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Stocks maintained strong gains on Thursday afternoon as the Dow Jones Industrial Average rose 400 points to touch its 50-day moving average again.
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The Nasdaq was up 1.3%, Dow Jones Industrials rose 1.1% and the S&P 500 was up 1% on the stock market today. Small caps followed by the Russell 2000 outperformed, up 1.7%. Volume was lower on both major exchanges compared to the same time on Wednesday.
Among exchange-traded funds, Innovator IBD 50 (FFTY) gained 1.4%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) rose 1.5%. The IBD 50 ETF, which tested its 200 day line last week, is now trying to regain the 50 day line.
The shares extended their gains after Senate Majority Leader Chuck Schumer announced lawmakers reached a short-term deal to extend the debt limit until early December. This would buy time to avoid a government default that Treasury Secretary Janet Yellen said could trigger a recession.
“We have come to an agreement to extend the debt ceiling until December. And we hope to be able to do so today,” Schumer said this morning.
Snapshot of the US Stock Market Today |
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|---|---|---|---|---|
| Index | symbol | Price | Loss of profit | % Switch |
| Dow jones | (0DJIA) | 34779.06 | +362.07 | +1.05 |
| S&P 500 | (0S & P5) | 4405.49 | +41.94 | +0.96 |
| Nasdaq | (0NDQC) | 14687.17 | +185.26 | +1.28 |
| Russel 2000 | (IWM) | 223.54 | +3.67 | +1.67 |
| MICI 50 | (FFTY) | 47.49 | +0.66 | +1.41 |
Last Modified: 3:04 PM EST 10/7/2021 |
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Early Thursday, the Department of Labor reported initial jobless claims of 326,000 during the week ended Oct. 2. This was down from 364,000 requests the previous week and also below economists’ forecasts for 328,000 requests.
The US economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns more than a year ago. A resurgence of cases fueled by the more contagious delta variant has recently started to slow as vaccinations increase.
Cumulative Covid-19 cases worldwide have exceeded 237 million, with more than 4.8 million deaths, according to Worldometer. In the United States, cases are approaching 45 million with nearly 728,000 deaths.
Growth stocks to watch
Endava (DAVA) climbed 6% in above-average trade to a new high. It is now slightly extended from a buy point of 143.60 from a seven-week consolidation first cleared on Tuesday, according to MarketSmith chart analysis. The buy range peaked at 150.78. Endava, with a composite rating of 99, leads the IT services group of 47 stocks. It was discussed on IBD Live this morning.
Parent U-Haul America (UHAL) widened and rose more than 3% to pass a buy point of 677.44 on a six-week flat basis. The stock remains in a potential buy range up to 711.31. Amerco is holding above its 21-day and 10-week moving average lines, a bullish sign.
Connect to resources (RGP) jumped 14% in heavy trade to a three-year high, after the accounting consultancy delivered a solid first-quarter fiscal pace on Wednesday night. Shares are now well-extended from a buy point of 16.60 from an open flat base for the first time on Wednesday.
Marvell technology (MRVL) climbed 5% early Thursday, before cutting its gain in half. Morgan Stanley raised its price target on the factory-less chip designer to 63 from 61. Marvell stock has passed a buy point of 64.17 on a flat-base but is still in the buy-up range. 67.38.
Keep in mind that with the market correcting all purchases are very risky. While investors should refrain from buying stocks aggressively until the uptrend resumes, launching very small positions in some top performing industry groups remains a viable option. It is best to avoid areas with serious weaknesses.
Dow Jones Movers
UnitedHealth Group (UNH) led the winners on the Dow Jones with a 3% pop as it operates on a flat basis with a buy point of 431.46. Analysts expect earnings to rise 25% to $ 4.40 a share when the managed care giant releases third quarter results next week.
Home deposit (HD), Dow Inc. (DOW) and Alliance of Walgreens boots (WBA) won almost 3% each.
Home Depot widened and rose 2.6% to climb above a buy point of 338.65 on a flat basis. It also broke above the 50 day line after breaking through support last week. On Wednesday, Walmart announced that Home Depot will use same-day and next-day delivery service from discount giant Walmart GoLocal.
Dow Inc. remains below its 50- and 200-day lines despite Thursday’s 2.8% gain. On Wednesday evening, the chemicals giant announced plans to invest more than $ 3 billion in a strategy to improve underlying earnings growth.
Among other top notch winners, Nike (OF), Cisco (CSCO) and caterpillar (CAT) added more than 2% each.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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