The Dow Jones Industrial Average showed underlying strength again in the stock market today. The blue-chip index added around 0.6% despite a 2% decline for Boeing (BA). Shares lagged after the Machinists union overwhelmingly voted to reject an offer from Boeing that included a 25% pay increase over the next four years.
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Nasdaq S&P 500 Extend Win Streaks; Arista Networks, Royal Caribbean, Stride In Focus
Early leaders in the Dow Jones today included Intel (INTC), American Express (AXP) and Goldman Sachs (GS).
The Nasdaq composite and S&P 500 also edged higher by 0.3% to 0.4%. The Nasdaq closed slightly above its 50-day moving average Thursday in a low-volume advance. The S&P 500 reclaimed its 50-day line Wednesday with a bullish upside reversal in strong turnover. Both the S&P and Nasdaq are aiming for a fifth consecutive gain.
The Nasdaq also showed underlying strength in the stock market today despite a big drop for Adobe (ADBE). The stock swooned around 10% after the company reported a 14% increase in earnings, with revenue up 11% to just over $5.4 billion. But the company’s guidance for the November-ended quarter was a little light.
Adobe’s weakness was offset by another strong showing for Oracle (ORCL), which added 3%. The catalyst was bullish guidance and several analyst price-target hikes. Oracle gapped out of an eight-week base Tuesday after reporting strong earnings. It’s not buyable now after a big price gain in recent days. But if Oracle can hold gains from here and trade tightly near highs, an alternate entry could emerge.
Stock Market Today
Amid plenty of strength in the retail sector, RH (RH) soared nearly 20% after earnings and revenue topped expectations. The company, formerly known as Restoration Hardware, said it now expects full-year revenue growth of 5% to 7%, below a prior outlook for 8% to 10% growth. Investors seemed to focus on positive comments from TD Cowen, which reiterated a buy rating while raising RH’s price target to 350 from 325.
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RH has a tiny float of 13.1 million shares. About 1.95 million shares were held short heading into Friday, or 15% of the float. That’s a fairly healthy short position that suggests a lot of short covering is occurring today.
The retail sector continues to be a nice pocket of strength in the stock market today as names like Walmart (WMT) and Costco (COST) continue to outperform.
The Russell 2000 outperformed in the early going, up 1.4%. Advancing stocks beat decliners on the Nasdaq by around 3-to-1. Winners trounced losers on the NYSE by nearly 8-to-1.
In the semiconductor space, Arm Holdings (ARM) was up more than 3% after Raymond James initiated coverage with an outperform rating and 160 price target. Arm gapped above its 50-day line, but the stock will have more overhead supply to work through after a 49% pullback.
Besides Arm, several other tech stocks outperformed in the Nasdaq 100, including Micron Technology (MU), Lam Research (LRCX) and Applied Materials (AMAT). Gains ranged from 2% to 3%.
China-based e-commerce giant PDD (PDD) slumped more than 3% after the Biden administration moved to close a loophole that made shipping goods from China very cheap. PDD’s discount shopping site Temu has been gaining market share in the U.S.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight and Kimberley Koenig for more stock market news on X, @IBD_KKoenig.
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