Dow Jones Today, Downgrading Futures, Improving Jobs Data; AMC overthrows Meme Spike, Tesla set to cut backing
Stock futures cut some initial losses ahead of Thursday’s open, after stronger-than-expected unemployment and hiring data, and as the Dow looked set to break its five-day lead. The earnings news positioned search engine Elastic and retailer Conn’s for early breakouts. AMC Entertainment has taken the plunge after reversing a first wave of memes exchanges. And on the Dow Jones today, five stocks have hovered in buy ranges.
Futures contracts on Dow Jones fell 0.4%. Futures contracts on the S&P 500 fell 0.6% below fair value. Nasdaq 100 futures fell 0.9% in the stock market today as mixed earnings results were sent Splunk (SPLK) at the bottom of the list, and You’re here (TSLA) fell by almost 2%.
Game Creator Take-Two Interactive (OF THEM) led the S&P 500, up 1.1% after Jefferies upgraded the buyable stock and raised its price target to 231. It was more than 31% above Wednesday’s closing price.
Search engine provider Elastic (ESTC) marked a 10% lead, despite mixed results in the first quarter and forecasts below analysts’ expectations.
Texas-based electronics retailer Conn’s (CONNECTICUT) jumped 6.2%, trading at a high level among Russell 2000 stocks, after beating a big beat in earnings in the first quarter. The move positioned the stocks for a starting bell breakout beyond a buy point of 24.04 in a six week cut base.
Weekly unemployment claims, hiring may improve
Employment data took center stage Thursday morning, as payroll manager ADP announced that private US non-farm employers hired 978,000 new workers in May. That was nearly 28% above April’s 742,000 new hires, and well above expectations of a slowdown to 650,000 new jobs. The earnings were evenly distributed among small, medium and large employers. Employers in the service sector made 87% of the hires during the month.
Data from the Ministry of Labor showed initial claims for unemployment assistance fell to 385,000 in the week ending May 29. This was down from 405,000 the previous week and below the 400,000 new claims expected by economists.
Together, the two reports preface the larger May wage report due by the Labor Department on Friday. White House negotiators are also due to meet on Friday with Senator Shelley Moore Capito, RW.Va., whose Republicans have been named chief negotiator in talks over the $ 2.3 trillion infrastructure spending and jobs plan. dollars from President Joe Biden.
The Labor Department also maintained its estimate of non-farm productivity in the first quarter: up 5.4%. He revised his estimate of the increase in unit labor costs to 1.7%, from an initial decrease of 0.3%.
Purchasing Manager Indices are due for release by researcher Markit at 9:45 a.m.ET and by the Institute for Supply Management at 10:00 a.m.ET.
Dow Jones today: Organon spin-off from Merck
Merck (MRK) pulled back from its first dive and rose 0.6% on the Dow today. The company is preparing to launch the spin-off of its Organon unit. The Netherlands-based spin-off, a producer of treatments related to women’s health, is expected to start trading on Thursday under the ticker OGN. SVB Leerink lowered the price target for Merck to 99.
Tesla stock poised to break support
Tesla stock fell sharply on Thursday, after falling 3% to 605.12 on Wednesday. Shares on Wednesday closed above the chart’s 200-day moving average after testing that long-term support.
The stock fell 1.7% before Thursday’s open, signaling a move below 200-day support – a level from which the stock has been struggling to break free since mid-May. Tesla remains above its May 19 low of 546.98, and still well below the record of 900.40 set on January 25.
In a week of bad news, Tesla CEO Elon Musk again tweeted that chip shortages were having a major impact on operations. Tesla has recalled certain Model 3 and Y vehicles due to possible loose bolts. And documents from the Securities and Exchange Commission show that the watchdog believed Tesla was not reviewing Musk’s tweets, violating an earlier agreement with the company.
Meme Stocks: AMC Slips, BlackBerry Spikes
Cinema channel AMC Entertainment (AMC) canceled an initial 20% gain, falling 8% after the company announced an offer of up to 11.55 million shares. The stock was up 139.5% in the week through Wednesday, thanks to investors based on Reddit.
Blackberry (BB) traded more than 16.7% higher, after rising 51% for the week to Wednesday. Among other recent memes stock games, Bed, bath and beyond (BBBY) fell 9.2% in early trade. Koss (KOSS) plunged 12.4%. GameStop (GME) is down 4.8%.
Dow Jones today: a blank canvas
The Dow Jones now looks set to end its modest five-day run. The 0.8% advance over the five sessions left the Dow Jones just below the 35,000 level, and still 1.4% below its May 10 high.
However, the volume increased in four of the five days, signaling positive institutional activity. The result leaves the index in a sort of blank canvas area with positive points, such as an uptrend, volume and technical support that are roughly balanced against negative points, or resistance at 35,000.
For a more detailed analysis of the current stock market and its state, study the big picture.
This should come as no surprise, as the White House grapples with Congress over the size and shape of a massive infrastructure spending program, and with the Federal Reserve apparently moving towards some sort of change in its monetary support strategy.
So while 18 of the 30 components of the Dow Jones have advanced over the past four weeks, only nine of them have gained more than 2%. Boeing (BA) was the main driver, up 12% in those four weeks. Salesforce.com (CRM) has a gain of 8.9%. Goldman Sachs (GS), JP Morgan (JPM) and American Express (AXP) are up 7.2%, 5.4% and 5% respectively.
But seven of those nine stocks – and several other Dow Jones issues – have sketched actionable graphical patterns. Goldman Sachs, Caterpillar, American Express, Cisco Systems and JPMorgan are in the buying ranges.
Boeing is heading for its third consecutive weekly lead, climbing to the right side of what IBD MarketSmith Analysis graphics as a base for 12 week mug.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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