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The stock market today transitioned from seesaw action into broader advances in afternoon trading as the Nasdaq composite — up more than 1% — led the upside with the help of gains that set up a follow-on buy point for artificial intelligence bellwether Nvidia (NVDA). Other large-cap indexes followed suit Thursday by erasing mild losses and turning moderately higher.
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Bond prices continued to weaken in recent days, sending up yields and creating a near-term headwind for stocks. However, the 10-year Treasury bond yield halted its strong rise on Thursday.
The Dow Jones Industrial Average bore the brunt of morning selling, down as much as 0.6% to 38,221. But the blue chip index trimmed those losses by afternoon and was up 0.1%.
At least five of the 30 Dow components rose 2 points or more. But at least seven slumped 1 point or more, including struggling health-care play UnitedHealth (UNH), part of the IBD Long-Term Leaders, and Wall Street giant Goldman Sachs (GS). Bloomberg reported that Goldman’s treasurer has left to take a position at a large hedge fund.
On Friday, JPMorgan Chase (JPM), BlackRock (BLK) and Wells Fargo (WFC) are among the financial institutions that report first-quarter results.
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A New Buy Point For Nvidia
AI chip giant Nvidia, a mainstay on the Leaderboard portfolio for more than a year, tested the 10-week moving average near 841 and is trying to erase losses for the week. Shares in the AI processor powerhouse gained as much as 14 points to an intraday high of 898.58.
During lunchtime on Wall Street, Nvidia held those gains admirably. Please read this IBD story for more details on whether NVDA stock is a buy or sell now.
The megacap tech and true leader in the stock market holds a sterling 99 Composite Rating on a scale of 1 to 99.
This Investor’s Corner highlights the benefit of buying powerful growth stocks on the first or second pullbacks to the 10-week line after a breakout. In Nvidia’s case, the 5% buy zone from the new follow-on buy point goes from 841 up to 883. So the stock has already gotten extended from that entry.
Stock Market Today
Along with Nvidia, other chip shares led the upside, with enterprise software firms also picking up steam for the tech-heavy Nasdaq index. The Nasdaq led all major indexes in afternoon action, climbing more than 200 points for a 1.3% gain.
The S&P 500 posted moderate gains, as it moved nearly 0.7% higher. That stretched its year-to-date gain to 8.9%.
The Russell 2000, which undercut its 50-day moving average Wednesday in the wake of a disappointing report on March consumer prices, initially eased nearly 0.4% but turned higher by nearly 0.7%.
On Thinkorswim, losers topped winners early. But as of 1:15 p.m. ET, on the New York Stock Exchange, risers and decliners were virtually equal. And Nasdaq exchange gainers led decliners by a thin 11-9 margin.
Volume was running nearly 16% lower on the Nasdaq and roughly 12% lower on the NYSE vs. the same time on Wednesday.
A Sell Signal Triggered By Fastenal
Some building-related firms suffered sharp declines.
Fastenal (FAST) led the downside in the stock market. Shares, off 5% in volume running more than quadruple normal levels, gapped down at the open and briefly traded below 70, triggering a sell signal by collapsing below the 50-day moving average after a solid run-up.
Notice on a weekly chart how Fastenal has also pierced below its 10-week moving average for the first time in months, a bearish change in character. A few weeks ago, Fastenal saw its mid-October gain from a breakout past a trendline entry near 57 hit nearly 39%.
The building products supply chain reported flat first-quarter earnings at 52 cents a share. Sales inched 2% higher to $1.9 billion. That matched the slowest year-over-year gain in at least eight quarters.
Also on Thursday, savvy investors are keeping a close eye on the cost of money. In recent days, the yield on the 10-year U.S. Treasury bond has lifted from 4.3% to as high as 4.58%. As bond prices fall, their return, or yield, goes up, making them more appealing vs. equities.
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More Tech Stocks To Watch
Going back to tech stocks, Alphabet (GOOGL) continued to move past a fresh buy point of 153.78 in a nine-week base. The web search titan is working on its own chips for cloud computing and accelerated computing.
The stock is in a buy zone up to 161.47. Google shares, up more than 1.5% to 158.61 in afternoon action, are on track to rise four of the past five sessions.
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Leading Retailer In The Stock Market
Elsewhere in the stock market, Costco Wholesale (COST) retook its 50-day line as shares moved 1.3% higher and attempted a third straight gain. The company announced a quarterly dividend hike of 14 cents to $1.16 per share. A new base is forming.
After the close Wednesday, the membership-based discount retail chain posted a 6.4% year-over-year jump in net sales for the first 31 weeks of its fiscal year, to $146.6 billion.
Costco is a stock market leader, rising as much as 41% since the key follow-through day on Nov. 1 that indicated a new tradable rally had begun. The S&P 500 has gained 24% over the same time-frame.
On the downside, Regeneron Pharmaceuticals (REGN) initially dropped more than 2% to its lowest level since mid-January. A big slide below the 50-day moving average last week did not come in heavy volume. However, loss of support at the key technical level suggests further weakness ahead.
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The biotech giant reportedly is under investigation by the Department of Justice for potential pricing fraud related to its Eylea medicine to treat wet age-related macular degeneration.
Regeneron shares hold a mediocre 73 Relative Strength Rating. According to MarketSurge, Regeneron’s RS Rating over the last three months is even worse at 33. The RS line has been sloping lower since late February.
Please follow Chung on Twitter: @saitochung and @IBD_DChung
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