Stocks bolted higher Thursday, as bond yields flattened and despite slightly hotter-than-expected weekly jobless claims and consumer price inflation data. F5 Networks, Oxford Industries, Marathon Oil and ServiceNow stepped out to early leads. Bitcoin prices rebounded. And Boeing rallied high on the Dow Jones today, on another potential large order of 737 Max jets.
XThe Dow industrials rolled 250 points higher at the open, up 0.7%. The S&P 500 jumped 0.7%, knocking out a new record high. The Nasdaq Composite gained 0.8% on the stock market today, edging back above the 14,000 mark.
F5 Networks (FFIV) powered up 4.2%, leading the S&P 500. Credit Suisse raised the stock to outperform, from neutral. The note raised the stock's price target to 235, from 205. F5 is climbing up from the bottom of a 10-week, 19% deep consolidation.
ServiceNow (NOW) rallied 3.9%, after Goldman Sachs upgraded the stock to its "Conviction" buy list. The note placed the stock's price target at 695, 50% above Wednesday's closing price. ServiceNow shares are attempting to fashion a floor in a four-month consolidation.
Marathon Oil (MRO) scrambled 3.1% higher, as RBC Capital upgraded the stock to outperform, from sector perform and boosted its price target to 18, from 14. The report noted Marathon's "ultra-low" breakeven price on oil production.
Cleveland Cliffs (CLF) swept 3.5% higher, leading the IBD 50 roster, following its 14.6% price spike on Wednesday. U.S. Steel (X) rose 2.6%, after posting a 4.2% gain for the week through Wednesday.
Shirtmaker Oxford Industries (OXM) collared an early 10% gain, as analysts raised price targets following late-Wednesday earnings. Shares spiked to a new high, after retaking a 94.82 buy point.
IBD Leaderboard steelmaker ArcelorMittal (MT) powered up 3.6%. The gain moved shares toward the top of a buy range following a rebound from support at the stock's 10-week moving average.
Earnings news drove early gains from retailers RH (RH) and Signet (SIG), and from container manufacturer Grief (GEF).
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Dow Jones Today: Boeing, Apple, Goldman Sachs
Boeing (BA) ran at the head of the Dow Jones today, rising 2% after Bloomberg reported the company is in advanced talks with United Airlines Holdings (UAL) regarding an order for 100 737 Max aircraft.
Boeing stock has completed a valid handle on what IBD MarketSmith analysis charts as a 13-week cup base. The handle lowers the stock's buy point to 258.50, from 278.67.
Goldman Sachs (GS) angled up 0.5%, after Chief Financial Officer Stephen Scherr told CNBC that inflationary pressure in the U.S. was only temporary. Goldman shares are in a buy range through 393.93, after clearing a three-weeks-tight pattern.
Apple (AAPL) climbed 0.7%, moving to add a fifth day. The consumer electronics giant's five-day Worldwide Developers Conference, begun Monday, hasn't yet generated any needle-moving news. Shares are testing resistance at their 50-day moving average, and a bit less than 8% below a 137.17 buy point in a five-week flat base.
Jobless Claims, Inflation Gauge Run High
The Labor Department's Consumer Price Index jumped 0.6% on May, below April's 0.8% increase by above the 0.4% gain projected by economists. On a year-over-year basis, the metric was up 5%, vs. views for a 4.6% increase.
Excluding food and energy, prices rose 0.7% vs. April and 3.8% compared to year-ago levels. Economists projected 0.4% and 3.4% gains, respectively.
Applications for first-time unemployment assistance declined to 376,000 for the week ended June 5. That was below the prior week's 385,000 claims, but above estimates for 369,000 applications.
RH Earnings, Buy Points
RH stock spiked 14% early Thursday. Its first-quarter report issued late Wednesday showed RH earnings shot up 385%, over a 78% revenue gain. The quarter benefited from soft year-ago comparisons — earnings and sales fell in the early 2020 as the pandemic hit. Still, RH breezed past views. The upscale furniture retailer also gave bullish second-quarter sales forecasts and raised full-year revenue and margin targets.
The gain signaled an early entry for aggressive investors above the 50-day line and above a downward-sloping trend line. RH stock recently has been hitting resistance at the 50-day line. A proper buy point does not occur until 733.15.
Bitcoin Rebounds
Bitcoin continued its rebound, rising about 8% early Thursday to trade above $37,800, according to CoinDesk. The cryptocurrency had dipped below $32,000 late Tuesday, briefly narrowing its gain for the year to less than 10%.
