Stocks opened mixed, then quickly turned lower Thursday, as July producer price data suggested higher-than-expected inflation pressures, and despite a positive reading on weekly jobless claims. Selling among chip stocks continued, with Micron diving to extend its three-day slide. Earnings news sent Palantir, Organon and pot stock Green Thumb higher. Meanwhile, Apple grabbed the early lead on the Dow Jones today.
The Dow industrials dropped 0.3%, after briefly touching a new record high. The S&P 500 slipped 0.2%. The Nasdaq Composite drilled down 0.4%, with chip stocks and China-based names accounting for the 15 worst early losses on the Nasdaq 100.
Micron Technology dropped nearly 6%, to the bottom of the Nasdaq and S&P 500. The stock remains under pressure following an industry report Tuesday forecast weakening prices for memory devices. The iShares Semiconductor ETF fell 1.4%.
Drugmaker Organon topped the S&P 500, up 6.3% after reporting second-quarter results. Medical products maker Cooper Companies rallied 4%, retaking a 415.10 buy point, after reporting that certain of its contact lenses had been approved for use in China.
Dow Jones Today: Caterpillar, Boeing Lead
Apple set the early pace on the Dow Jones today with a 0.7% gain. Apple stock remains in a buy range through 152.45. Visa and Intel dragged at the bottom of the Dow industrials.
Caterpillar slipped 0.1%, threatening to end its five-day rally. CAT stock has rebounded briskly off its 40-week line, retaking support above its 10-week line on Wednesday. That could have marked an early entry for some aggressive investors. However, the stock remains low in a two-month consolidation, ending Wednesday 11% below the pattern's current operable buy point of 246.79.
A two-day rally sent Home Depot back above a cup-with-handle base buy point at 333.55. Shares remain in a buy range through 350.23. HD stock traded 0.45% lower early Thursday.
Unemployment Eases, Inflation Pressure Gains
First-time applications for unemployment assistance fell for a third straight week, to 375,000 in the week ended Aug. 7, according to the Labor Department. That was down from 385,000 in the prior week, running counter to expectations for an uptick to 387,000.
Prices received by producers rose more than expected in July, up 1% — above economists' estimates for a 0.6% gain. It was the second-straight month that prices topped expectations by a significant margin. Year over year, prices soared 7.8%, compared with projections for a 7.3% increase.
Earnings News: Sonos, CyberArk, Palantir
Among the biggest earnings-fed moves was Opendoor Technologies, which swung 11% higher. CyberArk Software climbed almost 5%. 3D printer manufacturer ExOne spiked almost 40% after reporting results, and announcing a $575 million deal to be acquired by Desktop Metal.
Home audio systems maker Sonos bolted more than 6% higher. The Santa Barbara, Calif.-based outfit reported a surprise profit for its fiscal third quarter. The gain signaled a possible early entry for aggressive investors, as the stock retakes support at its 10-week moving average.
Enterprise software developer Palantir Technologies rallied 10.5% after reporting earnings in line with expectations, and above-forecast revenue growth. The premarket gain suggests a jump back above the stock's converged 10-week and 40-week moving averages. That would provide a potential early entry for aggressive investors. Palantir is forming a base with a potential buy point at 27.60.
EBay and Baidu traded sharply lower after their reports. IBD 50 stock Celsius Holdings dived 6.3% following its second-quarter report.
Vital Signs: Oil, Bond Yields, Bitcoin
Crude oil prices held effectively flat early Thursday, with West Texas Intermediate unchanged and holding above $69 a barrel. WTI prices have posted two days of gains, after dipping to test recent lows on Monday. WTI is trading 10.1% below its July 6 high, and up 42.3% since the start of the year.
The 10-year Treasury yield added three basis points early Thursday, rising above 1.36% after settling on Wednesday just below 1.34%. A six-day advance through Tuesday marked the longest rally in yields since January. And a rebound last week snapped a string of 10 losses in 11 recent weeks.
Stock Market ETF Strategy And How To Invest In The Current Uptrend
Bitcoin traded down almost 5% to around $44,350, after swinging as high as $46,767 and as low as $44,125 over the past 24 hours, according to Coindesk. Bitcoin touched a high above $64,829 in mid-April.
5 Breakout-Ready Stocks To Watch
Century Communities closed on Wednesday less than 1% below a 72.60 buy point in a cup-with-handle base. The Colorado-based builder carries a 96 Composite Rating from IBD, ranking it the No. 1 stock in the residential homebuilders industry group. Shares slipped 0.9% Thursday morning.
Chipmaker On Semiconductor spiked 15.9% in the first week of August, breaking out past a 44.69 buy point in a 16-week cup base. The stock slipped just below that buy point on Thursday. The base's buy range that runs to 46.92.
Arch Capital Group is also in a buy zone, just above a 41.38 entry in a 15-week flat base. The buy zone tops out at 43.45.
Shipping giant Matson is working to add a third week to its rally. That has placed shares about 6% below a 79.15 buy point at Wednesday's closing bell.
Industrial chemicals supplier Element Solutions has formed a very flat base, one that clings bullishly to the chart's 10-week moving average. The buy point is at 24.80, less than 5% above where Element finished on Wednesday.
Nasdaq, S&P 500 And Dow Jones Today
The Dow shook off its three-month malaise after Tuesday's Senate infrastructure spending compromise. The industrials upshifted to lead the market with a 0.8% gain for the week through Wednesday. The S&P 500 has a 0.25% gain. The Nasdaq Composite slipped 0.5%.
A quick look through the Dow Jones today shows, among the big gainers over the past five sessions, Goldman Sachs rallied 9.5%. Caterpillar jumped 8.4%. One surprise, Walgreens Boots Alliance, jumped 6.8%, slightly outpacing JPMorgan's 6.6% advance.
Goldman is extended after an Aug. 6 breakout. JPMorgan is less than 4% from a 167.54 buy point in a 10-week flat base.
Worth noting, small caps are working to add a fourth week to their rebound rally as they fight back from a two-month consolidation. The Russell 2000 appears to be meeting resistance at the underside of its 10-week moving average, holding its gain for the week through Wednesday to 0.1%.
But the S&P Smallcap 600 punched up through its 10-week line on Wednesday. That gave it a 0.8% gain so far this week. The index is up more than 8% from a late-July low vs. a 6.7% rebound for the Russell 2000. The S&P Smallcap 600 ended Wednesday 3.7% below its record high, from June 8.
The SPDR Portfolio S&P 600 Small Cap ETF also closed Wednesday back above its 10-week line of support. And 4% below a 45.51 buy point in what IBD MarketSmith analysis charts as a nine-week flat base.
Find Alan R. Elliott on Twitter @IBD_Aelliott
