Dow Jones Pares Early Gains As Jobless Claims Data Weighs On Stock Market – Investor's Business Daily

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Key market indexes moved off session highs midday, after gapping up at the open, as the Dow Jones Industrial Average sharply pared a 150-point gain.

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At around 1 p.m. ET, the S&P 500 rose 0.7%, the Nasdaq was up 0.5% and the Dow Jones industrials edged 0.3% higher in the stock market today. Small caps tracked by the Russell 2000 added 0.6%. Volume was mixed, higher on the NYSE but lower on the Nasdaq vs. the same time Wednesday.

Early Thursday, the Labor Department reported 840,000 initial jobless claims for the week ended Oct. 3, well above forecasts for 819,000. Claims for the prior week were revised upward to 849,000.

The Nasdaq holds a 27% year-to-date gain despite recent volatility, while the S&P 500 was up 6% through Wednesday’s close. The Dow is down 1% and the Russell 2000 is 5% underwater this year. Read The Big Picture for detailed market analysis.

The Dow Jones index, which wrapped up September with a 2.3% loss, has climbed back above its 50-day moving average. On Sept. 30, the IBD stock market outlook was upgraded to “confirmed uptrend” from “market in correction.”

Covid-19 Update

Worldwide coronavirus cases are approaching 36.5 million, with over 1.06 million deaths, according to Worldometer. In the U.S., confirmed cases are closing in on 7.8 million, with the death toll near 217,000.

As the race toward a coronavirus vaccine or treatment heads up, Regeneron Pharmaceuticals (REGN) held a gain near 2%, after gapping up 4% at the open. The biotech filed for Emergency Use Authorization with the U.S. Food and Drug Administration for its Covid-19 antibody cocktail, which was part of Trump’s treatment last week.

Regeneron stock is back above its 50-day moving average as it shapes the right side of a base, according to MarketSmith chart analysis. The buy point for now is 664.74, unless the stock forms a handle.

Gilead Sciences (GILD) climbed 0.4% after announcing a new deal to supply the European Union with remdesivir, used to treat seriously ill Covid-19 patients. Remdesivir was granted Emergency Use Authorization from the U.S. in May and the EU in July.

Gilead shares remain well below the 50-day line and are 26% off their 52-week high.

IBM Leads Dow Jones

Moving to the Dow Jones index, International Business Machines (IBM) gapped up and surged 5% in heavy trade. The tech services giant said it will spin off the managed infrastructure services unit of its global technology services division into a separate public company.

IBM shares are about 3% away from a 135.98 buy point of a cup with handle.

Among other blue chip winners, American Express (AXP), Goldman Sachs (GS) and Travelers (TRV) added about 2% each.

But Amgen (AMGN) gapped down and slumped 6% in heavy volume to test its 50-day line. The biotech and its partners announced Phase 3 trial results for GALACTIC-HF to treat patients with heart failure. Amgen is working on a flat base with a 265.07 buy point.

Airlines, homebuilders and generic drug makers led the upside among IBD’s 197 industry groups. But solar and restaurant stocks lagged.

Domino’s Fall; Alibaba Rises

Domino’s Pizza (DPZ) gapped down and sank 7% in heavy volume to undercut its 50-day line. The pizza chain reported mixed Q3 results as earnings missed views but sales topped forecasts. Shares are back below a 424.84 buy point of a flat base.

The Innovator IBD 50 ETF (FFTY) edged 0.4% higher, thanks to 1.5% or better gains from chip designer Inphi (IPHI), Horizon Therapeutics (HZNP) and D.R. Horton (DHI).

Alibaba (BABA), up 1.7% in twice normal trade, hit a new high. Shares climbed past a 299.10 buy point of a flat base. They remain in potential buy range, which tops out at 314.06. IBD Stock Checkup assigns the China online retail giant a best possible 99 Composite Rating. Alibaba is an IBD Leaderboard stock.

Among IBD 50 losers, SciPlay (SCPL) and Sportsman’s Warehouse (SPWH), however, fell about 3% apiece.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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