Stocks settled into mixed trade Monday, with the Nasdaq punching to another record high as the market heads into the final three sessions of June. Biotechs were spiky in early trade, after Intellia Therapeutics announced a CRISPR-technology advance. Chips received a boost from Nvidia/ARM acquisition news. Boeing lagged on a new delay for its upgraded 777 aircraft. Tech names were the early leaders on the Dow Jones today, with Salesforce.com and Intel leading the list.
The Dow Jones Industrial Average slumped more than 135 points, down 0.4%, as its fights to maintain the margin gained on Friday above its 50-day moving average. The S&P 500 traded effectively flat, clinging to Friday’s record high as the market prepared to close out the second quarter.
The Nasdaq Composite rallied 0.7%, taking out yet another new high on boosts from biotechs, and from some broad early gains among chip stocks on the stock market today.
China’s NetEase (NTES) bolted to the top of the Nasdaq 100, up 3.7% as it moves to retake support at its 50-day line. IBD Leaderboard stock Nvidia (NVDA) was next in line, climbing 3.6% after news reports said ARM customers Broadcom (AVGO) and Marvell Technology (MRVL) both approved of Nvidia’s proposed $40 billion takeover of the company.
Enphase Energy (ENPH) and NRG Energy (NRG) ran atop the S&P 500. Enphase jumped 3.8% after Citi launched coverage with a buy rating. NRG traded up 3.3% after Goldman Sachs on Sunday added the Texas-based power utility to its conviction buy list. The note placed NRG’s price target at 57 — 50% above Friday’s closing price.
Among the early highfliers, Israel-based Perion Networks (PERI) soared almost 15% after reporting above-forecast second-quarter results. Perion posted a 15.6% gain last week, climbing the right side of a four-month base pattern.
Intellia Leads Rallying Biotechs Stocks
Gene-editing companies were the hot stocks to watch in premarket trade Monday. Intellia Therapeutics (NTLA) reported positive interim data from a phase 1 study on its Crispr/CA9-based treatment for transthyretin amyloidosis — a protein-based disorder that often leads to heart failure. Intellia shares soared 47% as a half-dozen analysts hustled to increase their price targets on the stock. Beam Therapeutics (BEAM) rocketed 17%. Editas Medicine (EDIT) vaulted 9%. CRISPR Therapeutics (CRSP) jumped 6.7%.
Dow Jones Today: Salesforce Leads On Redburn Coverage
Salesforce.com (CRM) headed the Dow Jones today with a 1.9% advance. Shares rose as brokerage Redburn Partners initiated coverage of the developer of cloud-based software. Redburn launched with a buy rating and a price target at 320, about 33% above where shares closed on Friday. The note cited the company’s predictable sales and earnings growth, and solid cash generation, and said it was likely to remain dominant in the customer experience management market.
Salesforce has battled 20% higher, off a March low. In the process, it has gradually regained support at various technical levels in a sloppy, nine-month consolidation. Aggressive investors might sight in on 243.60 as an early entry.
Growth Stocks: Figs, Nvidia, ASML Holding
Health care apparel new issue Figs (FIGS) jumped to lead the IBD 50 list. Shares rallied almost 7% in opening action. The stock clocked a 19% gain last week, ending just off its highs. It is up more than 25% from a June 17 breakout, and more than 100% past its May 27 initial offering price.
Chip stocks dominated the IBD leaderboard line up in early trade. Nvidia rose 3.4%, topped the list, after the ARM news published in the U.S. press. Broadcom and Marvell Technology added 1.7% apiece. The Nvidia/ARM deal requires regulatory approval in the U.K. as well as China. Nvidia shares are extended, sitting on a six-week rally, up 17.2% so far in June and with a gain of more than 45% since Dec. 31.
Chip equipment maker ASML Holdings rose 2.2% on both the IBD 50 and Leaderboard lists. The stock is at the top of a buy range after rebounding from support at its 10-week moving average, and is just rebounding off its 21-day exponential moving average. The Netherlands-based stock has a year-to-date gain of almost 41%.
