Stocks opened higher Thursday as the Dow industrials and S&P 500 pushed to new highs. Tesla and Walgreens Boots Alliance led the sharply rebounding Nasdaq, with chip stocks crowded in close behind. Corsair Gaming exited its buy range, while Target moved higher above a buy point. JPMorgan topped the Dow Jones today, after a handful of analyst upgrades.
The Dow Jones Industrial Average rallied 230 points at the starting bell, up 0.8%, with an added early boost from the Labor Department reporting a slight downtick in weekly unemployment claims. The S&P 500 powered up 1.4%, while the Nasdaq swept to a 2.1% advance on the stock market today , after lagging the market’s otherwise broad gains on Wednesday.
Additive print leader 3D Systems (DDD) spiked 28% top the top of the S&P 500 after updating Q4 revenue guidance to well above analyst expectations. IT consultant DXC Technology (DXC) surged 9% after Reuters reported France’s Atos had floated a $10 billion takeover pitch in early discussions. Also near the top of the index, specialty chemicals leader Albermarle (ALB) climbed 4.1%, and solar components maker SolarEdge (SEDG) rose 1.7%.
Just behind Walgreens at the top of the Nasdaq 100, Tesla (TSLA) jumped 4%. RBC Capital upgraded Tesla to sector perform, with a lagging price target at 700 — about 7% below Wednesday’s closing price.
Small banks were on the radar early Thursday, after posting a strong session on Wednesday. Southside Bancshares (SBSI), HomeStreet (HMST) and Community Bank System (CBU) were all flat to lower in premarket trade, after scoring breakouts on Wednesday. All three stocks added to their breakout gains early Thursday.
IBD 50/Leaderboard: Corsair, Target
Growth stocks took some of Wednesday’s hardest hits on the S&P 500. Nvidia (NVDA) dropped 5.9%. ServiceNow (NOW) lost 4.6%. Etsy (ETSY) posted a 4.2% decline. The losses marked breaches of 10-week support for Nvidia and ServiceNow, both IBD Leaderboard stocks. Etsy is on the IBD 50 list.
On Thursday, Nvidia rebounded almost 4% in early trade Thursday. ServiceNow tooked back a 1% gain. Etsy climbed 2.1%.
Corsair Gaming (CRSR) jumped into the IBD Leaderboard lineup, rising 5.5% Wednesday after finding support at its 10-week moving average for the first time since its September initial offering. Shares rose another 3.3% Thursday, sending shares beyond the buy range that petered out at 38.67. Shares are about 130% above their IPO price.
Leaderboard listing Target (TGT) ticked up 0.4% Thursday, after scoring a breakout Wednesday above a flat base buy point at 181.27. Shares are nearing the top of the entry’s buy range, which runs to 190.33.
Dow Jones Today: Walgreens Earnings, AmerisourceBergen Deal
Walgreens Boots Alliance (WBA) powered up 5%, leading the Dow Jones today, after sealing the sale of wholesale pharmacy unit, Alliance Healthcare, to drug distribution giant AmerisourceBergen (ABC) for $6.5 billion. The companies expect cost-saving synergies of $75 million apiece by 2025. AmerisourceBergen shares edged a fraction higher.
Walgreens also topped quarterly earnings forecasts early Thursday, and reported revenue growth of 5.7% — well above the analysts’ target.
The pharmacy chain’s shares have dropped 50% since December 2018. Analysts are likely to offer perspectives on whether the Alliance sale could mark a turnaround for the company. Thursday’s early move lifted shares to just below a 44.97 buy point in an eight-week bottoming base.
Jobless Claims Dip Slightly
First-time unemployment claims held largely flat during the week ended Jan. 2, the Labor Department reported, with 787,000 Americans filing applications. That was just below the prior week’s upwardly revised 790,000 claims, and below economist projections for 803,000 filings. The Pandemic Unemployment Assistance (PUA) program reported 161,460 new applications. The PUA provides benefits to gig workers and self-employed workers who would not normally be eligible for regular state unemployment. The total number of Americans receiving unemployment benefits is 19.2 million.
Bitcoin Rallies Past $38,000
Bitcoin traded 11.7% higher, touching record highs above $38,500, according to CoinDesk. The cryptocurrency has gained nearly 32% since the start of January.
Among bitcoin-related stocks, MicroStrategy (MSTR) rallied 6.7%, while Marathon Patent Group (MARA) posted a 16% premarket advance. China-based The9 Ltd. (NCTY) spiked 41% in premarket action, after soaring 320% for the week through Wednesday. The online gaming provider on Monday entered agreements with a group of investors in cryptocurrency mining industries.
