The stock market today transitioned into seesaw action during the first 2-1/2 hours of trading, as the Nasdaq composite, up nearly 0.7%, led the upside. But other large-cap indexes cooled amid mildly negative market breadth. Nvidia staged a follow-on buy point. Chip shares led the upside; enterprise software firms traded mixed.
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Bond prices continued to weaken, sending up yields and creating a near-term headwind for stocks.
The Dow Jones Industrial Average bore the brunt of the morning selling, down as much as 0.6% to 38,221. The Dow Jones trimmed that loss at midday to 0.3%.
At least eight of the 30 components slumped 2 points or more, including struggling health-care play UnitedHealth (UNH), part of the IBD Long-Term Leaders, and Wall Street giant Goldman Sachs (GS). On Friday, JPMorgan Chase (JPM), BlackRock (BLK) and Wells Fargo (WFC) are among the financial institutions that report first-quarter results.
On Thinkorswim, losers continued to top winners. On the NYSE, falling stocks exceeded risers by a 9-5 margin. Nasdaq decliners led gainers by fewer than 300 stocks.
A New Buy Point For Nvidia
Nvidia (NVDA), a mainstay on the Leaderboard portfolio for more than a year, tested the 10-week moving average near 841 and is trying to erase losses for the week. Shares in the AI processor powerhouse gained as much as 14 points to an early-session high of 884.96. Right before lunchtime on Wall Street, Nvidia held those gains admirably.
The megacap tech and true leader in the stock market holds a sterling 99 Composite Rating on a scale of 1 to 99.
This Investor’s Corner highlights the benefit of buying powerful growth stocks on the first or second pullbacks to the 10-week line after a breakout.
In Nvidia’s case, the 5% buy zone from the new follow-on buy point goes from 841 up to 883. So the stock is slightly extended from that entry.
Stock Market Today
At around 11:55 a.m. ET, the S&P 500 edged 0.2% higher at 5,170. The Russell 2000, which undercut its 50-day moving average Wednesday in the wake of a disappointing report on March consumer prices, initially eased nearly 0.4% but turned higher by nearly 0.4%.
Volume was running lower on both the Nasdaq and NYSE stock exchanges vs. the same time on Wednesday.
Some building-related firms suffered sharp declines.
A Sell Signal Triggered By Fastenal
Fastenal (FAST) led the downside in the stock market. Shares gapped down at the open and briefly traded below 70, triggering a sell signal by collapsing below the 50-day moving average after a solid run-up.
Notice on a weekly chart how Fastenal has also pierced its 10-week moving average for the first time in months, a bearish change in character. A few weeks ago, Fastenal saw its mid-October gain from a breakout past a trendline entry near 57 hit nearly 39%.
The building products supply chain reported flat first-quarter earnings at 52 cents a share. Sales inched 2% higher to $1.90 billion. That matched the slowest year-over-year gain in at least eight quarters.
Also on Thursday, savvy investors are keeping a close eye on the cost of money. In recent days, the yield on the 10-year U.S. Treasury bond has lifted from 4.3% to as high as 4.58%. As bond prices fall, their return (or yield) goes up, making them more appealing vs. equities.
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More Tech Stocks To Watch
Going back to tech stocks, Marvell Technology (MRVL) is reportedly planning an event to discuss its AI initiatives. The stock rallied nearly 0.9% early and is trying to form a new base. It reversed lower at midday, however.
Alphabet (GOOGL), the web search titan that is also working on its own chips for cloud computing and accelerated computing, continued to move past a fresh buy point of 153.78 in a nine-week base. The stock is in the buy zone up to 161.47. Google shares, up roughly 0.4%, are on track to rise four of the past five sessions.
Not all stocks in the semiconductor space joined Nvidia to the upside.
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Intel (INTC) has shown sour action since gapping down 8% on April 3. Since then, the chip manufacturing behemoth has sunk below the long-term 200-day moving average.
Leading Retailer In The Stock Market
Elsewhere in the stock market, Costco Wholesale (COST) attempted to retake its 50-day line as shares moved mildly higher and attempted a third straight gain. The company announced a quarterly dividend hike of 14 cents to $1.16 per share. A new base is forming.
After the close Wednesday, the membership-based discount retail chain posted a 6.4% jump year over year in net sales for the first 31 weeks of its fiscal year, to $146.6 billion.
On the downside, Regeneron Pharmaceuticals (REGN) dropped more than 2% to its lowest level since mid-January. A big slide below the 50-day moving average last week did not come in heavy volume. However, loss of support at the key technical level suggests further weakness ahead.
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The biotech giant is reportedly being investigated by the Department of Justice for potential pricing fraud related to its Eylea medicine to treat wet age-related macular degeneration.
Regeneron shares hold a mediocre 73 Relative Strength Rating. The RS line has been sloping lower since late February.
Please follow Chung on Twitter: @saitochung and @IBD_DChung
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Source: investors.com