10-Year Bond Yield Eases
Bond yields are likely to remain in focus this week, after a rebound of nearly 6% last week ended a five-week slide. The 10-year Treasury yield eased on Monday to 1.49%, after settling on Friday just below 1.54%.
Last week’s advance narrowed the yield’s decline in June to around 2.9% — a deceleration in a three-month slide. The 10-year yield had hit a 13-month high above 1.76% on March 30.
A busy week on the economic calendar gets a quiet start Monday. New York Federal Reserve Bank President John Williams, Philadelphia Fed President Patrick Harker and Federal Reserve Governor Randal Quarles are all scheduled to give speeches during trading hours.
Bitcoin Steady Above $34,000
Bitcoin regained more than 3%, to trade above $34,400, according to CoinDesk. The cryptocurrency cut below $29,000 a week ago on Tuesday for the first time since last year.
Bitcoin touched a record high above $64,800 on April 14. It has narrowed its loss for June to 6%, and has a year-to-date gain of just over 18%.
Dow Jones Today: Boeing 777 Update Delayed
Boeing (BA) dragged on the Dow, down 2.8%, after Federal Aviation Administration concerns over its 777 long-haul airliner appear likely to delay introduction of the updated version of the jet until late 2023. The news is a setback for the company’s attempt to recover from the grounding of its 737 Max aircraft after two fatal accidents that killed 346 persons in 2018-19.
The stock is climbing the right side of what IBD MarketSmith analysis charts as a 15-week consolidation.
Stocks To Watch: Granite, MLM, Vulcan, Wabtec
IBD’s Weekly Investing Action Plan points out stocks to watch this week include number of infrastructure-related plays. Expectations appeared to have improved regarding the bipartisan infrastructure deal that played a key role in boosting market optimism on Friday. A carefully worded statement from President Joe Biden on Saturday appeared to ease concerns raised by comments from the President that he would veto the deal without passage of another, even-larger spending package sought by progressive Democrats. Democratic congressional leaders apparently still plan to push through a larger spending package under a reconciliation resolution. Any sense of progress or breakdown in movement toward an agreement is likely to influence market action.
Among the stocks linked to that spending, Granite Construction (GVA), which briefly cleared a flat base buy point at 42.52 on Friday.
Martin Marietta Materials (MLM) offered an early entry by breaking a short downtrend in a five-day rally last week. The stock finished Friday 7% below an official buy point of 383.81.
Vulcan Materials (VMC) is still well below a proper buy point at 194.27. It could signal an early entry if it retakes its 50-day line, while.
Nasdaq, S&P 500, Dow Jones Today
Heading to the end of June and of the second quarter, the Nasdaq Composite has a 4.5% gain for the month and is ticking of new highs. The index has squarely beat a nasty round of resistance at the 14,000 level.
The S&P 500 has a 1.8% advance in what looks likely to be its fifth straight monthly advance. The S&P 500’s rebound last week from support at its 50-day moving average to a series of new highs showed the index vital signs were in strong standing.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The question now is whether the Dow industrials can pull off a gain for the month. The Dow reversed sharply last week after notching a low in a two-week pullback. The rebound narrowed the Dow’s loss for the month to 0.3%, leaving it still on track for its first decline in five months.
But the Dow’s advance, on Thursday, back above its short-term 21-day moving average, and Friday’s decisive punch back above support at its 50-day line, put the index chart in its most bullish stance May.
For the Dow Jones today, and for this week, holding that 5o-day line will be a top priority. If the Dow can manage to shift June out of the loss category and into a gain, that would be icing on the cake.
This news-driven, pandemic recovery market can change rapidly, and last week was one of solid improvement. That provides no guarantees on how things might look as the market heads into the July 4 weekend. But it does hint that the market positioning for a positive start to the second half of the year.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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