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Stocks climbed to the starting bell on Wednesday, boosted by a fresh reading of July inflation data. Actions related to steel and other infrastructure continued to rise after Tuesday’s Senate compromise. Airlines shares have reversed from pre-market losses that followed a Southwestern Delta virus warning. Chip stocks shed their initial weakness, with Advanced Micro Devices leading a rallying group alongside infrastructure names. Meanwhile, Home Depot, Walmart and Caterpillar dominated the Dow Jones today.
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Dow industrials briefly jumped more than 200 points, up 0.5%, to a new record. The S&P 500 posted a gain of 0.2% after hitting its own record. The Nasdaq Composite defended a gain of 0.1%, Modern (MRNA) and Micronic Technology (MU) rocked the bottom of the Nasdaq 100 and Netflix (NFLX), Facebook (FB) and You’re here (TSLA) plunged into the first losses.
NortonLifeLock (NLOK) gained 7.8% to dominate the S&P 500. The leader in consumer data security announced Tuesday evening that it would pay $ 8 billion to acquire Avast, a cybersecurity brand based in the Czech Republic.
Also leading the S&P 500, the steelmaker Nucor (NUE) increased by 4%. The title was extended at Tuesday’s close, after a solid breakout from a nine-week cut base. A Senate vote on Tuesday passing a $ 1.2 trillion infrastructure spending program sparked rallies in materials and construction inventories.
Other names related to moving infrastructure included Linde (LINEN), Jacob’s Engineering (NS Vulcan materials (VMC).
Drug manufacturer Perrigo (PRGO) plunged nearly 12%, to the bottom of the S&P 500 after reporting a shortfall and weak forecasts. S&P 500 shares Southwest Airlines (LUV) reduced its pre-market loss to less than 0.1% as airline stocks opened to early gains. The low-cost airline has warned that cancellations and low bookings caused by concerns over the Covid / delta virus make third-quarter profit unlikely.
Splunk (SPLK) topped the Nasdaq 100, up 4.6% after UBS upgraded the data analytics tool maker to Buy, from neutral.
Vaccine makers were under great pressure early on as the IBD 50 stock Modern (MRNA) fell 5.6%, to low of the Nasdaq 100. Vaccine homolog BioNTech (BNTX), an IBD ranking list, plunged 7.4%.
Chip stocks turned mixed, after the initial weakness in the sector’s price outlook on Tuesday put pressure on manufacturers of dynamic random access memory, or DRAM, chips. Materials applied (AMAT) and Marvell technology (MRVL) reversed the initial losses into gains. Advanced micro-systems (AMD) was a leader, climbing 1.3%. The VanEck Vectors Semiconductor (SMH) ETF rocked its first losses and climbed 0.5%.
Dow Jones Today: Walmart, CAT, Home Depot
Walmart (WMT), Home deposit (HD) and caterpillar (CAT) dominated the Dow Jones today.
Walmart rose 1.5% at the start of the action, following a powerful 2.1% advance on Tuesday. On a weekly chart, Walmart stock is aiming to extend its rally to an eighth week, after breaking an entry of 144.68 in a 10-week flat base as part of larger consolidation. The stocks remain in a buy range up to 151.91.
Caterpillar gained 1.1%, heading for a fifth consecutive gain. Stocks challenge resistance at the stock’s 50 day / 10 week moving average. Caterpillar stock fell into a deep consolidation of 19% in early June. CAT stock rose 2.5% on Tuesday, as investors reacted to the Senate’s approval on Tuesday for an infrastructure spending program.
Inflation data under control, Federal Reserve speech
The Labor Department said its consumer price index rose 0.5% in July, slower than June’s 0.9% jump and in line with Econoday’s consensus forecast. Year over year, the index gained 5.4%, below views for a gain of 5.5% and equal to June’s 5.4% increase. Base prices rose 0.3%, below views for a 0.4% increase.
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Markets keeping an ear on any shifts in Federal Reserve thinking, speeches by Atlanta Federal Reserve Chairman Raphael Bostic at 10:30 a.m. ET and Kansas City Federal Reserve Chairman Esther George at 12 p.m. ET, could affect the trade of the day.
