The Dow Jones Industrial Average climbed 250 points Thursday morning, reflecting positive global trade, as investors digested an early raft of jobs data. The highly anticipated U.S. payrolls report is due out Friday morning.
Biotech Seagen (SGEN) was an early leader on the Nasdaq, up more than 3% on reports that Merck (MRK) could be near a takeover agreement. Freeport McMoRan (FCX), Caterpillar (CAT) and Cummins (CMI) led miners and related stocks at the top of the S&P 500, as copper prices rebounded following a $220 billion stimulus proposal in China.
Chip stocks received an early boost after South Korea-based Samsung reported better-than-expected earnings guidance for the second quarter. Advanced Micro Devices (AMD) and Nvidia (NVDA) rose 4.5% and 3.3%, respectively.
In a volatile stock market environment, Dow Jones leaders Johnson & Johnson (JNJ), Merck and UnitedHealth (UNH) — as well as AutoZone (AZO), BYD (BYDDF), Evolent Health (EVH) and Quanta Services (PWR) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.
Dow Jones Today: Treasury Yields, Oil Prices, Jobs Data
After Thursday’s open, the Dow Jones Industrial Average rose 0.8%, and the S&P 500 moved up 1%. The Nasdaq gained 1.4% in morning trade.
The 10-year Treasury yield ticked higher to 2.93% Thursday following Wednesday’s climb to 2.91%. In mid-June, it hit its highest level since April 2011, at 3.48%. Meanwhile, U.S. oil prices looked to take back some of this week’s sharp losses, with West Texas Intermediate trading around $102 a barrel. In early March, WTI briefly topped out above $130.
The Labor Department said first-time unemployment claims rose to 235,000, above estimates and ahead of the prior week’s 231,000.
Earlier Thursday, U.S.-based employers announced 32,517 job cuts in June, a 58.8% increase from the 20,476 cuts announced in the same month last year. It is 57% higher than the 20,712 cuts announced in May, according to Challenger.
Those reports preface Friday’s U.S. payrolls report. Econoday estimates expect U.S. employers to have added 270,000 jobs in June, a sharp drop from the 390,000 jobs added in May.
Stock Market Volatility
On Wednesday, the stock market reversed from early losses to end with modest gains. The S&P 500 led the way, gaining 0.4%.
Wednesday’s The Big Picture column commented, “The Nasdaq composite showed noteworthy price action with a move above its 21-day exponential average. But a 1% late gain faded to 0.3% by the close. Still, the index closed above its 21-day line, which has been a resistance level since May. The longer the Nasdaq can hold above the 21-day line, the better chance it has of making a run toward its 50-day line.”
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Dow Jones Stocks To Watch: Johnson & Johnson, Merck, UnitedHealth
Dow Jones leader Johnson & Johnson is about 2% below a double-bottom base’s 181.84 buy point following Wednesday’s 0.1% rise, according to IBD MarketSmith chart analysis. JNJ shares inched higher Thursday morning.
Drug giant Merck rose 0.5% Wednesday, and is about 2% below its flat base’s 95.02 buy point. Early Thursday, the stock was slightly higher after the Wall Street Journal reported Merck is in talks to acquire Seagen in a deal that could be worth roughly $40 billion or more. Medical stocks in general, and biotechs in particular, have shown rising strength in recent stock market action.
Health care giant and IBD Leaderboard stock UnitedHealth regained its double bottom’s 507.36 buy point during Wednesday’s 2% advance. Shares are back in buy range. The stock added 0.1% Thursday morning. UNH reports second-quarter results on July 15.
UNH stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Top Stocks To Watch: AutoZone, BYD, Evolent Health, Quanta
AutoZone shares are still trading in buy range past their cup-with-handle’s 2,130.60 buy point Wednesday amid a 1.3% gain. Shares were up 0.1% Thursday.
Chinese electric-vehicle giant BYD, which is backed by Warren Buffett’s Berkshire Hathaway (BRKA), closed Wednesday further above a cup-with-handle’s 39.81 buy point. Shares were up nearly 3% early Thursday morning.
IBD Leaderboard stock Evolent Health is in buy range past a 32.55 buy point in a cup with handle following Wednesday’s 4.5% breakout move. The 5% chase zone runs up to 34.18. Evolent shares gained 2% Thursday.
Quanta Services is tracing a messy cup with handle that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Last week, shares found strong support around their 50-day line, which is a key level to watch. Quanta stock was up 1.5% Thursday morning.
Tesla stock slid 0.6% on Wednesday, snapping a two-day win streak. Shares looked to rebound from those losses Thursday morning, moving up around 3%.
The stock is sharply below its 50- and 200-day moving averages. Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 44% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 1% Wednesday, climbing for a third straight session. But the stock remains far below its long-term 200-day line. A test of the 50-day line could be imminent. The stock is about 22% off its 52-week high. Apple shares moved up 1.7% Thursday morning.
Software leader Microsoft climbed 1.3% Wednesday, closing above its 50-day line for the first time since April 7. The stock closed about 24% off its 52-week high. Microsoft shares gained 0.6% early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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