Stocks climbed at the starting bell Wednesday, boosted by a cool reading on July inflation data. Steel and other infrastructure-related stocks continued rising following Tuesday's Senate compromise. Airline stocks reversed out of premarket losses that followed a Covid/delta virus warning from Southwest. Chips stocks shook off early weakness, with Advanced Micro Devices leading a group rallying alongside infrastructure names. Meanwhile, Home Depot, Walmart and Caterpillar topped the Dow Jones today.
The Dow industrials briefly jumped more than 200 points, up 0.5%, to post a fresh record high. The S&P 500 pared to a 0.2% gain after touching a record of its own. The Nasdaq Composite defended a 0.1% gain, as Moderna and Micron Technology swung the bottom of the Nasdaq 100 and Netflix, Facebook and Tesla dipped to early losses.
NortonLifeLock gained 7.8% to lead the S&P 500. The consumer data security leader announced Tuesday night it would pay $8 billion to acquire Avast, a Czech Republic-based cybersecurity brand.
Also high on the S&P 500, steelmaker Nucor sparked 4% higher. The stock was extended at Tuesday's close, after a robust breakout from a nine-week cup base. A Senate vote passing a $1.2 trillion infrastructure spending program on Tuesday stirred rallies in materials and construction stocks.
Other infrastructure-related names in motion included Linde, Jacob's Engineering and Vulcan Materials.
Drugmaker Perrigo dived almost 12%, to the bottom of the S&P 500 after reporting an earnings miss and weak guidance. S&P 500 stock Southwest Airlines pared its premarket loss to less than 0.1%, as airline stocks opened to early gains. The budget air carrier warned that cancellations and weak bookings driven by Covid/delta virus concerns make third-quarter profit unlikely.
Splunk topped the Nasdaq 100, perking up 4.6% after UBS upgraded the data analytics toolmaker to buy, from neutral.
Vaccine makers were under sharply early pressure, as IBD 50 stock Moderna dropped 5.6%, to the bottom of the Nasdaq 100. Vaccine peer BioNTech, an IBD Leaderboard listing, dived 7.4%.
Chip stocks turned mixed, after early weakness from an industry pricing outlook on Tuesday pressured makers of dynamic random access memory chips, or DRAM. Applied Materials and Marvell Technology reversed early losses into gains. Advanced Micro Devices was a leader, climbing 1.3%. The VanEck Vectors Semiconductor ETF shook its early losses and climbed 0.5%.
Dow Jones Today: Walmart, CAT, Home Depot
Walmart, Home Depot and Caterpillar topped the Dow Jones today.
Walmart rallied 1.5% in early action, following up a powerful 2.1% advance on Tuesday. On a weekly chart, Walmart stock is aiming to extend its rally to an eighth week, after topping a 144.68 entry in a 10-week flat base within a larger consolidation. Shares remain in a buy range through 151.91.
Caterpillar gained 1.1%, heading for a fifth straight advance. Shares are challenging resistance at the stock's 50-day/10-week moving average. Caterpillar stock dropped into a 19% deep consolidation in early June. CAT stock rallied 2.5% on Tuesday, as investors responded to Tuesday's Senate approval of an infrastructure spending package.
Inflation Data In Check, Federal Reserve Speeches
The Labor Department reported its consumer price index rose 0.5% in July, slower than June's 0.9% jump and in line with the Econoday consensus forecast. Year over year, the index gained 5.4%, below views for a 5.5% gain and equal to June's 5.4% increase. Core prices rose 0.3%, below views for a 0.4% increase.
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With markets keeping an ear on any inflections in Federal Reserve thinking, speeches from Atlanta Federal Reserve Bank President Raphael Bostic at 10:30 a.m. ET, and from Kansas City Federal Reserve Bank President Esther George at 12 p.m. ET, could have some bearing on the day's trade.
