After suffering its worst day in months, the stock market bounced back Thursday, although gains thinned out in afternoon trading. Small caps and the IBD 50 outperformed.
The S&P 500 reduced its gain to 0.4%, while the Nasdaq composite was up 0.6%. The Russell 2000 rose 0.9% and tried to hold above the 2,000 level.
The Dow Jones Industrial Average was up 0.3%. Salesforce contributed to the Dow's gain with a 2% increase. Morgan Stanley upgraded the software maker to overweight from equal-weight and raised its price target to 350 from 290.
Volume fell on the New York Stock Exchange and Nasdaq compared with the same time on Wednesday. Advancers swamped decliners by a 9-to-5 ratio on the Nasdaq and by about 12-to-5 on the NYSE.
The Innovator IBD 50 exchange traded fund rebounded 1.1%, not enough to erase Wednesday's 2.5% tumble.
And the 10-year Treasury yield, which had fallen early, is up 2 basis points on the day to 3.88%.
Cruise Line Stocks Sail Away
Carnival led the IBD 50 with a 5.7% gain, nearing a breakout to new highs. The cruise line operator Thursday reported a narrower quarterly loss and cited strengthening demand.
Rivals Norwegian Cruise Line and Royal Caribbean Group were the next-best stock market performers in the IBD 50 this morning, both up roughly 4%. Royal Caribbean is up more than 150% this year, which makes 2023 its best year ever, according to Dow Jones Market Data.
Micron Technology jumped more than 7% in afternoon trading, canceling out Wednesday's 4.2% drop. The memory-chip maker beat sales and profit expectations for its November-ended quarter, and its outlook for the current period also surpassed expectations. Micron is at a 15-month high.
Tesla climbed 1.4% and continues to form a double-bottom base. Norway's traffic safety regulator is investigating suspension system failures in Teslas that may go back years. The probe could result in a recall, Reuters reported.
CarMax trimmed its gain to 4% after being up nearly 13%. The used-car retailer beat profit estimates, but November-quarter sales missed views and same-store sales fell. The company said it is resuming its stock buybacks. Shares are forming a cup base with an 87.50 buy point.
Stock Market Digests More Earnings, GDP
Cintas gapped up to a record high after the supplier of corporate uniforms beat November-quarter expectations and raised its profit forecast for the fiscal year ending in May.
Apogee Enterprises climbed 2.6% and remained above the 51.69 buy point of a cup base. The buy zone goes to 54.27. The maker of windows for commercial buildings beat profit views but sales lagged forecasts, based on FactSet estimates. Apogee also raised its fiscal year earnings forecast to $4.55 to $4.70 a share.
Paychex plunged 6.6% in heavy volume, just as the stock came within pennies of topping a 129.70 buy point out of a cup base. The provider of payroll and human resources services beat profit expectations but sales performance lagged views. Thursday's loss is the largest since March 2020, when it fell more than 8%.
In economic news, the Index of Leading Economic Indicators fell 0.5% in November. That was an improvement over the 1% drop in the previous month and met expectations.
The final revision of third-quarter GDP was cut to 4.9% from 5.2% in the previous estimate, which was also the forecast from economists. There was some good news in inflation, with the annualized personal consumption expenditures rate falling to 3.1% from 3.6%.
Jobless claims edged up by 2,000 to 205,000 in the most recent week. Economists had forecast 210,000 claims. The four-week moving average eased to 212,000.
Facts & Figures On Santa Claus Rally
Wall Street commonly refers to stock market gains around the holidays as the Santa Claus Rally. But the tendency of stocks to climb late in the year was discovered by the Stock Trader's Almanac, which more precisely identified the phenomenon as the last five trading days of the year and first two sessions of the new year.
Thus, Friday marks the first day of the official Santa Claus Rally period. Historically, the S&P 500 averages a gain of 1.3% and closes higher 78.1% of time, according to Dow Jones Market Data.
The S&P 500 has gained during the Santa Claus rally the past seven years. Another gain this year would tie for the longest win streak of eight years. Over the last 20 years, the S&P has gained 0.7% during this period.
The Nasdaq composite averages a gain of 1.8% and closes higher 76.9% of time since the composite's inception. But the Nasdaq has fallen the past two Santa Claus periods. Over the last 20 years, the index has gained nearly 0.7% during the period.
Since 1950, the Dow averages a gain of 1.4% and closes higher 79.5% of time during the holiday stock market rally. It's been on a seven-year win streak.
