Stock market indexes rose in a constructive Thursday session, posting gains for the third day in a row. Nasdaq led the action once again but the majority of buying pressure was confined to midcap and big tech stocks.
The Dow Jones Industrial Average rose 0.5%, less than the S&P 500's 1% gain. The Nasdaq composite rallied 1.4% but an underperforming Russell-2000 small cap index indicates that buying pressure favored FAANG and other widely held issues.
NYSE preliminary closing volume rose 2.1% compared to Wednesday while Nasdaq volume fell 14.4%.
Gold surged back above 1,700 after the European Central Bank (ECB) raised interest rates by 50 basis points. U.S. bond yields fell across maturities.
Railroads were mixed after generally positive earnings reports, with CSX Systems gaining 4.2% on the session while Union Pacific fell 1.2%.
Tesla rallied 9.8%, closing above 800 for the first time since May 11. The EV maker reported better-than-expected Q2 earnings, despite supply shortages and a plant closure in Shanghai.
Microsoft recovered from early losses, closing above the 50-day moving average despite news it will slow hiring in its Azure and security divisions. The company will report second-quarter earnings on July 26.
AT&T gapped through the 200-day moving average and fell 7.6%, despite better-than-expected Q2 results. Aggressive sellers emerged after the company lowered its 2022 free-cash-flow guidance.
Carnival Cruise plunged 11.2% after pricing a $102 million secondary offering at $9.95 a share. The company has issued multiple public offerings since 2020 to stay afloat. Newly-issued shares dilute the value of all other shares.
Labor Market Signs Of Weakness
Weekly jobless claims rose to 251,000 from 244,000 in the prior week, higher than 240,000 estimates. The latest numbers add to growing evidence the job market is softening.
The Philadelphia Fed Manufacturing index, an indicator of industrial manufacturing trends, fell by a surprising 12.3. Consensus estimates for a 0.4 increase were missed by a country mile. The index has now posted negative numbers for two months in a row. More importantly, June's -3.3 marked the first negative report since 2008.
Peak Earnings Season
Stock market players are already looking ahead to next week, when Intel, Amazon, Alphabet and Facebook-parent Meta Platforms are set to report.
So far this earnings season, traders have rewarded companies posting better-than-feared second quarter results. These buy-the-news reactions could evaporate if inflation expectations surge but a ton of cash on the sidelines suggests this is the long-awaited summer rally.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32036.77 | +161.93 | +0.51 |
| S&P 500 | (0S&P5) | 3999.10 | +39.20 | +0.99 |
| Nasdaq | (0NDQC ) | 12059.61 | +161.96 | +1.36 |
| Russell 2000 | 182.43 | +0.94 | +0.52 | |
| IBD 50 | 27.46 | +0.12 | +0.44 | |
Last Update: 4:20 PM ET 7/21/2022 |
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If so, it won't last forever, alerting risk-conscious investors to use higher prices to review their holdings and sell a few losers, in anticipation of tougher market conditions in the fourth quarter.
Thursday Stock Market Highlights
SolarEdge Technologies closed above the 200-day moving average for the second day in a row. This IBD 50 component is forming a cup-with-handle base and 314.62 buy point. The near-perfect 98 Composite Rating is underpinned by a 23% growth rate. Its 2023 annual earnings are expected to surge 73% above respectable 2022 levels.
The stock has beaten earnings estimates by double-digit percentages in each of the last four quarters.
Elf Beauty rose 2.8%, breaking out of a cup-with-handle base. It rallied above the 33.54 buy point, closing within the 5% buy zone.
Agilon Health rallied to a 2022 high, briefly crossing the 28.15 buy point. It ended the session with a 3.8% gain while booking the highest daily volume since May 31. Accumulation/Distribution has surged to a bullish "A-" Rating.
The company is expected to report the first full-year profit in its five-year history in 2023. AGL provides capital and business model assistance to physician groups.
This week's New America pick AdaptHealth added to weekly gains, closing at another six-week high. No. 18 on the IBD 50 list, this medical equipment and respiratory therapy service provider broke out above the 200-day moving average on July 15 and has rallied for five sessions in a row.
AHCO has reported a profit and beaten earnings estimates in each of the last four quarters, after a painful $3.08 per share loss in fiscal year 2020.
Follow Alan on Twitter @Msttrader.
