Stocks stuck to mixed trade Friday despite strong March housing data and some record-setting GDP data from China helping boost global trade. Stocks including PPG, Lattice Semiconductor and IBD 50 stock Progyny blasted to early breakouts. On the Dow Jones today, Cisco Systems and Caterpillar also closed in on buy points.
The Dow industrials and the S&P 500 both opened at new highs, though the Dow quickly cooled to a 0.4% gain and the S&P 500 advanced 0.2%. The Nasdaq Composite pared losses, trading down 0.1% on the stock market today, as Splunk (SPLK) fell hard to the bottom of the Nasdaq 100 after an analyst downgrade, and Paypal Holdings (PYPL), Tesla (TSLA) and Netflix (NFLX) all lost ground.
Alexion Pharmaceuticals (ALXN) rallied more than 4%, leading the Nasdaq 100. U.K.-based AstraZeneca (AZN) announced that U.S. regulators had approved its purchase of the Boston-based biotech. The companies announced the $39 billion deal in December.
Fertility specialist Progyny (PGNY) jumped 7.2% in early action, easily leading the IBD 50 list. Standard & Poor’s said late Thursday the company would join the S&P 400 Index, along with Lattice Semiconductor (LSCC), beginning April 20. Progyny shares closed Thursday about 6% below a 53.58 buy point on an eight-week cup base.
Lattice Semiconductor rallied 9% on the S&P 400 news, positioning the Oregon-based chip developer for a potential starting bell breakout past a cup-base buy point at 51.59. Standard & Poor’s also announced software developer PTC (PTC) would move from the S&P 400 to the S&P 500 on April 20. PTC shares dipped 0.5%, pointing to a possible breakout past a 147.77 buy point in a six-week cup base.
Cisco Leads Dow Jones Today, Nears Buy Point
Cisco Systems (CSCO) set up the early pace on the Dow Jones today, rising 2.6% after Wolfe Research upgraded the stock to outperform, from peer perform. The note set the stock’s target price at 63, about 22% above where shares closed on Thursday.
Cisco stock is rebounding from support at its 21-day exponential moving average, and just pennies below 53.04 buy point in a three-weeks-tight base pattern.
Home Depot (HD) grabbed a 1.5% gain, tracking toward a sixth straight weekly advance. Bank of America boosted teh stock’s price target to 375, from 360. Home Depot stock is extended, up almost 12% following a breakout in late March.
March Housing Starts Soar; China Reports GDP
Housing starts soared to an annualized rate of 1.739 million in March, the Commerce Department reported. That was a massive 22% jump over February’s rate of 1.421 million, and well above expectations for a pace of 1.620 million starts.
Building permits rose a more modest 3%, to an annualized rate of 1.766 million. Economists had projected an uptick to 1.75 million permits.
The University of Michigan’s preliminary April Consumer Sentiment Index reading showed an uptick to 86.5, vs. February’s original 84.9 tally. Friday’s note revised the February reading upward to 89, making the reading for March technically a decline.
China stocks were moderately positive after official data released Friday showed China’s GDP grew at a record pace of 18.3% in the first quarter. Record growth was broadly expected as the economy recovers vs. historically weak first-quarter 2020 global performance. Bloomberg had reported economist expectations for an 18.5% gain.
Earnings News: Alcoa, PPG, JBHunt
Aluminum miner Alcoa (AA), paint and coatings manufacturer PPG Industries (PPG) and super-regional bank PNC Financial (PNC), three of Pittsburgh’s largest companies, reported quarterly results late Thursday. Alcoa rose more than 7%, setting its sights on a new high. PNC was up 2.4%, in a buy range on a rebound from its 10-week moving average.
PPG Industries rallied more than 10%, topping the S&P 500, after it reported that earnings jumped 21% in its first quarter. Also, sales growth turned positive after a three-quarter slump. Raw materials cost growth accelerated, but management said that for the remainder of the year “we expect overall global coatings demand growth to be broad-based across most of the end-use markets that we supply.”