Earnings News: Upstart, Maravai Rally
In earnings news, Open Lending surged 15%, CuriosityStream vaulted 13%, FuboTV rallied 12% and McAfee gained 4% after reporting late Tuesday. Wendy's gained 3% on results released early Wednesday.
IBD 50 listing Upstart Holdings rocketed more than 20% higher, as analysts upgraded and raised price targets after second-quarter sales and earnings beat expectations by wide margins, and management raised its Q3 guidance. The spike moved shares well up the right side of a very deep base pattern.
IBD 50 listing Maravai Lifesciences jetted ahead 6.5% after its late-Tuesday report. The stock is extended after a big breakout from a six-week cup base last week.
Vital Signs: Oil, Bond Yields, Bitcoin
Crude oil prices dropped, with West Texas Intermediate down 1.3%, but holding above $67 a barrel. WTI prices rebounded 2.7% intraday on Tuesday, settling 11.2% below their July 6 high. Oil prices are up 40.1% since the start of the year.
The 10-year Treasury yield reversed early gains and dropped back to 1.34% early Wednesday, roughly where it settled on Tuesday. A six-day advance through Tuesday marked the longest rally in yields since January, after a rebound last week snapped a string of 10 losses in 11 recent weeks.
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Bitcoin traded around $46,200, after swinging as high as $46,583 and as low as $44,670 over the past 24 hours, according to Coindesk. Bitcoin touched a high above $64,829 in mid-April.
China's Rebound Slows, Europe Rises
China's markets added a third day to their rebound, although momentum slowed markedly. Hong Kong's Hang Seng Index added 0.2% and the Shanghai Composite advanced less than 0.1%. In Japan, Tokyo's Nikkei 225 jumped 0.7% as the U.S. dollar gained strength.
Largest U.S. Pot Stock Reports Mixed Earnings; Key Rivals On Tap
Among China gauges in the U.S. early Wednesday, the iShares MSCI China ETF (MCHI) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) were unchanged in early trade. Both funds rose 0.9% on Tuesday. Technology tracker KraneShares CSI China Internet ETF (KWEB) traded 0.8% higher in early trade, following a 0.7% increase on Tuesday.
Europe's markets gained strength following the U.S. inflation data. In afternoon trade, the CAC-40 in Paris rallied 0.6%. Frankfurt's DAX also moved up 0.6%. London's FTSE 100 climbed 0.7%. The SPDR Portfolio Europe ETF (SPEU) was unchanged in early trade, after a fractional gain on Tuesday. The ETF is up 0.9% in August, has a year-to-date gain of 14.4%, and is trading just below a 44.06 buy point in an eight-week flat base.
5 Stocks To Watch: Celsius, Wesco, Apple, Snap, Square
IBD 50 stock Celsius Holdings (CELH) reports second-quarter numbers before the market opens on Thursday. The fitness drink maker edged into a buy range above a 76.90 entry in a double-bottom base. The chart shows a third-stage pattern, which means its gain from a new breakout may be smaller than in prior breakouts. Celsius was Tuesday's IBD 50 Stock To Watch.
Wesco International (WCC) last Friday topped the 113.20 buy point of a flat base after the diversified manufacturer, spun out from Westinghouse Electric in 1994, beat profit estimates late Thursday. It remains narrowly above the buy point, in a buy range and a stock to watch.
Apple (AAPL) is also in a buy zone on the Dow Jones today, after clearing a 145.19 buy point in July. Monday's IBD Stock of the Day, it remains in the buy zone through 152.45.
Snapchat owner Snap (SNAP) slipped 0.4% early Wednesday. The stock is trading low in the 5% buy zone past a 73.69 buy point in a consolidation. The 5% buy area tops out at 77.37.
Point-of-sale software leader Square rose 0.5% early Wednesday. The IBD Leaderboard stock is in a buy range above an alternate handle buy point at 267.87. The buy range extends to 281.26.
Find Alan R. Elliott on Twitter @IBD_Aelliott
