Banking

Dow Jones Pauses After Strong Rally, Nasdaq Loses Gains; Twitter Stock, Snap Move Ahead Of Earnings

The Dow Jones Industrial Average took a pause today’s stock market after a few days of strong rallying. The S&P 500 is trading mildly lower around noon time Eastern time, while techs are trying to hold on to this week’s nice gains.




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After two days of powerful rallying, Thursday’s trading action was stifled by an unanticipated rise in unemployment. Ahead of the market open, the Labor Department reported a surprise increase in initial jobless claims. New filings for unemployment totaled 419,000 last week, sharply above the 350,000 consensus estimate.

Meanwhile, the 10-year U.S. Treasury bond yield, which continues to be an important data point amid the economic recovery, hit a low of 1.13% earlier this week. After a rebound on Wednesday, the yield slid back to 1.23% on Thursday as money dripped back into bonds. The bond market continues to fluctuate between its recent March high of 1.76% and lows around 1.13%. Both inflation and Covid worries are key movers for the bond market.

Dow Jones Today

The Nasdaq traded near break-even after being up as much as 0.4%. Meanwhile, the S&P 500 climbed less than 0.1% after paring an earlier loss. The Dow Jones industrials held a small loss of 0.1%. The small-cap Russell 2000 index traded more than 1.8% lower, leading the downside. Volume was lower on both the NYSE and Nasdaq vs. the same time on Wednesday.

Stocks underperforming in the Dow Jones on Thursday included Intel (INTC) as shares fell 0.7% ahead of this afternoon’s earnings. Shares report after the close. Analysts expect the chip giant to earn $1.07 a share on sales of $17.8 billion. The stock is trying to regain its key 50-day line, but is still nearly 20% from its 52-week high.

On the upside, shares of McDonald’s (MCD) rose 0.7% and are trading just below the new 238.28 buy point in a flat base, according to IBD MarketSmith chart analysis. The stock reclaimed its key 50-day moving average during Tuesday’s rebound. The firm will report earnings on July 28.

Growth Stocks To Watch

The Innovator IBD 50 ETF (FFTY) declined roughly 0.2% on Thursday. Shares have regained support at their 200-day moving average and are attempting to retake the 50-day line as well. The ETF has had a powerful week, rising over 5% thus far. Stocks leading the downside in the index on Thursday included Cleveland-Cliffs (CLF) (down 6% on Thursday) and Ultra Clean Holdings (UCTT) (down 3% on Thursday).

Social media stocks Snap (SNAP) and Twitter (TWTR) are set to report their quarterly results after the close Thursday.

Analysts expect Snap to lose 18 cents per share on revenue of $845 million. Shares are building cup-with-handle base with a 70.34 buy point. Shares traded down 2.3% Thursday morning and are trying to gain support at the 50-day moving average.

Analysts expect Twitter to earn 7 cents a share on sales of $1.06 billion.

The stock is building a double-bottom base with a handle that offers a 72.17 entry. Twitter shares lost 0.5% early Thursday.

Finally, chip giant Advanced Micro Devices (AMD) is building a cup-with-handle base that offers a 95.54 buy point, according to IBD MarketSmith chart analysis. Shares reversed early losses on Thursday to a 1.2% gain and are on pace to notch a four-day win streak.

AMD stock was featured in this week’s Stocks Near A Buy Zone column.

On Friday, IBD downgraded its market outlook to “uptrend under pressure.” This means that investors should be more conservative when initiating stock positions. Also, consider taking profits where possible and be extra picky about taking on more risk at this time.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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