The major indexes faded in late trading and closed well off session highs Thursday.
The Nasdaq closed less than 0.1% higher after being up nearly 1%. The S&P 500 reversed lower a fraction after being up around 0.6% earlier. The Dow Jones Industrial Average did better with a 0.4 gain.
Volume rose on the Nasdaq and edged lower on the New York Stock Exchange, according to unconfirmed data.
The stock market today showed a broader array of leadership, despite that breadth turned negative. Chubb, the IBD Stock Of The Day and a key holding of billionaire value investor Warren Buffett, offered growth stock investors a timely buy point.
Other market-leading insurers to watch include specialty insurance firm Kinsale Capital, which is a member of IBD Long-Term Leaders; insurance broker Brown & Brown, a quarter-size position and new stock in the IBD Leaderboard model stock portfolio; and Dow Jones Industrial Average component Travelers, up 8% in massive turnover.
Travelers, which reported Q3 results, boasts a fast-rising relative strength line. It's also one of 10 members of the Dow Jones industrials holding a Relative Strength Rating of 80 or higher.
Indexes exhibited further optimism over the economy and future earnings on Thursday, with Taiwan Semiconductor encouraging investors in the semiconductor sector.
Fund Managers Banking On Bank Stocks
Meanwhile, regional banks also showed solid gains in recent days, presenting new buy opportunities for intrepid investors who use chart analysis to their advantage.
For instance, U.S. Bancorp continued its breakout from a high-quality base. A 1.7% gain on Thursday padded the stock's weekly advance to more than 8%. At this week's high of 50.47, the superregional bank is getting past the 5% buy zone from a 47.31 buy point in a well-built flat base.
U.S. Bancorp stock has not suffered a down week in heavy turnover since June. The stock on Tuesday reversed lower after the bank posted 2% declines in both third-quarter earnings and sales vs. a year ago. Shares started to rebound Wednesday.
The three-month Relative Strength Rating of U.S. Bancorp is very good at 86, 4 points higher than the standard 12-month RS Rating of 82, according to MarketSurge. Savvy growth investors use the three-month, six-month and 12-month Relative Strength scores to determine which companies are emerging as true leaders in the stock market today.
The RS Rating compares a stock or exchange traded fund with all stocks in the IBD database. The relative strength line compares a stock's action vs. the S&P 500 on a daily, weekly or monthly chart at Investors.com. Prefer those companies that show a rising RS line.
Near A Key Sell Zone
Also in the same banking sector, PNC Financial is up more than 1% for the week and stretched closer to a 20% profit goal from a flat-base buy point of 162.24. PNC broke out of its base on July 10, when shares rallied 1.7% in active trading.
Among actionable ETFs, SPDR S&P Regional Bank gushed 4% higher for the week so far, rising past a handle entry of 59.14 within it shallow 11-week base.
These two sectors are faring better than the S&P 500 so far in recent months. IBD's property and casualty industry group has advanced 10% since the start of the month, and the superregionals are up 20% over the same time. The S&P 500 has gained 7%.
1:57 p.m. ET
Jobless Claims Decline
Weekly U.S. jobless claims cooled to 241,000 vs. an upwardly revised 260,000 in the prior week, a good sign for the labor market. Meanwhile, retail sales excluding vehicles ramped up 0.5% in September, well ahead of a 0.1% increase seen in Econoday's survey.
The yield on the U.S. Treasury 10-year bond climbed seven basis points to 4.09%, likely on the decent economic and mostly solid earnings data. Why? Strong data lessens expectations of big rate cuts in short-term interest rates in the near term.
Chubb, which has reported solid results in recent quarters and is slated to post Q3 numbers on Oct. 29, rushed past a 294.18 buy point in a flat base that showed a mild decline, a bullish sign. Shares ramped up 2.3% in healthy volume.
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In fact, the property and casualty insurance group, which faces massive claims expenses in the wake of two hurricanes that battered Florida, Georgia and the western part of North Carolina, actually showed a 0.7% gain on a price-weighted basis, outperforming key benchmarks in the stock market today.
The 5% buy zone in Chubb goes from 294.18 up to 308.89.
Chubb's earnings, however, look set to continue to decelerate, based on MarketSurge data. Earnings ripped 108% higher in the fourth quarter of 2023, then decelerated to growth of 23% and 9% in Q1 and Q2. According to FactSet, Wall Street expects earnings to climb just 1% to $4.98 vs. a year earlier in the just-ended third quarter.
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Decliners Beat Advancers
Also in the property and casualty space, Cincinnati Financial rose more than 1.3% in heavy trading. The large cap trotted past a 139.34 buy point in a six-week flat base and is in buy range. Watch for earnings on Oct. 24.
On the NYSE, falling stocks outmatched risers by a roughly 4-3 margin. Nasdaq losers topped winners by roughly the same margin.
On the downside, Badger Meter triggered a pair of sell signals. The stock fell more than 9% in heavy volume and dipped 7% below a recent cup-with-handle's 207.97 entry. Stocks that fall 7% or more should get sold to keep losses small. Also, the handle on Badger's pattern lacked tightness relative to the decline within the cup, a key flaw in the base.
Badger, which reported decelerating earnings and sales growth (up 23% and 12%, respectively) in Q3, also sharply undercut the 50-day moving average, triggering a second sell signal.
