Stocks jumped at the starting bell Friday, as strong June retail sales data helped boost the Dow back above 35,000. Moderna rallied after it earned S&P 500 membership. DocuSign and Starbucks rose toward buy points. Meanwhile, Salesforce.com and American Express wrestled for the lead on the Dow Jones today.
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The Dow Jones Industrial Average added about 60 points, up 0.15%. That was enough to regain the 35,000 level, but stopped just short of overtaking the index’s May 10 high at 35,091. The Nasdaq Composite climbed 0.2% and the S&P 500 tacked on a 0.15% gain.
Retail sales jumped 0.6% in June, the Commerce Department reported. That was up from a 1.3% nosedive in May, and counter to expectations for a 0.4% decline. Minus vehicles, sales soared 1.3% vs. May’s 0.7% slip, blowing past forecasts for a 0.5% rise.
Beverly Hills-based Live Nation Entertainment (LYV) jumped 2.3% to lead the S&P 500 after Goldman Sachs launched coverage of the performance venue operator with a buy rating and a price target at 110 — 38% above Thursday’s closing price.
IBD 50 stock Moderna (MRNA) jetted 5.9% higher, topping the Nasdaq 100 on news that it would join the S&P 500 on July 21. Moderna is in the seventh week of an eight-week hold rule, after rising 20% in less than two weeks following an early June breakout.
Also on the Nasdaq, Starbucks (SBUX) ran 1.2% higher as Oppenheimer notched its price target upward to 140, from 135. Starbucks stock ended Thursday a fraction below a 119.08 buy point in a 12-week cup base.
Arista Networks (ANET), a new name on the IBD 50 list, is near a buy point in a three-weeks-tight pattern. Thursday’s IBD 50 Stock To Watch, Element Solutions (ESI), is on track to form a flat base with a 24.80 buy point. Both stocks posted slight gains early Friday.
Dow Jones Today: Intel, Chevron Deals
Intel (INTC) plowed 1.6% higher on the Dow Jones today. The chipmaker was exploring a possible deal to acquire GlobalFoundries, with the Wall Street Journal reporting the deal could be valued near $30 billion.
A deal isn’t certain, and GlobalFoundries has also made moves toward going public in an initial public offering. The Abu Dhabi government’s Mubadala Investment Co. owns the Malta, N.Y.-based chip manufacturing outfit.
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Chevron (CVX) dropped 0.7%, after diesel engine builder Cummins (CMI) signed a memorandum of understanding with the energy producer to develop opportunities in hydrogen and alternative energies. Cummins shares popped 0.5% following the news.
“The energy transition is happening, and we recognize the critical role hydrogen will play in our energy mix,” Amy Davis, vice president and president of New Power at Cummins, said in a written statement.
White House Warns On Hong Kong
China-based stocks generally held up in early trade Friday, despite a spate of negative news. The White House was reportedly preparing to issue an advisory warning U.S. companies about rising risks of doing business in Hong Kong, as regulatory circumstances there reportedly deteriorate.
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In addition, Didi Global (DIDI) fell 3% as Chinese regulators ramped up attention on the ride-hailing giant. Bloomberg reported that Chinese regulators also plan to exempt companies from cybersecurity scrutiny if they opt for public listing on the Hong Kong Stock Exchange rather than the U.S.
TAL Education (TAL) and New Oriental Education (EDU) came under pressure, down 9% and 4.5%, respectively.
Vital Signs: Oil Prices, Bond Yields
Oil prices took a modest bounce following two days of declines, with West Texas Intermediate up 0.3% to just below $72 a barrel. Reuters reported late Wednesday that Saudi Arabia and the United Arab Emirates had reached an agreement, potentially opening the door to an OPEC+ deal that would ease some of the current 5.8 million barrel-per-day curbs placed on Organization of Petroleum Exporting Country members and a group of partners, led by Russia.
WTI oil futures ended down almost 4% for the week, tracking toward a second-straight weekly decline and their worst week since March. Prices on July 6 reached $76.98, their highest level since October 2014.
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Bond yields edged higher after a steep two-day drop. The 10-year bond yield rose to 1.31%, after settling below 1.30% on Thursday. Yields are down more than 4% for the week, heading for their eighth decline in the past nine weeks, and set for a test of support at their 40-week moving average.
Leaderboard: Ford, Tesla, DocuSign
Among IBD Leaderboard stocks, DocuSign (DOCU), Ford Motor (F) and Tesla (TSLA) all notched moderate gains early Friday.
Tesla and Ford may have received a boost from data showing auto registrations in the European Union rose 10.4% in June. Demand for new cars increased 25.2% in the year’s first half. However, that still lagged pre-Covid demand.
Tesla is working to move above its converged 50- and 200-day moving averages, and up the right side of a six-month consolidation. Ford is testing support at its 50-day/10-week line, in the midst of a three-week pullback. A rebound from the line would create a buy opportunity.
DocuSign gained 2% early Friday. The stock is extended after a June breakout from a double-bottom base. IBD MarketSmith analysis also reads the stock as struggling to break out past a 290.33 buy point in a 43-week consolidation.
DocuSign found support at its 21-day moving average on Thursday. A break below that line would indicate a weakening of the stock.
Nasdaq, S&P 500, Dow Jones Today
A tough week for growth stocks left the iShares Russell 1000 Growth ETF (IWF) on Thursday looking toward its first down week since mid-May. The same was true for the Invesco QQQ Trust (QQQ), which slipped 0.1% through Thursday.
The IBD 50 Index dropped 2.1%, heading for a second weekly decline. Faltering breakouts left the Innovator IBD Breakout Opportunities ETF (BOUT) down 3% through Thursday, and back below its 10-week moving average.
The Dow Jones today holds the advantage, up 0.3% advance for the week through Thursday, vs. a 1.1% slip for the Nasdaq Composite and the S&P 500’s 0.2% dip.
While growth stocks have struggled, Walt Disney (DIS), Honeywell International (DIS) and Visa (V) all posted strong weeks. Visa is nearing the top of a buy range above a 237.60 buy point. Honeywell is approaching a 234.12 entry in a cup base.
The Dow on Thursday ended less than 3% below its record high above 35,000, set on May 10. The SPDR Dow Jones Industrial Average ETF Trust (DIA) shows the index is in a buy range above a 348.75 buy point in a double-bottom base.
Watch the Nasdaq to see whether it finds support at its 21-day moving average. And keep in mind that, while the market remains in a confirmed uptrend, IBD’s Big Picture article on Wednesday noted that “some nasty reversals across growth stocks should give readers enough reason to tread carefully with new buys for now.”
Find Alan R. Elliott on Twitter @IBD_Aelliott
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