Stocks gyrated, in search of direction Friday, as investors digested a disappointing September jobs report. IBD 50 stock Diamondback Energy rallied in its buy range, while Callon Petroleum moved closer to a buy point. Meanwhile, Home Depot weighed on the Dow Jones today, losing ground after an analyst downgrade.
The Nasdaq Composite and S&P 500 gave up opening gains and dipped a fraction, fighting to defend their advances for the week. The Dow Jones Industrial Average eased 0.2% lower on the stock market today.
Vaccine-maker Moderna led the Nasdaq 100 with a 1% gain, as it aims to stem a steep two-week slide. Baidu and Facebook were also near the top of the list. Fastenal slumped 2.6% to the bottom of the index, after Wells Fargo downgraded the stock to underweight.
Tesla reversed early losses and gained 0.3% after the company's annual shareholder meeting Thursday night. The company said it would announce third-quarter results on Oct. 20. Tesla stock remains in a buy range above a 764.55 buy point.
Quidel kicked up more than 6% to lead the S&P 500. Chief Executive Douglas Bryant said late yesterday the company had produced and shipped the largest number of SARS tests in the company's history during the third quarter, and it is on track this year to meet its target capacity of 70 million rapid antigen tests per month.
Quidel also announced preliminary third-quarter revenue that prompted a price target hike from JPMorgan to 80 from 70.
Oil stocks held eight of the 10 largest early advances on the S&P 500. Charter Communications fell 3.5% to the bottom of the index, following a Wells Fargo downgrade.
Dow Jones Today: Home Depot Downgraded
Chevron reclaimed the lead on the Dow Jones today, rising 1% as oil prices climbed.
Home Depot dragged on the early action, down 1% after Loop Capital downgraded the stock to hold, from buy. The note also cut the brokerage's price target on Home Depot stock to 325, from 370.
Home Depot scored a 2.2% gain on Thursday, moving to just below a 338.65 buy point in what IBD MarketSmith analysis identifies on a daily chart as a flat base. The pullback below that buy point stopped short of triggering the automatic sell rule.
Hiring Tanks In September; Debt Ceiling Raised
The Labor Department reported total nonfarm payrolls increased by 194,000 in September, down 17% from August and far below economist projections for 475,000 new jobs. That marks a second month of sharp deceleration. However, the unemployment rate declined 0.4%, to 4.8% for the month.
Markets received an early lift, after the Senate voted Thursday night to raise the debt limit into early December, with Democrats agreeing to Senate Minority Leader Mitch McConnell's offer for a short-term debt hike. To head off a government default, the House must approve the measure before President Joe Biden signs it.
Overseas Markets
China's markets closed out the week on a positive note. Hong Kong's Hang Seng Index gained 0.6%, leaving the week 1.1% higher after Tuesday's drop to a 12-month low. The Shanghai Composite rallied 0.7% to end its holiday-shortened week with a 0.7% advance.
In Japan, Tokyo's Nikkei 225 jumped 1.3%, riding a boost from the U.S. debt-ceiling agreement.
Europe's markets were mixed near midday, with the CAC-40 in Paris down 0.4% and Frankfurt's DAX off 0.2%. The FTSE 100 in London clung to a 0.1% advance.
Vital Signs: Oil, Bond Yields, Bitcoin
Oil prices reversed early losses and gained more than 1% on Thursday, with West Texas Intermediate crude settling above $78 a barrel. WTI futures gained 0.9% early Thursday, approaching Wednesday's 7-year high.
When To Sell Growth Stocks: This Could Be Your No. 1 Rule
Bond yields edged higher ahead of the jobs report, with the 10-year yield up one basis point to 1.58%. The yield jumped nearly 5 basis points Thursday to 1.57%.
Bitcoin gained almost 3%, trading above $55,400. The cryptocurrency is up nearly 17% for the week and has swung as high as $56,078 and as low as $53,436 over the last 24-hours, according to CoinDesk.
IBD 50 Stocks: Callon's Buy Point, Stifel's Buy Range
On the IBD 50 list, Callon Petroleum jumped 1.4%, aiming to extend its four-week rally. Shares have carved a 58% deep cup base with a buy point at 60.59. The stock closed about 7% below that entry on Thursday.
Western Alliance Bancorp, Diamondback Energy, Stifel Financial and CarGurus were all in buy ranges after topping buy points in the past week.
InMode, SiTime, Old Dominion, CBRE Group are executing, or are in position for, possible rebounds from 10-week support. Old Dominion is the focus of this week's Big Cap 20 column.
Nasdaq, S&P 500, Dow Jones Today
The Dow Jones today looks to close out what has been a strong rebound week, with the index running 1.3% higher through Thursday.
The advance powered past short-term levels of support, but petered out at the underside of the Dow's 50-day moving average. It is the Dow's third failure since September to retake that level of support, marking a clear line of resistance.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The S&P 500 has a 1% gain through Thursday, also retaking short-term support and retreating after not quite reaching its 50-day line. The Nasdaq Composite has a 0.6% advance so far for the week. In terms of short-term support, it has regained its 10-day line, but remains below its 21-day line. It closed Thursday 1.5% below its 50-day line.
Those charts clearly support a "market in correction" status. The market's attempt to launch a new uptrend remains active, with the Nasdaq and S&P 500 holding firmly above lows charted out on Monday. A follow-through day could occur now at any point and confirm a new uptrend. But, for now, the market has provided no clear signals as to whether it is due for more consolidation or a shift into a new uptrend.
At this moment, investors should build watchlists of stocks near valid buy points, in order to be ready with actionable targets when the market does make its move.
Please follow Alan R. Elliott on Twitter @IBD_Aelliott