Alternative Energy: Plug Power, Bloom Energy, ReneSola Rally
Hydrogen fuel cell leader Plug Power (PLUG) scorched 29% higher, leading the Russell 2000, after South Korean conglomerate SK Group announced a $1.5 billion strategic investment to form a joint venture in South Korea. The deal represents a 10% position in the Latham, N.Y.-based company. H.C. Wainwright reiterated its buy rating and cranked up the stock’s price target to 60, from 35. Plug rebounded 7.5% on Wednesday, and closed 1007.5% above its Dec. 31, 2019 price.
Among China-based solar names, ReneSola (SOL) bolted 13.7% higher and JinkoSolar (JKS) climbed 3.4%. JinkoSolar is riding support at its 10-week moving average, in what has been a very volatile basing pattern.
Biden Confirmation, Georgia Senate Races
In Georgia, a record-setting runoff election turnout produced surprise victories for Raphael Warnock and Jon Ossoff, both Democrat challengers. The wins leave the U.S. Senate evenly divided, throwing the deciding vote to incoming Vice President Kamala Harris. This technically leaves Democrats with unified control of the House, Senate and presidency. And while the actual execution of policy across the broad political diversity of the party is likely to be far from unified, it gains advantage in the currently deeply fractured status of the Republican party.
In Washington, D.C., House and Senate lawmakers recovered late Wednesday after rioters successfully sought to disrupt confirmation of the electoral college vote, a process which formally enters results of the Nov. 3 presidential election into the Congressional record. Insurgents overwhelmed an insufficient police presence, broke through doors and windows to seize and occupy the capitol. One rioter — who the Washington Post reported was an Air Force veteran who served in Afghanistan and Iraq — was killed entering the building as Representatives and Senators were evacuated to safe zones.
After the capitol building was eventually cleared by police and National Guard forces, lawmakers returned, working through Wednesday night. Early Thursday morning, Vice President Mike Pence affirmed the vote count and confirmed Joe Biden and Kamala Harris as the official winners of the November election, and as the next U.S. president and vice president.
Outside of Washington, D.C., law enforcement authorities escorted lawmakers from capitols and other buildings being threatened by pro-Trump protestors in Salt Lake City, Utah; Olympia, Wash.; Salem, Ore.; Atlanta; and Topeka, Kansas. Less threatening demonstrations took place in a number of other states.
Smith & Wesson, Generac Holdings Pass Buy Points
Stocks associated with civil unrest did particularly well Wednesday. Smith & Wesson Brands (SWBI) spiked more than 18%, breaking out above a 22.50 buy point in a 17-week cup base. Shares backtracked 4.5% in early trade Thursday.
Emergency generator maker Generac Holdings (GNRC) leapt 8% on Wednesday, retaking a flat-base buy point at 234.65 after a bounce off support at its 21-day exponential moving average. Generac, an IBD Leaderboard stock, was raised to a three-quarters position size on Wednesday. Shares gined 1.9% Thursday.
Covid Vaccine Update: Moderna, BioNTech, CureVac
Biotech vaccine makers were in motion, as the Centers for Disease Control reported the ratio of vaccinations to distributed doses improved to 30% on Wednesday. Germany-based BioNTech (BNTX), Pfizer‘s (PFE) vaccine partner, rose 2.6% as it angled toward a fourth straight advance. Cambridge, Mass.-based Moderna (MRNA) rallied 1.6% after the European Medicines Agency recommended on Wednesday that Moderna’s vaccine be granted authorization for use in the European Union.
Moderna shares are attempting to regain support at their 10-week moving average, after erasing most of the 87% gain that followed a mid-November breakout.
Another German biotech, CureVac (CVAC), jumped 12.2% in premarket action. The company announced it had reached a development and manufacturing deal with German drugmaker Bayer AG (BAYRY), regarding CureVac’s Covid-19 vaccine candidate. CureVac has given back essentially all of a 78% advance that followed its IPO base breakout. Bayer stock rose 1.6% in early trade.
Dow Jones Today: Apple Tests Support
Apple (AAPL) climbed 1.4% early Thursday, trading near the top of the Dow Jones today. A company statement on Wednesday said app customers spent $1.8 billion in the week-long interim between the Christmas and New Year’s holidays. Game sales were the driving force for turnover, with “Among Us” and “Roblox” being the most popular titles.
Apple stock slipped narrowly below its 21-day exponential moving average on Wednesday, holding comfortably above a 125.49 entry, but having tripped the automatic sell rule for investors who bought the Leaderboard stock’s brief peek above a cup-base buy point at 138.08.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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