Major indexes rose in today's session though they pared some of those gains in the closing hour. The Dow Jones Industrial Average led as a big week of tech earnings kicks off. Several growth stocks topped buy points.
The blue chip index opened nearly 1% higher and rose further 1.6% to close with a 1.3% gain at 4 pm ET. The S&P 500, which also rose nearly 1% earlier, gained to close 1.2% higher. The tech-dominated Nasdaq composite climbed 0.9% as tech giants line up for earnings and closed at that level.
The small-cap Russell 2000 lagged the market and closed 0.4% higher. The Innovator IBD 50 ETF rose over 1% in today's stock market.
Volume on the NYSE was slightly lower while that on the Nasdaq was higher compared to the same time Friday.
The yield on the benchmark 10-year Treasury note slipped 1 basis point though it is still above 4%, at 4.22%. Crude oil fell to $84.75 a barrel.
Stocks Breaking Out Today
Vertex Pharmaceuticals is breaking out of a flat base with a buy point of 306.05. Volume surged as the stock rose nearly 3%. Vertex is on the IBD 50 and the IBD Leaders Watchlist. Vertex's earnings are due Thursday.
McKesson is clearing a flat base with a buy point of 375.33. The relative strength line for the health care products distributor is at a 52-week high.
In auto parts, Genuine Parts is also up from a flat base and buy point of 165.09, also with a 52-week high relative strength line. O Reilly Automotive is breaking out from a cup base with a buy point of 750.98.
Parsons is trying to break out from a flat base buy point of 43.94. Logistics and transport company Covenant is breaking out past a buy point of 34.90. Shares also have a relative strength line at a 52-week high, but the stock is thinly traded.
Chinese ADRs are tumbling with leading stocks such as e-commerce giants Alibaba and Pinduoduo, and search engine Baidu, falling. EV companies Nio, XPeng and Li Auto are also all down sharply.
Tencent fell nearly 15%. Alibaba is down near its September 2015 lows. The Invesco Golden Dragon ETF is on pace for its worst month since December 2004. Shares are approaching August 2012 lows as they fall over 15%.
Chinese assets slid after Chinese leader Xi Jinping bolstered his control over the ruling Communist Party. The yuan weakened and fell to 7.33 per dollar. Foreign investors rushed out of China's domestic stock market.
Manufacturing Economic Data Cools
The Purchasing Managers' Index showed weaker manufacturing activity and fell to 49.9 in October, down from September's 52. Services fell to 46.6 from 49.3. The slowdown could support the case for easing the pace of interest rate increases after November.
Earlier, CEOs had factored in an 81% chance of a shallow and short recession in 2023 while 12% expected a deeper one with wide reaching effects. A hard landing, however, cannot be ruled out after CEO confidence fell to 32 in October — a level last seen during the Great Recession.
Combined with a more general take on inflation-driven recessions, Morgan Stanley Chief Investment Strategist Lisa Shalett observed earlier that recessions due to crisis in credit markets typically are longer and deeper.
Monetary tightening efforts to curb inflation have led to a smaller dent in corporate profits going by the 1982-83 and 1973-74 cycles. They've also caused corporate profits for the S&P 500 to fall around 15%. Steeper declines of 57% and 32% accompanied the credit crisis of 2008 and the tech bubble bear market of 2000, respectively.
Dow Jones Stocks On Tap
Tech leaders and other notables report starting Tuesday. Dow Jones stock Microsoft and Google parent Alphabet are on deck on Tuesday. Dow Jones component stock Boeing reports on Wednesday.
Other Dow Jones components Apple, Merck and Amazon.com announce Thursday. Merck is in a buy zone from a buy point of 95.82. Other tech stocks are in correction ahead of earnings though they have started trending toward their 50-day moving average.