PPG is perched just even with a 153.91 buy point, following a pullback below that entry to test 10-week support.
Trucking fleet/logistics leader JB Hunt Transportation Services (JBHT) jetted up 4% to a new high after scoring a solid first-quarter sales and earnings beat. Industry peer Marten Transport (MRTN) gained 1.6%, after reporting mixed results late Thursday.
Banks, in addition to PNC, were also on the earnings advancers list, with Western Alliance (WAL) up 2.8% and Ally Financial (ALLY) knocking out a 3.3% after reporting results. Investment banker Morgan StanleyMS slipped 1.1% in early trade as investors sorted through its first-quart earnings results.
Vital Signs: Oil, Bond Yields
Oil price futures were steady after a four-day advance lifted West Texas Intermediate almost 7%, the best week for oil since the start of March. WTI was down steady above $63 a barrel early Friday. A surge on Wednesday punched prices to their highest level since mid-March, but still below an early-March high at $65.05. Oil prices are an important confidence indicator for the recovering economy.
Bonds dipped after a surge in demand Thursday sent yields to their largest single-day drop since November. CBOE data showed the 10-year yield closing Thursday at 1.53%, and trading around 1.57% early Friday.
Yields skirted pre-pandemic levels early this month, climbing above 1.76% — the highest level since January 2020.
Bitcoin, Coinbase IPO Trade Lower
Bitcoin continued to pull back after touching a new high above $64,800 on Wednesday. The cryptocurrency was down about 3% and holding just above $60,000 early Thursday, according to CoinDesk. It remains up more than 108% since Dec. 31.
Shares of cryptocurrency exchange Coinbase Global (COIN) jumped 31% in their initial public offering on Wednesday. The Coinbase IPO rocketed as much as 66% higher intraday, ending the session at 323.28 to give the company a market valuation of $87.3 billion. Coinbase stock gained 1.6% early Friday.
CAN SLIM rules advise against jumping into IPOs too early, amid all the initial offering speculation and excitement. It is better to sit and watch the new stock’s chart. Waiting for it to form and breakout from an IPO base helps limit downside risk.
Dow Jones, S&P 500 Set Pace, Nasdaq Eyes Record High
The Dow Jones today opens with a 0.7% gain through Thursday and tracking toward what could be a fourth-straight weekly advance. It leads the big three benchmarks with an 11.2% gain since Dec. 31. The S&P 500 has a 1% gain for the week and is up 11% this year. The Nasdaq is also up 1% for the week, opening just a fraction below its Feb. 16 record, and with a year-to-date gain of 8.2%.
UnitedHealth Group (UNH) has the biggest move among Dow Jones stocks over the past five sessions, up 6.9%. Shares are extended after receiving a big boost from its first-quarter earnings report on Thursday.
Honeywell (HON) climbed 4.5%, making it the week’s next-largest gain among Dow Jones stocks. Salesforce.com (CRM) was next in line with a 3.8% gain. Salesforce has now completed a valid double-bottom base with a buy point at 251.33. Shares finished Thursday about 8% below that entry.
Dow Jones Today: Caterpillar’s Bullish New Buy Point
Despite the Dow’s four-week gain, Boeing (BA), Intel (INTC) and Amgen (AMGN) remain in buy ranges or just below buy points with earnings rolling around. Intel and Honeywell report earnings next week, along with a half-dozen other Dow Jones names.
Apple (AAPL) has also shaped a cup, with an operable buy point at 145.19, also 8% above where the stock ended on Thursday.
Microsoft (MSFT) is extended. A rebounding Walgreens Boots Alliance (WBA) has the Dow’s largest year-to-date gain, up almost 35%. Intel has a 30.5% gain. Goldman Sachs has rallied 28.4%, and remains in a buy range on a rebound from its 10-week moving average.
Caterpillar (CAT) remains a blue chip stock to watch. Up almost 28% since the start of the year, the stock is now riding firm support at its 21-day moving average, just 2% below a 237.88 buy point in what IBD MarketSmith analysis plots as a bullish ascending base.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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