The Nasdaq gapped up at the open and shot up nearly 3% on Thursday as Wall Street applauded superb results from Nvidia, the leader among Magnificent Seven megacap tech stocks. The composite held solid gains on the stock market today, overcoming resistance at 16,000 with a gain of more than 460 points and closing at 16,041.62.
The Nasdaq's stout gain notched the highest close since Nov. 19, 2021, when the premier index for growth stocks finished at 16,057.44.
Nvidia, with 2.47 billion shares outstanding, added more than $273 billion in wealth to its shareholders on Thursday, a U.S. stock market record, according to Dow Jones Market Data.
That bested Meta Platforms' $204.5 billion gain on Feb. 2.
Indeed, Nvidia led a strong advance for semiconductor firms.
VanEck Semiconductor soared more than 6% on Thursday in heavy turnover.
Like Nvidia, SMH also racked a new all-time high. The exchange traded fund is up 20% for the year; IBD's fabless semiconductor industry group, jamming 6% higher as well, has risen 17.6% since Jan. 1.
Nvidia holds a three-quarter-size position within the IBD Leaderboard model stock portfolio. The megacap tech joined Leaderboard on Feb. 23, 2023, with an initial entry price of 236.11.
Stock Market Today
The S&P 500 also rallied bullishly. The large-cap benchmark jumped 2.1% to finish at 5,087.03 and was ahead of a 1.2% rise by the Dow Jones Industrial Average.
The Invesco S&P 500 Equal Weight ETF rose 1%, underscoring the solid breadth of Thursday's advance. RSP, which gained 11.7% in 2023, has logged a mild 2.4% ascent so far this year.
For now, IBD's current outlook stays at confirmed uptrend. The recommended stock market exposure remains at 60%-80%; please see this Investor's Corner for more detail.
Oil Rises Again
Commodities, in turn, traded mixed.
Oil futures rose 1.3% as light sweet crude hit nearly $79 a barrel at one point before backtracking. Natural gas futures slipped 2.6% to $1.72 per million BTUs after a huge gain of more than 11% over the prior two sessions. In evening trading on Thursday, gas fell another 3 cents.
In other financial arenas, gold traded flat at $2,034 an ounce amid a plunge by precious metals miner Newmont.
In the company's fourth-quarter results adjusted earnings of 50 cents rose 14% vs. a year ago on a 24% sales increase. But Newmont also disappointed investors by cutting its quarterly dividend to 25 cents a share from 40 cents.
Newmont, down 7.6% in more than double its usual turnover on Thursday and trading below 31, has plummeted 25% since Jan. 1.
Trading Volume Shows Bullish Increase
In the stock market today, volume ran sharply higher vs. the same time Wednesday on both main exchanges. On the Nasdaq, turnover jumped 16%, according to final data from Dow Jones. Volume on the New York Stock Exchange rose nearly 7%, according to MarketSmith.
This positive price-and-volume interaction serves as a strong hint that institutional investors are deploying more capital into equities.
Elsewhere, the U.S. Treasury 10-year bond yield closed the day flat at 4.32% after hitting a session high of 4.35%. The dull action in long-dated government bonds followed Wednesday's minutes from the Jan. 31 Federal Reserve meeting on interest rates.
The minutes affirmed that the central bank does not want to rush a move to lower interest rates amid inflation that lingers above the 2% long-term target level.
The Russell 2000 lagged, up nearly 1% to finish at 2,013, but the small-cap gauge built on early-session gains. The Dow Jones transportation average padded early gains and climbed 1.2%, indicating that buying demand in nontech areas of the stock market remains healthy.
Among exchange traded funds, the growth-oriented Innovator IBD 50 ETF surged 4.5% by the close.
Like The Sun, Japan's Stock Market Also Rises To New High
While the S&P 500 marked new highs, so did Japan's benchmark index, the Nikkei 225, in overnight trading. The Nikkei eclipsed its old record of 38,915 set in December 1989, by rising 2.2% on Thursday to close at 39,098.68.
A weak Japanese yen, currently trading above 150.50 vs. the U.S. dollar, has certainly helped its key exporters.
Toyota Motor gapped up on Thursday and gained 3.2% in heavy volume to 234.45, good for a new all-time high. The hybrid vehicle giant's ADRs on the stock market today saw 461,000 shares exchange hands, 42% higher than usual levels.
Toyota shares also vaulted more than 20% past a breakout point of 193.43 in a cup with handle. Given these gains, one could lock in some profits based on a key IBD sell rule.
Honda Motor rolled as much as 3% higher in heavy turnover. The large cap is in a buy zone after it surpassed a 35.18 proper entry in a near five-month cup with handle. The global automaker possesses a decent 82 Relative Strength Rating.
From 35.18, the 5% buy zone stretches to 36.94. Therefore, Honda shares remain in buy range.
Honda Earnings On Right Path
Two weeks ago, the car and motorbike titan posted flat earnings for the December-ended fiscal third quarter at 37 cents a share. Sales grew 13% to $38.2 billion, the company's third straight quarter of mild double-digit top-line increases.
For the fiscal year ending in March, analysts see Honda's earnings rocketing 311% to $4.13 a share after they plunged 72% to $1 a share in fiscal 2023. In fiscal 2025, Honda's profit is seen growing just 3% to $4.24 per share. Yet the prospective earnings growth would reverse a five-year annualized per-share earnings decline of 13%, based on MarketSmith data.
