Stocks climbed out of the starting gate Monday, despite a Tesla (TSLA) downgrade and weak reading on New York manufacturing.
The Dow Jones industrial average quickly moved up 0.3%, led by Cisco Systems (CSCO). The S&P 500 traded up 0.2% and the Nasdaq climbed 2% to take out a new high, buoyed partly by a rally among cybersecurity stocks.
WannaCry Triggers Cybersecurity Rally
Cisco Systems topped the Dow industrials, jumping 1.8% after a Morgan Stanley upgrade to overweight, from equal weight. the move left shares just below a 34.61 buy point in a flat base. Cisco plans to report its fiscal third-quarter results after the market closes Wednesday.
Tesla dipped more than 3% in opening action, as Morgan Stanley downgraded the stock to equal weight, from overweight. The downgrade cited revised operating costs, saying the company would continue to post losses on a GAAP basis through late 2019. The note also reportedly warned that deliveries of Tesla’s Model 3, which it forecasts will become the company’s leading revenue driver, could be much lower than anticipated through 2018. Valuation was also at issue, as the stock has climbed past the Morgan Stanley price target of 305. Shares fell to 314.22 Monday, narrowly above a 313.83 buy point of a cup-with-handle base.
Symantec (SYMC) popped 5% at the open, one in a rally in cybersecurity stocks apparently tripped by fears of a resurgence in the cyberattacks dubbed “WannaCry” that swept global markets Friday. Palo Alto Networks (PANW) opened 3% higher. Fortinet (FTNT) surged 4%.
Germany-based Trivago (TRVG) spiked 9%. The hotel and travel search engine reported a 100% gain in first quarter earnings, meeting analyst targets, and a better-than-expected 68% rise in revenue. The stock is trading up 36% from a cup-base breakout in April, and 77% above its December IPO price.
Among IBD 50 stocks, Momo (MOMO) climbed almost 2% at the open. The stock is in buy range above a 39.35 buy point in a three-weeks-tight pattern. The China based social networking site is scheduled to release first-quarter results May 23.
Oil Surges; Empire State Survey Slumps, Housing Market Index On Deck
The New York Federal Reserve’s Empire State Manufacturing Survey dived to a reading of -1.0% for May, down sharply from April’s 5.2 tally and disappointing consensus estimates for an increase to 8.0. The gauge of New York regional manufacturing activity reported a 4.4% drop in new orders, a 16-point drop in unfilled orders and a 9-point decrease in delivery times. Employment indexes were stable, although the total number of employees was slightly lower than in April.
The May Housing Market Index from the National Association of Home Builders is due for a 10 a.m. release.
The price of West Texas Intermediate oil bolted nearly 4% higher, to above $49 per barrel, after Saudi Arabia and Russia were among the countries agreeing to extended the limits on production established in October through the first quarter of 2018.
Gold rose 0.6% to above $1,235 an ounce. The dollar was mixed, down vs. the euro and up against the yen. Bonds eased, lifting the 10-year yield 1 basis point to 2.33%.
Europe’s markets remained narrowly mixed in afternoon trade, with the FTSE 100 in London up 0.2% and Frankfurt’s DAX down 0.2% and Paris’ CAC-40 trading 0.1% lower.
This post was originally published on *this site*