Earnings news and a bullish outlook in cloud computing and social networking gave stocks a boost Thursday. The Nasdaq led the advance while other key indexes tagged along for smaller gains, but all succumbed to some profit-taking by session's end. Microsoft plowed ahead by more than 7% on its third-quarter report, retaking its 200-day moving average on the stock market today.
The Nasdaq composite lost a chunk of its afternoon advance, yet still rose 1.5% to finish at 17,710. At one point, the leading index for growth stocks jumped nearly 3%. It hit a session high of 17,922, but that was still 11% below its all-time peak of 20,204. Further, at that session high, the Nasdaq still was 7% lower for the year.
Nonetheless, the key benchmark continued to gain traction following its Day 11 follow-through registered on April 22. Since that session's close, the Nasdaq has surged 9.9%.
Within the Nasdaq exchange, winners bested losers by a margin of roughly 5-to-4 on the stock market today. Breadth was also better earlier in the session.
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Nasdaq-100 Slightly Lags The Composite
The Nasdaq-100 rose 1.1% as nearly all Magnificent Seven firms advanced. Among other large caps, the S&P 500 added 0.6%, down from its peak of a 1.6% gain earlier in the session. The 500 has gained 6% since its April 22 follow-through day.
The Dow Jones Industrial Average rose just 0.2%, lagging both the other major indexes. Leading components hailed from the tech, finance and industrial areas of the market.
One example: Dow Jones stock Caterpillar added more than four points for a fourth straight gain, yet at 313.96, the construction and mining equipment titan is still plodding beneath its falling 50-day moving average. That's a sign of technical weakness.
Moreover, Caterpillar holds a feeble 26 Relative Strength Rating on a scale of 1 to 99. Over the past 12 months, it has performed better than only 26% of the stocks in Investor's Business Daily's database. Investors should seek growth stocks with at least a 90 RS Rating or higher.
Small caps rose, with the Russell 2000 regaining momentum and rising 0.6%. At 1,975, the Russell still sits nearly 20% below its all-time high of 2,466.
3:17 p.m. ET
Growth Beats Value As Market Shifts
Growth stocks outperformed value peers. One example is iShares S&P 500 Growth. The exchange traded fund gapped up at the market open and held a 2.1% gain. Within a span of four weeks, it has moved close to retaking its 200-day line.
But iShares S&P 500 Value added just 0.8%. It needs to gain another 4.2% just to test upside resistance at the key long-term moving average.
Looking at IBD's 197 industry groups, the fiber-optic telecom group led with a price-weighted gain of 7.2%. These industries also paced the day's gains, rising 4% or more each: Oil and gas machinery, specialty steel and alloy, heavy construction, building maintenance and desktop software. There also was oil drilling, oilfield services, telecom infrastructure and alternative energy stocks.
Please go to IBD Data Tables within the Stock Lists section of Investors.com to view the daily performance of all 197 industry groups. In general, the top 40 industry groups in terms of six-month relative price performance tend to house leading growth stocks with the stock market today now in a confirmed uptrend.
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Stock Market Today: Sprouts, Virtu Move Higher
Among individual stocks, Sprouts Farmers Market acted well after delivering rosy results. It's working on a new base, which could usher in a profit-making breakout.
Sprouts, which posted 11% same-store sales growth in the first quarter, ranks highly within the IBD 50.
Also, Virtu Financial, a specialist in the financial services and securities trading industries, barreled ahead by 2.6% and closed in on a 40.41 proper buy point in a double-bottom base.
Virtu attempted a breakout last week but sellers shot down the stock. It soon triggered the 7% loss sell rule — also known as IBD's golden rule of investing — from the 40.41 entry, highlighting recent volatility in the stock market today.
Virtu is a midcap growth stock with a terrific 98 Composite Rating on a scale of 1 to 99 and a $6.2 billion market value.
1:02 p.m. ET
Stock Market Today: Microsoft Earnings Jump
In stocks, Microsoft was up nearly 11% at one point as the software giant delivered an 18% jump in earnings to $3.46 a share. Revenue accelerated slightly, up 13% to $70.1 billion on the back of solid Azure cloud-computing sales. Microsoft's move back above the 200-day line is a key step in starting a potential new breakout.
Meta Platforms, meanwhile, faded from early-morning highs yet still managed a gain of nearly 5% midday. Shares hit their head hard at the falling 50-day moving average, but failed to crack it — a serious concern from a chart perspective.
Meta delivered a strong top- and bottom-line beat for the first quarter. (Please read this IBD tech story on Meta Platforms for details.)
Elsewhere, gold mining and other "safe-haven" stocks underperformed. Market leader Alamos Gold got trampled by sellers amid a 3% sell-off in underlying gold futures. Shares sliced through the 10-week moving average in heavy volume, marking a key IBD sell signal.
In the MarketSurge Growth 250, chicken and turkey purveyor Pilgrim's Pride plummeted by nearly 15% in volume running 525% above its 50-day average. The meat products giant undercut both its 50- and 200-day lines, a sudden sign of pronounced stock weakness.
11:09 a.m. ET
JPMorgan Chase Climbs, But Beware
Dow Jones component JPMorgan Chase ticked higher and the SPDR S&P Bank exchange traded fund floated 1% higher. However, the SPDR fund still lies significantly below its falling 50-day line and 200-day moving average. That's bearish for now.
The first trading day of May has so far marked the seventh straight day of gains since a pivotal follow-through day took place on the S&P 500 on April 22. That's also reflected in increased hunger for equities by the institutional crowd. A lack of distribution days since that April 22 confirmation of a new tradable rally serves as a bullish sign.
Stock Market Today: Jobless Claims Surge, Treasuries Flat
U.S. jobless claims increased more than expected. Weekly jobless claims of 241,000 sailed well above the Econoday forecast of 221,000 and above the four-week moving average of 226,000.
Rising claims followed a limp ADP private sector payrolls report Wednesday. On Friday, investors will focus on the April nonfarm payrolls data, with projections pointing to a slowing expansion of the labor market in America. Economists expect just 130,000 net new jobs added in the U.S. in April, down from March's 228,000 job gains.
The yield on the key U.S. Treasury 10-year bond was virtually flat at 4.18%. Earlier, the yield fell six basis points to 4.12%, marking the lowest level since April 7 on an intraday basis. Treasury debt prices rose for a time as a result.
Meanwhile, light, sweet crude oil futures on the Nymex rebounded 1.2% to $58.93 a barrel after hobbling lower in recent days. Natural gas futures rose 1.6% to $3.36 per million BTUs, while gold futures slumped 2.5% to a still lofty $3,235 per ounce.
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Breakouts And Fades: Aerospace And Software
Meanwhile, investors deployed capital in the aerospace realm.
OSI Systems, part of IBD's aerospace/defense industry group, rallied 8% and briefly pricked a 220 buy point in a sloppy 10-week cup-style base. It hit a session high of 225.21, then faded below the entry. OSI reported adjusted fiscal third-quarter earnings of $2.44 a share, up 13% vs. a year earlier, on a 10% revenue increase to $444.4 million.
Among newer issues, enterprise software firm ServiceTitan, which offers operations software for skilled trades such as construction and plumbing, dropped for a fifth-straight day. Down 1.7% at 113.61, the stock still remains extended beyond the 5% buy zone from a double-bottom entry point of 106.99.
ServiceTitan debuted on the Nasdaq in December at $71 a share.
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