The Nasdaq composite gave back the majority of its early-morning advance, but buying picked up again as trading headed into the close Thursday. The tech-heavy index got a big boost from Micron Technology and other semiconductor stocks. Yet small and midcap companies still advanced bullishly and led their large-cap peers on the stock market today.
The Nasdaq finished the day 0.6% higher, chalking up its fourth straight gain. It surged as much as 1.3% in morning action before giving back roughly half that advance. The Nasdaq 100 climbed 0.7%.
The S&P 500 followed the Nasdaq's tail, up 0.4%, notching yet another new high in the process. Small and midcap stocks did better, with the Russell 2000 up 0.7% and the S&P MidCap 400 rising nearly 0.9%.
Small caps still lag in terms of year-to-date performance. At 2,214, the Russell is up 9.2% since Jan. 1 vs. a nearly 21% rise by the S&P 500. The NYSE composite rallied 0.6%, setting a new a closing high and an all-time intraday high of 19,528 in the process.
Volume Is Up, Breadth Positive
Volume ran more than 26% higher vs. the same time Wednesday on the New York Stock Exchange and a touch over 18% on the Nasdaq.
The Dow Jones Industrial Average rose more than 0.6% on the back of strength among its tech, banking and industrial components. The Dow Jones notched a session high of 42,224, just 75 points below its all-time intraday peak.
Breadth was positive. On the MarketSurge homepage, 431 stocks moved higher in above-average volume while 166 fell in heavy turnover. Such statistics point out the higher possibility of growth stocks breaking out of bases or rebounding off key moving averages and presenting follow-on buy points, such as a robust jump off the 10-week moving average.
Further, the yield on the key U.S. Treasury 10-year bond edged up 1 basis point to 3.79% ahead of key U.S. inflation data hitting the news wires early Friday. And West Texas intermediate crude oil futures tanked, falling more than 3% to 67.42 a barrel.
3:24 p.m. ET
Caterpillar Shares Find Wiggle Room
At least eight of the 30 Dow Jones stocks heated up 2 points or more. They included Caterpillar, which has led the Dow Jones with a gain of 17% in the third quarter so far.
Caterpillar stock, up nearly 14 points to 392.18 on Thursday, has rallied more than 10% past a cup with handle that's lodged inside a longer pattern.
That eight-week cup with handle shows a 356.46 entry for the mining and construction equipment supplier. Wall Street is expecting paltry growth of 4% in earnings for Caterpillar this year and next.
Stock Market Today: AI Stock Pummeled Again
The midday pullback in the stock market today may in part had been triggered by a deep sell-off in Super Micro Computer. A darling during the market's run-up in 2023, shares slid more than 19% at its session low of 373.01 before clawing back some of that big loss. Still, Super Micro stock has now collapsed 67% below its all-time peak of 1,229 set on March 8.
Super Micro got slammed on a Wall Street Journal report that the San Jose, Calif.-based firm is under a Department of Justice investigation regarding its business and accounting practices.
Super Micro had already fallen sharply on news that it was delaying a key annual filing to the Securities and Exchange Commission. The company specializes in building out data centers capable of handling artificial intelligence and accelerated computing workloads.
Super Micro issued a defensive sell signal to take profits during the week ended April 12, when shares sliced through the 10-week moving average at 934.72 for the first time after a solid breakout two months earlier. The next week, the stock reversed hard and fell further below its 10-week line in accelerating volume.
Vistra Ends Huge Win Streak
Other AI-related big caps also took a well-needed break.
Vistra, a power producer generally seen as benefiting from the expected explosive growth in demand for electricity needed to power AI activities, reversed off it session high of 122.01 and dropped 3.5% in heavy trading.
The negative reversal looks normal after the stock rallied 13 sessions in a row. But it also affirmed the importance of avoiding a buy when a market leader is extended well past the proper buy point.
On Sept. 13, Vistra delivered an early buy point as it crossed a trendline and an 81 entry. On Friday last week, Vistra surpassed the standard buy point of 107.24 within its four-month base. From that entry, the 5% buy zone went up to 112.60.
Vistra sports a decent 88 Composite Rating on a scale of 1 to 99. Analysts see robust growth in earnings this year to $4.55 a share, up 27%, and a 36% gain to $6.18 for 2025.
12:51 p.m. ET
Stock Market Today: Transports Rebound Again
Stocks in the transport and chip sectors continued to lead the upside. The VanEck Semiconductor exchange traded fund outperformed the major stock averages with a 2% gain. The ETF recently retook the 50-day line. Shares hold a good 85 Relative Strength Rating and is working on the right side of a new base.
The Dow Jones transportation average, up 1.3%, got a fresh boost from news on Southwest Airlines, which flew more than 7% higher.
Southwest, a major passenger carrier, issued improved metrics in the current quarter, including revenue-per-available-seat mile that beat estimates. Southwest also announced a $2.5 billion stock buyback, or 13% of its current stock market value of $18.7 billion.
Meanwhile Chinese companies continued to rise sharply. Ping An Insurance, a giant in its industry within the world's No. 2 economy, shot more than 11% higher in volume running nearly triple usual levels.
Ping An cleared an 11.82 entry in a four-month cup without handle. The 5% buy zone goes up to 12.41. Electric-vehicle firm Nio rolled nearly 5% higher and continued to move past a 5.66 buy point in a first-stage low-priced base.
10:41 a.m. ET
Micron Soars In Spirited Action
Micron paved the way for spirited buying, as it soared more than 16% in recent action on the stock market today. The giant in memory chip and data storage technology issued a bullish revenue forecast that blew past analyst estimates.
Micron has plunged 46% from its June peak of 157.53. That is abnormal for most leading stocks that are correcting in price and building a new base. That said, recent action resembles a double bottom showing a buy point at 111.
Please keep in mind that this is a very aggressive entry for traders, although Micron has bullishly catapulted above the 50- and 200-day moving averages.
The 23 Relative Strength Rating for Micron is very weak. It should improve quickly. The three-month RS Rating is even worse at 12, according to MarketSurge. But this rating should rise fast too.
Arm Flexes Its Muscles
Another technology name, chip play Arm, also joined the breakout list. The major player in semiconductor design rallied 3% and shoved past a 149.93 entry point in a cup with handle.
One risk? The high of the handle is still more than 15% below the cup's left-side high. Generally, prefer stocks that form a handle when they are much closer to the cup's left-side peak, ideally around 5% to 10%.
That said, the British company showed it is a true winner on the stock market today. Arm has tripled since it returned to the market with an initial public offering priced at $51 per share in September 2023.
Stock Market Outlook For The Next 6 Months
Stock Market Today: Vista Energy Sells Off
On the downside, Vista Energy sold off hard for a second straight session. Shares in the oil explorer, which focuses on Mexico and Argentina, dropped more than 5% in heavy turnover early. Vista undercut the 50-day moving average, a no-no for stocks that have recently broken out.
Vista Energy, highlighted in the first half hour of Thursday's IBD Live show, also dropped more than 7% below a recent buy point at 49.58. The golden rule of investing, keeping losses small, remains paramount even during a strong confirmed uptrend.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
