Stocks got a mixed launch, then turned higher Friday following a solid read on April economic activity. IBD 50 stocks Snap and MarineMax rocketed higher. Chip stocks rebounded on merger and earnings news. Meanwhile, Intel and American Express hamstrung the Dow Jones today, both sharply lower following quarterly reports.
The S&P 500 popped 0.4%, the Dow wrestled out od early declines and into a 0.1% gain. The Dow carried a 1.1% loss, the S&P 500 a 1.2% decline, for the week through Thursday. Both indexes are tracking toward their first loss in five weeks.
The Nasdaq dropped 1.7% through Thursday, holding support at its 21-day line, but still below the resistant 14,000 mark and threatening to snap its three-week rebound.
Miners Freeport-McMoRan (FCX) and Southern Copper (SCCO) climbed as copper prices rose to a new, almost 10-year high. Steel maker and ore miner Cleveland Cliffs (CLF) also rallied, with the IBD 50 stock rising 2.5% in morning trade.
Small caps ran strong in premarket trade, with the Russell 2000 up 0l;7% and the Vanguard Russell 2000 Index Fund ETF (VTWO) trading 1.2% higher. Silicon Laboratories (SLAB), Vicor (VICR) ran high on the list.
Dow Jones Today: AmEx, Intel Drag
Intel earnings and sales came in above analyst expectations, but the company guided to second-quarter earnings just below analyst targets. In addition, during the earnings call with analysts, Chief Executive Pat Gelsinger warned that the current industry chip shortage was likely far from over. The industry is “challenged by a shortage of foundry capacity, substrates, and components. We expect it will take a couple of years for the ecosystem to make significant investments to address these shortages,” Gelsinger said.
Intel stock is broken down below its 10-week moving average, undercutting a cup-with-handle buy point at 63.64. It has not triggered the automatic sell rule, but its weak technical and fundamental traits leave a large number of better looking chip-related stocks, including Nvidia (NVDA) and Lam Research (LRCX), for investor watchlists.
American Express reported an easy first-quarter earnings beat, but revenue came up short, hurt by a drop in member spending and loan volumes. American Express stock has been fighting to hold support at its 21-day moving average, below a 151.56 buy point in six week cup base.
U.S. Economic Momentum Builds
Researcher Markit reported its preliminary Composite purchasing managers index rose to 62.2 for April — he highest since data collection began in October 2009. The number was up from 59.1 in March, and above economist forecasts for an uptick to 59.5. “A steep upturn in manufacturing production occurred despite unprecedented supply chain disruptions,” the report said. But the increase was “weighed
down by difficulties sourcing raw materials and ongoing supplier delivery delays, which were the most extensive on record.”
The Commerce Department delivers March new home sales numbers at 10 a.m. ET. BakerHughes releases its latest weekly rig count survey at 1 p.m. ET.
Earnings News: Skechers, Boston Beer, Autoliv
Snapchat owner Snap rallied 5.8%, topping the IBD 50 list in early trade. Earnings rose 112%, the company’s third straight quarter of triple-digit growth. Revenue leapt 66%, a third quarter of acceleration. Snap stock has a 65.96 cup-with-handle base buy point.
IBD 50 peer Boston Beer pared gains to 2%, as earnings accelerated to a 246% gain and revenue jumped 65%. Shares are in a buy range above a cup base buy point at 1,236.67. The buy range runs to 1,298.50.
Among companies reporting early Friday, super regional bank SVB Financial Group (SIVB) jumped 6.7% after delivering its first-quarter results.
Meridian Bancorp (EBSB) rocketed 17% higher on positive first-quarter results, and after announcing a merger with Independent Bank in a deal valued at $1.15 billion.
Skyworks To Buy Silicon Labs Unit
Skyworks Solutions led the Nasdaq and S&P 500, climbing 4.2% after agreeing to buy Silicon Labs’ Infrastructure & Automotive business for $2.75 billion cash. Silicon Labs spiked more than 8%, to trade high on the Russell 2000.
The deal deepens Skyworks’ exposure to autos, with an emphasis on electric vehicles. The company has largely been a wireless chip maker and a key supplier to Apple (AAPL).
Skyworks shares have been testing support at their 50-day moving average for the past three sessions. They closed Thursday 6% below a 194.59 buy point in what MarketSmith chart analysis plots as a nine-week cup-with-handle base.
Nasdaq, Chip ETFs Near Buy Points
As the Nasdaq outruns the Dow Jones today, the VanEck Vectors Semiconductor ETF (SMH) traded up 1.2%. The fund ended Thursday less than 6% below a 257.64 buy point in a 10-week cup-with-handle base.
Nasdaq tracking funds are generally trading below buy points. The Invesco QQQ Trust (QQQ) is holding above its 21-day exponential moving average, and below a 338.29 buy point in an eight-week cup base. The leveraged ProShares Ultra QQQ (QLD) was added to IBD’s SwingTrader service on Thursday, on a rebound from its 21-day line.
Dow Jones Today: Chart Updates
Microsoft (MSFT), Cisco Systems (CSCO), 3M (MMM), UnitedHealth Group (UNH) and Home Depot (HD) are extended from recent breakouts. Apple is forming a possible handle ahead of its second-quarter report next Wednesday.
Caterpillar (CAT) paused long enough to form a six-week flat base, and is also testing support at its 10-week moving average. A rebound would place the stock in a technical buy range. The base’s proper buy point is at 237.88. Earnings are a consideration, with Caterpillar due to report next Thursday.
Goldman Sachs (GS) is also tight up against its 10-week line, poised for a possible breakout. The stock has also shaped a six-week flat base with a 365.95 buy point.
Coca-Cola (KO) is technically breaking out, trading higher in early action on the Dow Jones today. It’s now in buy range, above a cup-with-handle buy point at 54.04. The stock’s weak fundamental and technical metrics keep it off the watchlists for most growth stock investors, but the positive action adds another bullish comment on the stock’s market’s confirmed uptrend.
Vital Signs: Bitcoin Dives, Copper Jumps
Bitcoin prices veered sharply lower, diving below $48,000 in early trade Friday, before recovering to above $49,500, according to CoinDesk. The cryptocurrency ran up to a new high above $64,800 on April 14, ahead of the Coinbase Global (COIN) IPO. Bitcoin remains up more than 70%, after starting the year just above $29,000.
Oil prices held steady, with West Texas Intermediate up 0.2% and holding above $61 a barrel.
Copper jumped 0.9% to above $4.31 a pound, its highest price since August 2011. Copper is now less than 4% off its record high at $4.48 a pound, set in July 2011.
Bond yields dipped, with the 10-year yield trading at 1.53%, after dropping to settle at 1.55% Thursday, according to CBOE data. The move leaves yields in a test of support at their 50-day moving average for the first time since September.
In late March, yields had climbed to almost 1.76% — the highest level since January 2020. Yields had started 2020 at around 1.8%, down from about 2.7% a year earlier, then dipped in August to record lows around 0.5%.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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