Stock market indexes pushed higher Monday afternoon and traded near the highs of the day. Norwegian Cruise Line surged into the 200-day moving average in heavy volume after earnings and broke out, at least for now. Dow Jones banking giant JPMorgan Chase was a white knight for First Republic Bank.
American Airlines advanced 2.2% despite news that over 99% of voting pilots were in favor of allowing a strike, if necessary, to secure a new contract. Shares rose above the 21-day exponential moving average.
The talks come ahead of the busy summer travel season. Federal law makes it difficult for airline unions to go on strike, according to a Dow Jones Newswires report.
Current issues include salary hikes and working conditions, as air traffic has skyrocketed since the pandemic. The Allied Pilots Association union represents 15,000 American Airlines pilots.
Competitor Delta Air Lines added 1.9%, while United Airlines jumped 1.8%.
Cruise Line Stocks Climb
Norwegian spiked 8% after a posting a smaller-than-expected Q1 loss on higher sales. Shares pushed above the 200-day line and held near highs into mid-afternoon. NCLH stock traded more than 100% average daily volume in the first 2-1/2 hours of Monday's session, a bullish sign. The company sees strong demand as it works off its massive Covid debt load.
Norwegian earnings are expected to soar 118% in 2024. NCLH stock is the biggest S&P gainer today.
Carnival surged higher in sympathy, gaining 3.5%.
The Dow Jones Industrial Average inched ahead 0.3% while the Nasdaq added 0.1%. The S&P 500 crept up 0.3%. The Russell 2000 was in line with the major indexes, gaining 0.2%.
The Nasdaq remained above the 12,000 psychological level. NYSE and Nasdaq volume fell compared with the same time on Friday.
The Nasdaq 100-tracking Invesco QQQ Trust ETF rose 0.2%, while the Innovator IBD 50 ETF added 0.5%.
Crude oil slid 2.5% to $74.89 per barrel. Gold futures slipped 0.4% and traded just below the $2,000 level.
Bitcoin sank 3.7% to $28,385. Cryptocurrency exchange Coinbase fell in sympathy with crypto, losing 6.9%.
European and most Asian markets were closed for the May Day holiday.
The April Institute of Supply Management (ISM) manufacturing index rose to 47.1 vs. the 46.8 consensus, and above March's 46.3 level. This is the sixth consecutive month below 50, signaling continued contraction in the manufacturing sector.
Economic Data On the Docket
The 10-year U.S. Treasury yield added 10 basis points to 3.56%. The CME FedWatch tool shows almost 90% odds for a quarter-point rate hike at the Fed meeting this week. The million dollar question is whether or not the Fed will pause rate hikes.
The Federal Open Market Committee (FOMC) starts its two-day meeting on Tuesday, with the rate hike decision slated for Wednesday 2 p.m. ET. Fed Chairman Jerome Powell has a news conference at 2:30 p.m. ET.
Look for the March JOLTS job openings survey and factory orders reports Tuesday, and the April ISM Services Index reading Wednesday.
Friday brings the April jobs report, with nonfarm payrolls expected to rise by 175,000 after March's 236,000 increase.
Stock Market Movers: JPMorgan Saves The Day
In the bank Panic of 1907, Mr. J.P. Morgan himself stepped in to help save the failing bank industry after the banks had massive withdrawals, as the public lost faith in the banking system.
In a move reminiscent of that rescue over 100 years ago, JPMorgan came in as the savior over the weekend.
First Republic Bank was seized by the FDIC and JPMorgan agreed to buy most assets, including all of the California-based bank's $92 billion in deposits. The bank will also acquire about $173 billion in loans and $30 billion in securities.
This marks the second-largest U.S. bank failure, surpassing Silicon Valley Bank and Signature Bank. Only Washington Mutual's collapse during the 2008 financial crisis was larger.
JPM rose 2.5% in heavier-than-average daily volume on the news, and it's the Dow leader today. The bank stock hit the 141.88 buy point of a cup-with-handle base and is in the 5% buy zone reaching to 148.97.
Aerospace Stock Hits Buy Point
Bel Fuse added another 1.7% on top of last week's 21.6% gain, following stronger-than-expected Q1 earnings and sales on Thursday. The electronic circuit maker's profit grew a hefty 268%, while sales increased 26% over the prior year's quarter.
Shares hit the 44.40 buy point of an undefined base earlier in the session, but pulled back below the entry point.
Analysts expect 15% full-year earnings growth this year, and a modest 1% next year. The relative strength line hit a new high, as shown by the blue dot on the charts.
Howmet Aerospace rose 1.2% and broke out of a cup base, hitting the 44.47 buy point. Shares of the aerospace and transportation firm are in the buy zone reaching to 46.69, according to MarketSmith pattern recognition.
Howmet reports Q1 earnings Tuesday before the bell.
Stock market pioneer General Electric jumped 2% and probed a five-year high. Shares have gained over 54% this year so far, and have been riding the 21-day line on the way up.
On Semi popped 7.2% after reporting better-than-expected Q1 earnings and sales. Management offered Q2 earnings and revenue guidance above analyst estimates.
"We continued our momentum with first quarter results exceeding expectations despite macroeconomic uncertainties," said Hassane El-Khoury, CEO of On Semi.
The automotive chip stock retook the 21-day exponential moving average on the jump.
Li Auto eased from early morning gains, up 0.4% after reporting a 516% year-over-year increase in April vehicle deliveries. Its 25,681 deliveries set a record and mark the second consecutive month over 20,000.
The move lifted the Chinese EV maker's stock above the 50- and 200-day lines.
Security software developer Check Point tanked 3.8% after reporting a beat on Q1 earnings but a miss on sales expectations.
Iveric Bio popped over 15% after Japanese firm Astellas Pharma agreed to buy the ophthalmology company for $40 per share.
Stock Market Movers: China Sees Huge Gaming Revenue
Wynn Resorts climbed 2.5% after the Macau Gaming Inspection and Coordination Bureau reported a 450% year-over-year rise in April gross revenues. It fell 68.1% in April 2022 as the Asian nation worked through Covid lockdowns. Rival Las Vegas Sands rose 1.7% on the news.
ExxonMobil fell 2.9% after Goldman Sachs downgraded the oil giant to neutral from a buy rating with a price target of 125.
Meanwhile, RBC cut its price target on XOM to 125 from 135 and maintained its outperform rating, while Morgan Stanley raised its price target to 122 and kept its overweight rating.
General Motors notched up 2% in heavy volume, after Morgan Stanley upgraded the auto manufacturer to overweight from equal weight and raised its price target to 38 from 35.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
