Stocks defended tight gains early Friday, as the Nasdaq fought to hold above the 14,000 mark. Commodities stocks advanced, with ArcelorMittal, Freeport McMoRan and Cleveland Cliffs notching solid gains. Caterpillar rebounded on the Dow Jones today, after a steep drop on Thursday.
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The Dow industrials jumped 120 points at the starting bell, then pared gains to less than 0.1%. The S&P 500 added 0.1%, holding just below Thursday’s record high. The Nasdaq Composite added 0.2%, despite biotechs Vertex Pharmaceuticals (VRTX) and Incyte (INCY) dragged on premarket action on the stock market today.
At the top of the Nasdaq 100, DocuSign (DOCU) rallied 2.5%, extending its breakout from a double bottom base.
Biogen (BIIB) jumped 1.8%. Bernstein upgraded the stock to outperform with a 500 price target. Data storage leader Western Digital (WDC) ran 2.8% higher, as Susquehanna raised the stock’s price target to 155, from 125, and kept its rating at positive.
Vertex Pharmaceuticals dived more than 8%, as two analysts lowered price targets after the company announced disappointing results from a Phase 2 clinical trial. Incyte dropped 3.9%, after the Food and Drug Administration extended the review period for a dermatitis treatment.
Ore miner Freeport McMoRan (FCX) gained 4.1% in early action, leading the S&P 500. The gain put the stock in a buy range on a rebound from its 10-week moving average.
Luxembourg-based Ternium (TX) led rising steelmakers, rallying 5.2%. IBD 50 stock Cleveland Cliffs (CLF) added 4.8%, putting the shares ahead 18.7% so far this week.
Dow Jones Today: Can CAT Rebound?
Chemicals maker Dow (DOW) led the early gains on the Dow Jones today with a 0.8% advance. Caterpillar (CAT) pared its gain to 0.1%, sruggling to rebound after taking a 3.8% dive on Thursday.
That left Caterpillar shares down 7.5% for the week through Thursday and on track for their worst weekly performance in 12 months. The loss sent the stock back below its 50-day moving average in heavy trade, and erased gains from an early May breakout. Both are sell signals.
Despite the loss, CAT stock still holds the sixth-largest gain among Dow Jones stocks so far this year, with a 24% advance through Thursday.
Premarket: Global-E, AMC, Dave & Buster’s Rising
Israel-based new issue Global-E Online (GLBE) rallied more than 8%, after ending Thursday with an 8.4% gain so far for the week. The stock is up 74% from its May 12 initial offering price, but has not yet formed an IPO base.
Earnings news sent restaurant and arcade chain Dave & Buster’s Entertainment (PLAY) to a 5.2% gain. Two analysts raised their price targets on the stock.
Meme stocks cooled their early action, with GameStop (GME) narrowing to a 2.4% gain, and AMC Entertainment (AMC) reversing lower. Workhorse Group (WKHS) gained 2.9%. A possible new entry to the list, Customers Bancorp (CUBI), quieted to a 1.6% advance in early action.
Apollo Medical (AMEH) jumped 13% after Standard & Poor’s announced late Thursday that the Russell 2000 issue would also join the S&P Smallcap 600 index. Apollo shares are up 120% since Dec. 31.
IBD 50/Leaderboard: Arcelor, Freedom Holding
IBD 50 stock Celsius Holdings (CELH) rebounded 1.3%, following its 15% nosedive on Thursday. Credit Suisse upgraded the stock to outperform, with a 78 price target, up from 57.
Among Leaderboard stocks, steelmaker ArcelorMittal (MT) ticked up 2.4% and ServiceNow (NOW) clocked a 1.1% advance. Arcelor remains in a buy range following a rebound from its 10-week moving average. The buy zone extends to 33.65.
IBD 50 stock Kazakhstan-based Freedom Holding (FRHC) vaulted 4.4% in premarket trade. That put the brokerage and financial services provider into a buy zone above a 58.20 buy point in a 17-week double-bottom base.
Bitcoin Holds Above $37,000
Bitcoin slipped 1%, holding above $37,500 early Friday, 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 now up a fraction since the start of June, with a year-to-date gain of almost 29%.
Vital Signs: Yield Pullback Continues
Oil and copper prices were firm, as bonds yields edged off lows Friday. The 10-year Treasury yield eased higher, to 1.46%, after settling just below 1.46% on Thursday, according to CBOE data.
Yields are in the midst of a four-week pullback, tracking toward their sharpest weekly decline since December. The 10-year yield hit a 13-month high above 1.76% on March 30.
Markets have kept 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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Dow Jones Today: Bringing Up The Rear
The S&P 500 took a new high and the Nasdaq closed back above 14,000 on Thursday. The Dow Jones today opens as the market’s laggard for the week, down 0.8% through Thursday. The S&P 500 is up 0.2%. The Nasdaq has a 1.5% gain, as it reaches for its fourth-straight weekly advance.
The IBD 50 Index has a 1.5% gain so far for the week, and is just even with its 10-week moving average. The Innovator IBD 50 ETF (FFTY) is down 0.3%. The Innovator IBD Breakout Opportunities ETF (BOUT) shows a 0.4% decline.
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, Tuesday and Thursday, giving it some momentum as it heads into the test of resistance at 14,000.
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The improved market status suggests investors adopt a slightly more aggressive game plan. However, 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.
Investors who are rotating back out of cash, and into fundamentally strong stocks and ETFs breaking out from sound chart patterns, should not 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.
Stocks To Watch: Alphabet, Applied Material
Among the growth stocks flagged by IBD’s Investing Action Plan this week, Google parent Alphabet (GOOGL) has gained 1.7%, closing on Thursday just above a flat base buy point at 2,431.48. Alphabet is in the current IBD Leaderboard line up.
Dell Technologies (DELL) has a 0.3% gain. It ended Thursday in a buy range above a 103.90 flat base entry. Dell is an IBD SwingTrader listing.
Applied Materials (AMAT) is down 1.2% for the week, testing support at its 50-day moving average. Shares have formed a handle that lowers the stock’s buy point to 142.22, from 146.10. Applied Materials is an IBD Leaderboard stock.
A three-day rally has left Bio Techne (TECH) up 2.7%. Shares are working on a fourth-straight weekly advance, finishing Thursday 2% below a 444.93 buy point from a flat base.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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