Stock market indexes gave back much of their Thursday gains as the major indexes stumbled in afternoon trading. A rally fueled by Wednesday's Federal Reserve ruling, coupled with positive economic data, was wearing off.
The Dow Jones Industrial Average eased gains to 0.1% after hitting another record high, while the Nasdaq composite reversed course and edged lower by 0.2%. The S&P 500 was flat to down in afternoon trades on the stock market today.
Meanwhile, the Russell 2000 index gapped up after Wednesday's strong gains and added 2.1%. The Russell continues to rise above its 200-day moving average.
Volume rose on the New York Stock Exchange and the Nasdaq vs. the same time on Wednesday.
The 10-year Treasury yield shed 9 basis points to fall below the 4% level at 3.94%. Several classes of Treasury bonds saw their yields tumble sharply after the Fed's decision Wednesday.
The Invesco QQQ Trust, which tracks the Nasdaq 100, pulled back 0.4%. The Innovator IBD 50 ETF reversed course and fell 0.5%.
Stocks Gyrate After The Fed
Enthusiasm from Wednesday's Fed actions spilled over earlier into Thursday's session before the market started to fade. Investors cheered Fed governors, who kept rates unchanged in a range of 5.25%-5.5% and indicated three 25-basis-point rate cuts are possible in 2024.
"Inflation keeps coming down. The labor market keeps coming into balance. So far so good," Fed Chair Jerome Powell said after the rate decision.
Meanwhile, the Labor Department said Thursday that weekly initial unemployment claims for the week ended Dec. 9 fell to 202,000 vs. estimates for 223,000, according to Econoday. That was lower than the prior week's revised 221,000. The dip in claims indicates an improving jobs market.
Also, the Commerce Department said November that retail sales rose 0.3% vs. the 0.1% drop expected, which marked an improvement from the revised 0.2% decline in October. The number excluding vehicles and gas rose a hefty 0.6% vs. the 0.1% rise expected.
Stock Market Movers: Solar Stock Shines
In the markets, Nextracker surged more than 7% in heavy volume and broke out of an irregular base with a 46.55 buy point. Its relative strength line hit a 52-week high on the daily and weekly MarketSmith charts. NXT is in the solar energy group, which holds the last place in the IBD 197 industry group ranking.
Solar stocks SolarEdge Technologies and Enphase also soared, notching double-digit gains.
Trex jumped for a second straight day Thursday and broke out of a cup base after bypassing the 76.05 buy point, according to MarketSmith pattern recognition. Shares popped after JPMorgan upgraded the stock to neutral from underweight and raised its price target to 79 from 62. Its relative strength line hit a 52-week high on the daily and weekly MarketSmith charts.
General Motors gained nearly 5% following news that nine key employees of its driverless-car business Cruise left after a review of the handling of an incident where a passenger was hit. GM is in a long double-bottom base with a 41.04 buy point.
Align, Arm, Caterpillar Jump; Cardinal's Wings Clipped
Dental device maker Align Technologies gapped up following news that Health Canada issued an updated medical device license for its Invisalign Palatal Expander System.
Recent initial public offering Arm Holdings popped in heavy trading and was extended above its buy zone of a 64.92 cup-with-handle buy point. Shares of the chip designer's stock hit a new high. The company was the IBD New America feature on Thursday.
Dow component Caterpillar jumped more than 4% and headed toward an eight-day winning streak. That's its longest streak since June 24, 2019, as recorded by Dow Jones Market Data.
Cardinal Health gapped down in heavy volume, on news that Wells Fargo initiated coverage on the stock with an underweight rating and a 96 price target. The health care services stock fell from its 52-week high reached Wednesday, but stopped short of crashing below its 50-day line.
Moderna Gaps Up On Skin Cancer Drug News
Moderna gapped up in heavy volume on news its skin cancer drug that it developed with Merck reduced the risk of relapse or death by 49% in melanoma patients.
MRNA reclaimed its 50-day moving average on the stock market. MRNA is on track for its largest one-day percentage increase since Dec. 13, 2022, when it soared by 19.63%, according to Dow Jones Market Data. Merck shares were down.
Adobe gapped down in huge volume. The company reported higher-than-expected fiscal fourth-quarter earnings and sales. But investors focused on its first-quarter and full-year sales and earnings outlook that came in below estimates. ADBE still managed to stop short of breaching its 50-day line.
Brazilian brokerage and IBD 50 member XP gapped up in heavy volume as financial stocks rallied on the interest rate news. Shares are in a consolidating base with a 27.71 buy point, but investors could have used an early handle entry at 24.56.
Stock Market Movers: Airline Shares Lift
Alaska Air Group dipped 0.2% on the stock market after the airline company raised its fourth-quarter capacity and revenue growth projection due to higher holiday travel demand. The airline stock is not in a base and is below its 200-day line.
Live Nation Entertainment jumped after Morgan Stanley upgraded the stock to overweight from equal weight and raised its price target to 110 from 100. Shares are in a consolidation with a 101.74 buy point.
Jabil gapped up in heavy trading following the company's mixed fiscal first-quarter earnings report. The stock retook its 50-day line in a consolidation with a 141.38 buy point.
Jabil's adjusted earnings grew over last year and exceeded expectations, while revenue topped views but fell vs. last year's quarter. The contract electronics manufacturing stock is expected to be added to the S&P 500 index on Monday.
Palantir Technologies eased to a 0.5% gain and reclaimed its 50-day line. Shares are trying to return to a buy zone with an entry at 20.24.
Costco Wholesale pulled back on the stock market after hitting an all-time high on Wednesday ahead of its earnings report after the close. Finally, Lennar surged to an all-time high ahead of its quarterly results, due late Thursday.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