Back in the U.S., Rivian Automotive and fellow electric-vehicle upstart Lucid tanked after both companies announced plans against ramping up production amid easing demand for EVs. Rivian, cratering more than 25% on Thursday, said it will cut 10% of its salaried workers.
Rivian posted a net loss of $1.36 a share, a penny more than Wall Street's view, even though sales doubled to $1.31 billion. The pickup and van maker has now dropped 30% for the week to mark a new all-time low of 11.06. Rivian stock debuted on the Nasdaq in November 2021 at $78 a share.
Lucid shares are down nearly 17% for the week and trade just above 3, down more than 95% from an all-time peak of 64.86.
Megacap Stock Market Winner Jumps To New Highs
Leading the stock market today, Nvidia roared to an all-time high, catapulting more than 16% to a record close of 785.38. Shares have risen 58% since Jan. 1.
The leader in artificial intelligence chips said late Wednesday that fiscal fourth-quarter earnings came in at $5.16 a share on sales of $22.1 billion for the quarter ended Jan. 29. Wall Street expected earnings of $4.59 a share on sales of $20.4 billion.
Meanwhile, sandals giant Birkenstock — a recent initial public offering — moved swiftly past a 52.12 correct buy point before pulling back below it. The stock closed 1.3% lower. The NYSE-listed new issue is trying to clear a second base since its October IPO at $46 a share.
Birkenstock shares at one point rose almost 6% in volume running triple average levels on the stock market today before retreating more than 1%.
Volume had been heavy early. Then the pace slowed to 39% above the stock's average over the past 50 sessions.
Chart Analysis In New IPO
The stock still held a solid weekly gain of 4%. The proper buy zone from the breakout point runs from 52.12 — the left-side high of a nearly 10-week consolidation pattern — up to 54.73.
One flaw of the cuplike pattern? Observe the wild price action on a weekly basis. Excellent breakouts tend to follow a period of tight price action, not wide-and-loose trading.
In general, you want to see price ranges from week to week of, say, 5% or less as a stock builds a new base. When the swings from low to high exceed 10%, such chart action indicates a supreme divisiveness of opinion on the stock between the bears and the bulls.
To calculate a weekly price swing, take the difference between weekly high and low, divide that by the low price, then multiply by 100.
Solid Relative Strength
Birkenstock shows a fine Relative Strength Rating of 88 on a scale of 1 to 99. After the market close, BIRK's RS Rating dipped to 87, which is still solid.
The RS Rating normally tracks 12-month price action. Typically, new issues carry low relative strength scores, so Birkenstock's high rating is unusual. In general, focus on growth stocks that score 80 or higher.
Birkenstock says on its website it will announce fiscal first-quarter 2024 earnings on Feb. 29. Analysts see earnings surging 138% to $1.01 a share for the fiscal year that ends in September and rising an additional 70% to $1.72 in fiscal 2025. Birkenstock's sales have grown 43%, 13%, 16%, 16%, 30% and 26% vs. year-ago levels during the past six quarters.
Birkenstock's recent strength highlights more demand for new growth names in the stock market.
Stock Market Today: Outside The Nasdaq
Elsewhere, tech play Synopsys, which provides design verification software for the chip industry, blasted through a cup-with-handle base and its 554.57 entry. Synopsys advanced 6.9% in more than double its average volume. However, SNPS finished practically at the day's intraday low. At one point the stock reached as high as 629.38 before cooling off. The stock stumbled after an initial breakout attempt on Feb. 5-6.
At this point, watch to see if Synopsys can turn prior price resistance near 560-570 into a floor of buying support.
The 5% buy zone from the 554.57 entry goes up to 582.30.
The IBD Long-Term Leaders member reported 36% growth in first-quarter earnings to $3.56 a share. Revenue rose 21% to $1.65 billion.
Wall Street expects the Sunnyvale, Calif., company to grow earnings in fiscal 2024 (ending in October) 24% to $13.86 a share and another 20% in FY 2025 to $16.59.
Mutual funds owning a piece of SNPS keeps growing, from 2,896 funds at the end of the first quarter of 2023 to 3,315 at the end of that year.
What's also notable about the stock market action on Thursday? Breakouts across other industries beyond technology took place.
Quanta Powers A New Entry
Houston-based Quanta Services, which specializes in construction and maintenance in the electric utility and oil pipeline markets, powered past a 219.17 entry in a nine-week cup without handle and zoomed 10% higher in active trading, 132% above the stock's 50-day average.
Quanta issued solid fourth-quarter results. Earnings jumped 21% to $2.04 a share on a 31% acceleration in revenue to $5.78 billion.
Sales growth has accelerated from a 12% pickup in the first quarter of 2023 to increases of 19%, 26% and 31%.
Another stock to watch is Nordson. The industrial firm, specializing in sealants and coatings, rallied 4.5% in another solid breakout. Nordson dashed out of a base-on-base pattern that shows a 265.99 entry. Finishing the day at 273.46, Nordson still remains in the 5% buy zone.
The Big Picture: The Investing Lesson On Selling From Palo Alto Networks
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
Assistant Markets Editor Russ Britt contributed to this story.
