Stocks straddled the breakeven line at Thursday’s open, as earnings and company news stirred mixed trade. The day’s biggest news may come late, as investors looked toward key reports from Adobe (ADBE) and Oracle (ORCL) after the close, and to the unveiling of Tesla‘s (TSLA) new Model Y later Thursday night.
In earnings news, General Electric (GE) surged while Dollar General (DG) took a dive; recent IPOs MongoDB (MDB) and Domo (DOMO) spiked in early trade. Another IPO, Innovative Industrial Properties (IIPR), which is both a REIT and a marijuana stock, prepared to add a new high to its 71% advance since the start of the year.
The Dow Jones Industrial Average traded effectively flat shortly after the open. The S&P 500 wobbled between narrow gains and losses. The Nasdaq Composite inched up into a fractional gain, as Apple and Tesla each gained around 1%.
Apple led the Dow Jones industrials, up 0.9%, after Cowen & Co. initiated coverage with a outperform rating and a 220 price target. Johnson & Johnson dropped 0.8% on reports that a California judge ordered the company to pay $29 million to a woman dying of cancer, potentially related to her use of the company’s talc-based products.
Boeing Update: U.S., Boeing Agree To Ground 737s
Boeing stock dropped to narrow losses in early trade. President Donald Trump stepped in Wednesday and, through the Federal Aviation Administration, ordered all Boeing 737 Max jets grounded in the U.S. Boeing agreed, saying that an “overabundance of caution” was necessary in order to reassure the flying public, as news reports emphasize similarities between recent 737 Max crashes in Ethiopia and Indonesia.
Before the U.S. announcement, Canada had joined in the long list of countries that had grounded their 737 Max fleets, barred them from flying in their airspace, or both. Investigators are looking into possible problems in the interaction of faulty airspeed indicators and automated flight systems, as well as other possible factors. Boeing has released an upgrade to the automated flight systems in question.
Boeing shares fell 10.7% for the week through Wednesday. That triggered round-trip sell signals following an early February breakout, and left shares trading below their 10-week moving average, but still above their 40-week line. Investors tempted to jump into the beaten down Dow Jones stock should wait for a proper base to form.
Dow Jones Rebounds; Can S&P 500 Hold 2,800?
The Dow Jones Industrial Average has staged a nice bounce off a test of support at its 200-day moving average this week. The Nasdaq added a third session to its rally, up 3.2% for the week through Wednesday as it pushed above 7,600 and gained some margin above its 200-day line.
The S&P 500 rose 2.5% through Wednesday. That placed the index back above the 2,800 mark for the fourth time since October. Those prior advances were unable to hold above that level for more than three days. The index traded narrowly above the 2,800 level early Thursday. If it can hold, it would send a bullish signal for the market’s uptrend.
For more detailed analysis of the current stock market and its confirmed uptrend, study the Big Picture.
IPO Earnings News: MongoDB, Domo, Innovative Industries
MongoDB surged 18% to a new high, after reporting better-than-expected results for the fourth quarter. The New York-based software developer has no buy points in sight, but had staged breakouts in December and February. Through Wednesday, it had gained 25% since the start of the year.
Utah-based software developer Domo soared nearly 18%, also nailing a fresh high, after reporting sharply higher revenue and declining losses for its fourth quarter. The stock ended Wednesday up 35% since clearing an IPO base in January.
Innovative Industrial Properties swung almost 4% higher after reporting late Wednesday its fifth straight quarter of triple-digit revenue growth. The San Diego-based real estate investment trust concentrates on properties used to grow medical marijuana. The stock broke out of bases in November and January, and is up 71% since Jan. 1.
Oil Prices: WTI Breaks Above $58
Oil prices will be on investors’ radar Thursday after driving above a key benchmark on Wednesday. West Texas Intermediate climbed 2.5% in a third straight gain on Wednesday, climbing above $58 per barrel for the first time since Nov. 13. That put WTI almost 38% above a Dec. 24 low, and on track to lodge a third straight monthly advance.
The Energy Information Administration on Wednesday reported a surprise decline in U.S. stockpiles. Outside the U.S., the Organization of Petroleum Exporting Countries and Russia continue to trim oil production. U.S. sanctions vs. Venezuela have also helped to tighten the oil supply picture.
WTI futures reversed early losses and rose 0.4% early Thursday, rising toward $59 per barrel. Europe’s Brent benchmark gained 0.5% to $67.86. Among oil ETFs, the Citigroup Global Markets VelocityShares 3x Long Crude (UWT) climbed 1.1% in early trade, after gaining 7.6% Wednesday and rising 12.1% so far for the week. The United States Oil Fund (USO) gained 0.4%, following a 2.5% advance on Wednesday and showing a 12.2% gain for the week.
May Pushes Her Plan Ahead Of Brexit Delay Vote
In Britain, lawmakers confirmed in two votes on Wednesday a broad agreement that the country should not exit the European Union without a trade deal in place. A vote on Tuesday had crushed Prime Minister Theresa May’s latest proposal for such a plan, leaving the country without a trade protocol ahead of a March 29 exit deadline.
The results leave Britain little option but to ask EU regulators for an extension to its exit deadline. That request is, in itself, a complex effort, one which would require approval of all 27 EU member states. A vote on an extension was reportedly set for late afternoon in London. The prime minister had called for an early afternoon meeting of her cabinet, and is reportedly set to attempt to ram through an agreement on her proposed Brexit plan ahead of the exit delay vote.
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