Earnings News: Upstart, Rally Maravai
In the news of earnings, Open loan (LPRO) jumped 15%, CuriosityStream (CURI) jumped 13%, FuboTV (FUBO) increased by 12% and Mcafee (MCFE) gained 4% after posting on Tuesday night. Wendy’s (WEN) gained 3% on results released early Wednesday.
IBD 50 List Holdings reached (UPST) rose more than 20%, as analysts improved and raised their price targets after second-quarter sales and profits exceeded expectations by wide margins, and management raised its guidance for the third trimester. The tip moved up the right side of a very deep basic pattern.
IBD 50 List Maravai Life Sciences (MRVI) jumped 6.5% after its Tuesday night report. Stock is extended after a sharp break from a six-week cup base last week.
Vital signs: oil, bond yields, Bitcoin
Crude oil prices fell, with West Texas Intermediate down 1.3%, but remaining above $ 67 a barrel. WTI prices rebounded 2.7% during the day on Tuesday, settling 11.2% below their July 6 high. Oil prices are up 40.1% since the start of the year.
The 10-year Treasury yield reversed the initial gains and fell back to 1.34% early Wednesday, roughly where it stood on Tuesday. A six-day lead to Tuesday marked the longest rally in yields since January, after a rebound last week shattered a streak of 10 losses in the past 11 weeks.
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Bitcoin has traded around $ 46,200, after hitting $ 46,583 and as low as $ 44,670 in the past 24 hours, according to Coindesk. Bitcoin peaked above $ 64,829 in mid-April.
China’s rebound slows, Europe rises
Chinese markets added a third day to their rebound, although momentum slowed noticeably. Hong Kong’s Hang Seng Index rose 0.2% and the Shanghai Composite rose less than 0.1%. In Japan, Tokyo’s Nikkei 225 jumped 0.7% as the US dollar strengthened.
Largest stock of pots in the US reports mixed gains; Key rivals at your fingertips
Among Chinese gauges in the United States on Wednesday morning, the iShares MSCI China ETF (MCHI) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) were unchanged at the start of the session. Both funds rose 0.9% on Tuesday. The KraneShares CSI China Internet ETF (KWEB) technology tracker traded 0.8% higher at the start of trading, after rising 0.7% on Tuesday.
European markets strengthened following inflation data in the United States. In afternoon trading, the CAC-40 in Paris rose 0.6%. The Frankfurt DAX also rose 0.6%. London’s FTSE 100 climbed 0.7%. The SPDR Portfolio Europe ETF (SPEU) remained unchanged at the start of the session, after a tiny gain on Tuesday. ETF is up 0.9% in August, has a 14.4% year-to-date gain, and is trading just below a buy point of 44.06 on a flat basis eight weeks.
5 stocks to watch: Celsius, Wesco, Apple, Snap, Square
IBD 50 shares Celsius Fund (CELH) releases second quarter numbers ahead of the market opens on Thursday. The fitness drink maker entered a buy range above 76.90 on a double bottom basis. The chart shows a third stage setup, which means its gain from a new breakout may be lower than from previous breakouts. Celsius was the IBD 50 stock to watch for Tuesday.
Wesco International (WCC) broke the buy point of 113.20 on a flat basis last Friday after the diverse maker, out of Westinghouse Electric in 1994, topped profit estimates on Thursday night. It remains just above the buy point, within a buy range and a security to watch.
Apple (AAPL) is also in a buy zone on the Dow Jones today, after crossing a buy point of 145.19 in July. The IBD action for Monday, it remains in the buy zone until 152.45.
Snapchat Owner Break (SNAP) slipped 0.4% early Wednesday. The stock is trading low in the 5% buy zone after a buy point of 73.69 in a consolidation. The 5% buy zone peaks at 77.37.
Leader in point of sale software Square (SQ) rose 0.5% early Wednesday. IBD Leaderboard stock is in a buy range above another handle buy point at 267.87. The buy range extends to 281.26.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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