Bitcoin touched a record high above $64,800 on April 14. It is down a fraction since the start of June, with a year-to-date gain of just over 28%.
Meme Stocks: GameStock Earnings, Investigation
Meme stock GameStop (GME) topped first-quarter earnings forecasts and named a new chief executive and CFO, adding to its stable of former ex-Amazon.com (AMZN) executives. The company also announced plans to sell up to 5 million shares, and reported a Securities and Exchange Commission probe into the trading of its shares. GameStop shares were down 10% in early trade. The stock is up more than 36% in June, with and ahead more than 1,500% since Dec. 31.
Among other recent meme plays, AMC Entertainment (AMC) dropped 0.2%, after finishing Wednesday with a gain of nearly 89% so far in June. Koss (KOSS) fell 4.4%. Clover Health (CLOV) slipped 3.6%, after huge swings left shares up 88% for the week through Wednesday. Clean Energy Fuels (CLNE) tumbled 10%, after spiking 31.5% on Wednesday.
Vital Signs: Bond Yields Flatten
Bonds yields flattened after an early rebound, with the 10-year Treasury yield easing back to 1.49%, after settling just below that level on Wednesday, according to CBOE data.
Yields are in the midst of a four-week pullback, tracking toward their sharpest weekly decline since mid-April. The 10-year yield hit a 13-month high above 1.76% on March 30.
Markets are keeping a close eye on Treasury yields as inflation indicators edge higher, and as the Federal Open Market Committee prepares for its quarterly meeting next week.
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Vital Signs: Oil Prices
In oil prices, West Texas Intermediate futures rose 0.8%, nearing $71 a barrel. That is their highest level since peaking at $76.90 in October 2018. West Texas Intermediate is the benchmark oil contract for the U.S. market.
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Oil prices have gained as demand recovers entering the summer driving season, despite the prospect of returning supply from Iran, as well an agreement from the Organization of Petroleum Exporting Countries and partners led by Russia to increase production beginning this month. That stubborn oil price increase sends a bullish signal to energy markets and related stocks.
Among industry groups, oil and gas drillers — Helmerich & Payne (HP), Nabors Industries (NBR), Championx (CHX), Valaris (VAL) — rallied more than 21% over the last four weeks, with a year-to-date gain of almost 78%
U.S. explorers and producers like Occidental Petroleum (OXY), APA Corp. (APA), ConocoPhillips (COP) have a four-week gain of 15%, and are up 88% since Dec. 31.
Stocks To Watch: Alphabet, Applied Material
Among the growth stocks flagged this week by IBD's Investing Action Plan, Google parent Alphabet (GOOGL) gained 0.9%, approaching a flat base buy point at 2,431.48 buy point.
Dell Technologies (DELL) gained 0.3% Thursday, moving into a buy range above a 103.90 flat base entry.
Applied Materials (AMAT) jumped 2.3%, springing off its 50-day moving average. Shares have formed a handle that lowers its buy point to 142.22, from 146.10.
Bio Techne (TECH) climbed 1.7% Thursday, working on its fourth-straight weekly advance and heading toward a 444.93 buy point from a flat base.
Dow Jones Today Lags; Nasdaq's 14,000 Test
Thursday's early action suggested the Dow Jones today might just snap its three-day decline. But beginnings have been very different from the endings in recent market action. The Dow is drawn back in a test of support at its 21-day moving average, ended Wednesday 1.8% below its record high, just above 35,000, set on May 10.
The stock market last Friday had its status upgraded to "uptrend resumes" for the first time since May 12. The Nasdaq Composite triggered the change, punching back above support at its converged 50-day and 21-day moving averages. It added to that cushion of support on Monday and Tuesday.
The index ended Wednesday 0.6% below the 14,000 mark, the level which has capped its progress since February.
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The S&P 500 has traded up and down for the past eight sessions. It ended Wednesday less than 0.5% from its record high, set on May 7. The S&P 500 also continues to show firm support at its short-term 21-day moving average.
Adopting An Uptrend Stance
The market remains frustrating, as White House/GOP efforts to find common ground on infrastructure spending, as well as the uncertainty regarding Federal Reserve strategy remain significant stumbling blocks to market confidence.
But the improved market status suggests investors adopt a slightly more aggressive game plan. That opens the door to start rotating back out of cash, and into fundamentally strong stocks and ETFs breaking out from sound chart patterns.
Even so, don't jump all in at once: keep new positions small to start. The market will tell you pretty quickly if it was a well-timed buy or not. Stay disciplined and stick to sound buy and sell rules.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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