The Dow Jones Industrial Average soared as the stock market brushed off hawkish talk from Fed Chairman Jerome Powell. Restaurant stock Cava exploded on its debut while Domino's Pizza delivered a meaty gain. Goldman Sachs rose despite a Silicon Valley Bank probe.
Breakouts were thin on the ground despite the encouraging index action. Splunk and CRH tested buy points while Encompass Health neared an entry.
The 10-year Treasury yield fell 8 basis point to 3.72% while the two-year yield dropped 7 basis points to 4.64%. The yield curve remains inverted.
Stock Market Shrugs Off Fed Chair Powell: Consider This
Investors seemed to shake off the so-called "hawkish pause" from the Federal Reserve Wednesday. Central bankers also issued a dot plot indicating two more hikes lie ahead. But this is a notoriously unreliable gauge. Powell tried to strike the right tone in his post-meeting news conference.
Meanwhile, initial unemployment claims unexpectedly rose to 262,000 vs. the 248,000 expected for the week ended June 10, and matched the prior week's revised number.
U.S. retail sales rose 0.3% in May vs. April's 0.4% rise, according to Commerce Department data. They were expected to fall 0.1%, but the consumer remains resilient.
Oanda senior market analyst Edward Moya warned clients that they should take Powell and the rest of the FOMC seriously in light of recent data.
"The U.S. consumer remains robust, the labor market is slowly weakening, and the manufacturing sector is full of mixed signals," he said in a note to clients. "This morning's data won't move any Fed members, but if we continue to see healthy spending throughout the summer, the Fed will need to deliver on that dot plot forecast that has penciled in two hikes."
Nasdaq Flexes Muscles As IBD 50 Lag
The Nasdaq powered into the close, rising 1.2%. CrowdStrike was a top Nasdaq performer, rising 3.8%.
The benchmark S&P 500 also closed up 1.2%. CVS Health shined here as it jumped 4.3%.
The S&P 500 sectors all ended the day in positive territory. Communication services and health care were the best performers. Real estate gained the least.
The small-cap Russell 2000 rose 0.7%. Growth stocks lagged the most, with the Innovator IBD 50 ETF up 0.2%.
Dow Jones Today: Microsoft Leads, Goldman Faces Probe
The Dow Jones Industrial Average surged 500 points, or 1.3%.
Microsoft, which has been lifted amid feverish sentiment surrounding AI, popped about 3%.
The likes of Amgen and UnitedHealth were also strong performers for the Dow Thursday.
Goldman Sachs closed up 0.4%. It briefly fell into negative territory after a report that the Federal Reserve and the Securities and Exchange Commission are investigating its role in the demise of Silicon Valley Bank.
The Wall Street Journal reported that the SEC and the Fed are demanding documents related to the banking giant's role as both buyer of the securities portfolio and advisor on a failed capital raise for the SVB, which failed after a run on its deposits.
There were only a couple of stocks falling on the Dow Jones today. Nike and American Express both fell 0.4%.
Cava Stock Soars In Stock Market Debut
Cava stock gave the IPO space a big boost after it rocketed on its trading debut.
The stock more than doubled before ultimately closing up 99% after it started trading on the New York Stock Exchange. Volume exceeded 16 million shares.
The stock was priced at 22 per share for its offering of over 14.4 million shares. It closed the session just below 44. The fast-casual Mediterranean restaurant chain currently operates 263 outlets.
While the IPO market has been slow so far in 2023, the explosive move of Cava stock will give bulls some encouragement.
Domino's Stock Delivers Feast Of Gains
Domino's stock was a top performer on the S&P 500, rising 6.5%. Stifel upgraded the stock from hold to buy and hiked its price target from 320 to 350.
Analyst Chris O'Cull said in a note to clients that over the next 12 months the company "will stabilize delivery sales and continue growing carryout sales to record levels."
The stock gapped above its 50-day moving average. However, this would be a very aggressive buy point. It remains shy of the 200-day moving average, MarketSmith analysis shows.
Domino's has been on a tear of late, rising in five of the past six sessions and advancing in the past four days in a row. DPZ stock turned in its largest increase since Oct. 13, 2022, when it rose 10.4%, according to Dow Jones Market Data.
Outside Dow Jones: Splunk Stock Tests Entry
With the stock market arguably in extended territory, few breakouts could be found.
Splunk is in a buy zone after clearing a cup-with-handle entry of 109.95. The handle, however, is quite deep and could be considered a cup base on its own.
Both earnings and stock market performance are strong for the database software maker. It holds an IBD Composite Rating of 96.
CRH stock is in a buy zone after clearing a flat-base entry of 52.20. This is a first-stage pattern. It is in the top 11% of stock market performers over the last 12 months. The asphalt maker has been lifted following the news in June that shareholders approved plans to move the stock from the London Stock Exchange to the NYSE.
Meanwhile, Encompass Health has formed a cup base with a buy point of 66.44. The company operates 157 inpatient rehabilitation hospitals across 37 states and Puerto Rico.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
