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Friday, October 22, 2021

Dow Jones Jumps 530 Points As Stock Market Rallies On Strong Earnings, Jobs Data

Stocks extended their gains Thursday afternoon as the Dow Jones Industrial Average soared over 500 points to retake its 50-day moving average.




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The Nasdaq vaulted 1.7%, the S&P 500 rallied 1.7% and the Dow Jones industrials rose 1.6% in the stock market today. Small caps tracked by the Russell 2000 gained 1.5%. Volume was mixed, lower on the NYSE but higher on the Nasdaq, vs. the same time Wednesday.

Among exchange traded funds, Innovator IBD 50 (FFTY) rallied 1.5%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) advanced 1.3%. The IBD 50 ETF popped back above its 50-day moving average, after spending the past two weeks below the line.

Early Thursday, the Labor Department reported initial jobless claims fell to 293,000 the week ended Oct. 9. That was an 11% drop from the prior week’s revised 329,000 claims and came in below Econoday forecasts for 320,000 claims. It also marked the lowest number of new filings since March 2020, as states began to shut down.

The U.S. economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. A resurgence in cases fueled by the more contagious delta variant has recently started to slow down as vaccinations rise.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34913.37 +535.56 +1.56
S&P 500 (0S&P5) 4438.22 +74.42 +1.71
Nasdaq (0NDQC ) 14822.88 +251.24 +1.72
Russell 2000 (IWM) 225.82 +3.25 +1.46
IBD 50 (FFTY) 48.59 +0.72 +1.50
Last Update: 2:56 PM ET 10/14/2021

Cumulative Covid-19 cases worldwide have topped 240 million, with nearly 4.9 million deaths, according to Worldometer. In the U.S., cases are approaching 46 million with almost 740,000 deaths.

Growth Stocks To Watch

Security software maker Okta (OKTA) rallied nearly 4% to gap back above its 50-day moving average, according to MarketSmith chart analysis. It’s still forming a long consolidation.

Taiwan Semiconductor (TSM) rose 2.4% after the world’s biggest chip foundry’s Q3 earnings beat Wall Street targets. It also raised guidance for the current quarter. The stock is looking to snap a five-week decline.

That gave chip stocks a boost, as ASML Holdings (ASML), Applied Materials (AMAT), KLA (KLAC) and Lam Research (LRCX) also made big moves. The VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) rallied 2.8% each.

Over in the IBD 50, Upstart (UPST) surged 8% in above-average trade to a new high. It’s already extended after passing a 346.64 buy point of a high, tight flag (on a weekly chart). This rare pattern can lead to big gains. Upstart was added to IBD Leaderboard early Thursday.

TaskUs (TASK) rose 5% in fast turnover, on track to extend its win streak to three days after finding support at the 50-day moving average. The digital outsourcing company leads the 47-stock computer tech services group with a highest possible 99 Composite Rating. A 98 Earnings Per Share Rating is second best in the group.

Among other IBD 50 winners, Dutch Bros. (BROS), SiTime (STME) and Generac (GNRC) rose more than 3% each.

Dutch Bros., up 4.5%, is shaping the right side of a base with a 62.10 buy point. It’s about 14% below the entry. The drive-thru coffee chain came public Sept. 16, after pricing its IPO at $23 per share, above an expected price range of $18-$20. Dutch Bros. offered 21,052,632 shares, raising more than $484 million.

Dow Jones Movers

Walgreens (WBA), up 9% in heavy volume, led the Dow after reversing from an early dive. The drugstore giant reported fiscal Q4 earnings and revenue that beat views. U.S. sales rose 6.6% to $28.8 billion. International sales soared 62%, to $5.5 billion. Walgreens stock surged back above its 10-week and 40-week lines. It’s about 10% below a 57.15 buy point of a six-month-old consolidation.

UnitedHealth (UNH) gained more than 4% to gap back above its 50-day line for the first time since mid-September. The managed care giant delivered better-than-expected Q3 results on both the top and bottom lines. It also nudged its full-year earnings guidance higher. At the open, the stock rose above a 431.46 buy point of a flat base but pared gains.

Caterpillar (CAT), Dow Inc. (DOW) and Intel (INTC) added about 3% each.

Microsoft (MSFT) advanced nearly 2% after the software giant said it will close its LinkedIn site in China amid stricter internet censorship in the communist country. It will instead launch later this year a new China-specific website called InJobs, a job-searching tool stripped of LinkedIn’s social media features.

Microsoft, the IBD Stock of the Day, is close to a 305.94 buy point of a flat base.

Only two Dow Jones stocks sat out the rally: Boeing (BA), down 1.3%, and Merck (MRK), off 0.5%. Boeing stock is now trading below both its 50-day and 200-day lines as the jet maker faces new production problems.

In the latest issue for the 787, some titanium parts on Dreamliners built over the last three years are weaker than they should be, sources told the Wall Street Journal. That’s just the latest in a string of problems for the widebody jet.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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