The Dow Jones Industrial Average moved higher in a positive session Thursday that saw the bulls overpower the bears. But the brief GameStop (GME) rally came to a painful end as Treasury Secretary Janet Yellen met with regulators to discuss the Reddit short squeeze. Visa (V) and Apple (AAPL) outperformed in the Dow Jones.
Among EV stocks, Tesla (TSLA), General Motors (GM) and Nio (NIO) all hit reverse gear. Meanwhile health stock Veru (VERU) and Canada Goose (GOOS) were among the notable names passing buy points.
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Before the open, the Labor Department reported 779,000 Americans filed applications for first-time unemployment assistance in the week ended Jan. 30. The final piece of weekly jobless data from 2020 was 8% lower than the prior week’s surprise dip to 847,000 claims, and was well below the 835,000 new applications projected by economists.
It was the second piece of improved news ahead of Friday’s payrolls report for January. On Wednesday, ADP had reported that U.S. private employers added 174,000 workers in January, more than triple the 50,000 new hires estimated by economists.
Fourth quarter productivity and labor cost data was less optimistic, with productivity declining 4.8% and unit labor costs up 6.8% for the quarter.
Nasdaq, S&P 500 Rise
The Nasdaq in the running to be best performing major index of the day as it gained around 0.9%. Top performers included Align Technology (ALGN), which gained more than 12%, and Match.com (MTCH). Qualcomm (QCOM) was a major laggard, slipping more than 9%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31007.05 | +283.45 | +0.92 |
| S&P 500 | (0S&P5) | 3863.28 | +33.11 | +0.86 |
| Nasdaq | (0NDQC ) | 13733.28 | +122.74 | +0.90 |
| Russell 2000 | (IWM) | 218.53 | +4.28 | +2.00 |
| IBD 50 | (FFTY) | 45.77 | +0.79 | +1.76 |
Last Update: 2:50 PM ET 2/4/2021 |
||||
The S&P 500 was only just behind, and also rose by around 0.9%. Notable performers included Victoria’s Secret parent L Brands (LB), which swelled by a robust 10%.
Volume was lower compared with the same time on Wednesday. It fell more than 5% on the Nasdaq and slipped around 3% on the NYSE.
Sectors were almost all positive. Financials and industrials were faring best, with materials the only laggard.
Small caps were turning in eye-catching outperformance compared to the major indexes. The Russell 2000 gained almost 2%.
Growth stocks were also having a good day, with the Innovator IBD 50 ETF (FFTY) was up more than 1%.
Apple Stock Helps Dow Jones
The Dow Jones Industrial Average was vying with the Nasdaq to be the best performing major index. The blue-chip index was up 0.9%, closing in on an all-time high.
Apple stock was among the components turning in good gains. It rose by around 2% after reports said the company is in talks with Hyundai-Kia to build an Apple-branded electric car. Apple stock is just below a 138.89 buy point.
Visa and Travelers (TRV) were the biggest gainers however, rallying almost 4%.
Janet Yellen Meeting Pressures GameStop Stock
GameStop stock was forced lower as Treasury Secretary Yellen got set to discuss Reddit-focused trades with regulators.
Yellen was meeting with officials from the Securities and Exchange Commission, the Federal Reserve, the New York Fed, and the Commodity Futures Trading Commission.
“We really need to make sure that our financial markets are functioning properly … and that investors are protected,” Yellen told Good Morning America Thursday ahead of the meetings.
GameStop had rallied Wednesday, but the rally came to an abrupt end today, with shares down nearly 40%. It is well off last week’s high of 483.
Despite the fall, GME stock retains a perfect Relative Strength Rating of 99, helped in part by a 400% gain last week. It shot up amid coordinated trading by retail investors using the WallStreetBets chat room on Reddit.
Other stocks promoted on the chat room were also struggling. Cinema chain AMC (AMC) was down almost 20%, while BlackBerry (BB) rallied from the red to gain almost 1%.
Tesla Stock, Nio Stock Hit Reverse
IBD Leaderboard stock Tesla fell again, slipping by around 1%. While it is off session lows, it is on track for a second down day in a row.
Tesla stock still has a best-possible IBD Composite Rating of 99. Its stellar stock market performance is key. However, a recent pullback triggered an 8% sell rule from a high-tight-flag pattern.
Chinese rival Nio is falling again after Wednesday’s up day. It fell around 0.4%. A previous breakout from a cup base with a 57.30 buy point failed because it erased a double-digit gain from the buy point.
Auto giant General Motors was down more moderately, slipping around 0.3%. GM stock is trying to one again reach a profit-taking zone after previously breaking out from a cup base on positive EV news. The buy point was 46.81.
These Stocks Pass Buy Points
Veru stock broke out from a consolidation pattern after surging past a 11.55 buy point, MarketSmith analysis shows. The RS line also hit a new high.
The medical products stock has a Composite Rating of 80, but earnings are a weakness. It holds an EPS Rating of 34.
Canada Goose stock gapped up past a cup with handle buy point of 36.96 on strong earnings. Volume was massive. However the clothing stock holds a poor Composite Rating of 57.
Tech products and services stock CDW (CDW) is still in the 5% buy zone after clearing a cup base buy point of 147.05.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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