday.
The advance fueled past short-term support levels, but ran out of steam below the Dow Jones 50-day moving average. This is the third failure of the Dow Jones since September to regain this support level, marking a clear resistance line.
For a more detailed analysis of the current stock market and its state, study the big picture.
The S&P 500 gained 1% through Thursday, also resuming short-term support and retreating after not quite reaching its 50-day line. The Nasdaq Composite has advanced 0.6% so far for the week. In terms of short-term support, it has regained its 10-day line, but remains below its 21-day line. It closed on Thursday 1.5% below its 50-day line.
These charts clearly support a “correcting market” status. The market’s attempt to initiate a new uptrend remains active, with the Nasdaq and S&P 500 holding firm above the lower plots on Monday. A follow-up day could occur now at any time and confirm a new uptrend. But, so far, the market has not provided any clear signal as to whether this is further consolidation or a move into a new uptrend.
Right now, investors need to build stock watchlists near valid buy points, in order to be ready with achievable goals when the market moves.
Please follow Alan R. Elliott on Twitter @IBD_Aelliott
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