Stocks jumped into early gains Friday, as the Dow and S&P 500 aimed to extend rebounds from support, and the Nasdaq scrambled narrowly back above the 13,000 mark. JD.com leapt to lead the Nasdaq 100 in a volatile morning for China-based issues. A rebounding Nike led the Dow Jones today, even as China amplified its response to corporate pressure on labor practices in Xinjiang.
The Dow industrials grabbed a quick 110-point gain, trading 0.4% higher on the stock market today. The S&P 500 also jumped 0.4%, while the Nasdaq Composite accelerated to a 0.5% advance. President Biden, in his first press conference on Thursday, doubled his administration’s vaccination target for its first 100 days, while touting a decline in jobless claims and economist forecasts for 6% GDP growth for the U.S. economy.
JD.com (JD) rallied 3.3%, leading the Nasdaq 100. China-based issues trading in the U.S. had swung wild after the Securities Exchange Commission said on Wednesday said it had begun an effort requiring China companies to permit U.S. regulator to review their financial audits. Companies preventing such review over a three-year period are subject to delisting from the NYSE or Nasdaq, according to new rules passed by Congress in December.
Energy, travel and materials issues ran high on the S&P 500. At the top of the S&P 500, Victoria’s Secret parent Limited Brands (LB) vaulted 6.8% after raising its fiscal first-quarter guidance. Steelmaker Nucor (NUE) rallied 5.8%, spiking to a new high.
On the earnings front, security software provider Telos (TLS) rocketed 22% after reporting quarterly results. Aspira Womens Health (AWH) rose more than 8%. The low-priced stock is trading below a 9.27 buy point in a cup-with-handle base.
On the downside, Salt Lake City-based biotech Co-Diagnostics (CODX) dropped more than 12%. Electric vehicle-charging station leader Blink Charging (BLNK) shook off premarket losses and gained 0.8% on earnings news.
On The Radar: Elite Education, VipShop, ArcelorMittal
IBD Leaderboard stock ArcelorMittal (MT) jumped 4.6%, exiting buy range above a 25.86 cup-base buy point. Shares have wrestled to maintain their breakout, as well as hold support at their 21-day line. The buy range runs to 27.15.
Elite Education Group International (EEIQ) is a stock to watch on Friday, opening 587% higher in its second day of trade. The Ohio-based company “facilitates study-abroad and post-study services for Chinese students in the U.S.,” according to the Dayton Business Journal. The stock priced at 8 on Thursday and closed at 4 in its first day of trade.
Dow Jones Today: Nike, Banks Lead
Nike (NKE) powered up 2.8%, leading the upside on the Dow Jones today. Baird upgraded the stock to outperform after holding steady at a neutral for the past two years. The price target was unchanged at 150, and the note projected that current supply chain and China market concerns were temporary.
China state media launched a boycott threat against several companies, including Nike and Sweden’s H&M (HNNMY), which had stopped purchasing cotton sourced in China’s Xinjiang region. Multiple investigations found evidence of state-run concentration camps and forced labor among the region’s Uyghur minority. China state and media sources on Thursday threatened a boycott in the country that generates 19% of Nike revenue.
Nike stock fell as much as 6% on Thursday, recovering to a 3.4% loss at the close. The chart damage fractured a basing effort underway, stopping just short of a test of support at its 200-day line.
JPMorgan Chase (JPM) and Goldman Sachs (GS) each rose more than 1%, trading high on the Dow Jones today. The Federal Reserve on Thursday announced that big financial firms can start buybacks and dividend hikes beginning on June 30, after first passing the latest round of stress tests. Previously, the Fed had said those higher shareholder returns could start in the first quarter.
Both stocks are extended. Goldman Sachs is working on its fifth consecutive monthly gain. JPMorgan is building on its sixth-straight monthly advance.
Market Vital Signs: Bonds, Bitcoin, Oil
Stock markets across Asia rallied Friday, ending the week on a positive note as global markets responded, in part, to the Fed’s updated bank rules and positive comments from President Biden on Thursday. Benchmarks in Europe traded moderately higher in afternoon action, with the FTSE 100 in London and Germany’s DAX each showing gains of more than 0.7%.
Bonds extended Thursday’s rebound, with the 10-year Treasury yield up 3 more basis points to 1.66%. Yields have staged a quick rise from the pandemic’s record lows around 0.50% in August. They approached pre-pandemic levels late last week, climbing above 1.75% — the highest level since January 2020. Yields had started 2020 at around 1.8%, which was down from about 2.7% a year earlier.
Cryptocurrency stocks ran higher as Bitcoin edged above $53,000, after dipping below $51,000 on Thursday, according to CoinDesk. The cryptocurrency climbed to a record high at $61,556 on March 13.
Oil prices continued to bob wildly, rising sharply early Friday. Markets grappled with a global oil supply chain pinched by a cargo ship grounded and blocking the mouth of the busy Suez Canal in Egypt, the daily conduit for 10% of the world’s seaborne oil supply. West Texas Intermediate jumped 2.3%, to just below $60 a barrel. At the end of trade on Thursday, WTI was down 4.7% for the week, and tracking toward a third weekly decline.
Dow Jones Today: A Weekly Gain, or Loss?
Futures action suggests the Dow Jones today continues to hold the market high ground, after a rebound from support at its 21-day exponential moving average on Thursday. The Dow ended Thursday’s session with a fractional loss thus far for the week. The S&P 500 was also narrowly lower, after a quick bounce off its 50-day line. Meanwhile, the Nasdaq had shed 1.8% in a slide below key levels of support and holding just below the 13,000 level.
A 2.3% gain by the Russell 2000 on Thursday narrowed the index’s loss for the week to 4.6%. IBD downgraded its market outlook on Wednesday, to uptrend under pressure, after Monday’s Big Picture article underscored that the stock market’s uptrend remained delicate.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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