See more key movers, both up and down, in IBD's Stocks On The Move table.
12:29 p.m. ET
Taiwan Semiconductor Leads Upside
U.S. retail sales rose 0.4% month on month in September, edging the Econoday consensus estimate of 0.3% growth. However, the MarketSurge Growth 250 saw dozens of leading stocks in the tech, financial and medical sectors leading the upside.
Taiwan Semi, gapping up at the open on a double-digit quarterly earnings and revenue rise, soared 13% in huge turnover. That price is more than 20% above a cup-with-handle base that featured a correct buy point of 175.45.
In a cup with handle, the handle represents a final shakeout of disgruntled investors that had been holding shares at a loss. A mild decline in the handle is favorable, because it suggests few willing sellers remain in the stock. The handle clears the decks for a potential strong move to new highs.
Taiwan Semi is listed on the New York Stock Exchange, yet it helped spark a 0.6% gain in the Nasdaq composite during early-afternoon trading. Invesco QQQ Trust, tracking the 100 largest nonfinancial companies in the Nasdaq, rose 0.7%.
Investors could consider taking gains when the stock rises 20% to 25% from the 175.45 entry, or reaching 210.54 to 219.31.
In the stock market today, VanEck Semiconductor jumped more than 3% in slightly above-average turnover. At a session high of 256.17, the exchange traded fund now trades just 9.5% below the left-side high of its current base.
Taiwan Semi offered a favorable update to its sales forecast. In the third quarter, sales grew 41% to $23.9 billion, boosting earnings 57% to $1.97 a share.
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Interestingly, TSMC, a member of IBD's semiconductor manufacturing industry group, is not in the day's best industry group.
According to IBD's analysis of 197 industry groups, hand tools ranked first, up 4%. And steelmakers rallied 2.7% as an industry group, ahead of a 2% rise in the fabless semiconductor industry group.
Within hand tools, Snap-On charged more than 8% higher and hit as high as 324.13. Shares are powering further past a recent breakout point of 292.62, or the Sept. 27 high. The action from Sept. 27 through Oct. 10 showed handle-like action on its long saucer-style pattern.
At 11% past the 292.62 buy point during Thursday's session peak, Snap-On is sharply extended past the 5% buy zone and investors should not chase it.
The global tool marketer's sales failed to grow for a second straight quarter, down 1% to $1.15 billion. However, Snap-On saw gross margin rise 30 basis points to 52.2% vs. the second quarter. Plus, operating margin, excluding financial services-related revenue, expanded by 80 basis points to a healthy 22%. The Kenosha, Wis., company grew earnings 4% to $4.70 a share.
Stock Market Today: Gains Fade On Indexes
The S&P 500 rose as much as 0.6% during the first hour of trading on the stock market today, but gains faded to around 0.3% in recent action. At the session's high, the benchmark index recouped all of Tuesday's steep loss, which was triggered by a wretched report on order bookings from former chip equipment sector leader ASML.
ASML, down mildly on Thursday, has fallen more than 22% in just three sessions. The megacap tech now trades more than 18% below its 50-day moving average, a sign of weakness while leaders ride their 50-day lines higher.
At around noon in New York, the Dow edged nearly 0.3% higher, as at least eight of the 30 components rose one point or more. But the Dow Jones transportation average lost more than 1%. Railroad firms dropped hard after CSX reported earnings.
Small caps cooled off after a bullish move on Wednesday, as the Russell 2000 slipped 0.5%.
11:06 a.m. ET
Insurance Sector Leader Makes Breakaway Gap
Travelers gave a bullish boost to the Dow Jones Industrial Average on quarterly earnings. The property and casualty insurer jumped nearly 8% on the stock market today and cleared a narrow consolidation that resembles a flat base.
Notice on an intraday chart how during the first five minutes of trading, Travelers traded as high as 260. That price can serve as an alternate buy point, known as a breakaway gap, given that investors could not have bought near the 243.48 alternate entry.
The Dow Jones component had in recent weeks dipped below a saucerlike pattern with a 232.75 entry point. Travelers, however, did not trigger the golden rule of investing during that early-October pullback, relating to cutting losses short.
Elsewhere in the stock market today, Elevance Health plunged nearly 13% and struck a low of 397.98 before clawing back a small amount of that big loss. Volume was soaring more than 27 times its 50-day average. The provider of a range of health insurance plans posted a 7% decline in profit to $8.37 a share, breaking a six-quarter streak of earnings increases.
Netflix Earnings Due
This afternoon, investors will focus on video streaming giant Netflix. The Nasdaq mainstay reports third-quarter results after the close on the stock market today.
The long-term big winner notched a fifth decline in a row, down 1.5%. The bulls and bears are waging a fight near the stock's 50-day moving average. Volume was running as high as 160% above the stock's usual pace.
Analysts see the bottom line rising 37% vs. a year earlier to $5.12 a share on a 14% increase in the top line to $9.8 billion.
These forecasts are impressive, given that in the year-ago quarter, Netflix's earnings accelerated 20% and revenue revved up 8%.
Mutual funds continue to enter the stock. According to MarketSurge, holders numbered 4,113 at the end of the third quarter vs. 3,225 at the end of 2022.
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