September 27, 2022

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Business&Finance Specialists

Dow Jones Pares Early Gain After Hitting New High; Tech Stocks, Small-Caps Lead Upside

4 min read

The Dow Jones Industrial Average pared early gains in today’s stock market after notching another record high of 36,679.44 in early trading. The Nasdaq and the small-cap Russell 2000 held their morning gains and led the market.




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Stock Market Today

At around 12 p.m. ET, the Dow Jones industrials were trading near breakeven. The Nasdaq composite held a gain of 0.6%, while the S&P 500 was up 0.2% after hitting a new high of 4,808.93. Meanwhile, the Russell 2000 small-cap index traded up 0.9%. Data showed volume was running lower on the Nasdaq and higher on the NYSE vs. the same time on Wednesday.

Bullish jobless claims data boosted stocks initially on Thursday. First-time unemployment claims fell to 198,000 during the week ended Dec. 25, the Labor Department said early Thursday. That was down from the prior week’s 205,000 and below Econoday’s forecast for 205,000 initial claims.

Among the S&P sectors, real estate and communication led the upside with modest gains of over 0.4% each. On the downside, the consumer staples and materials sectors fell slightly, around 0.2% each.

Industry groups leading the upside among IBD’s 197 groups included several medical-related groups such as medical services and the biomed/biotech groups. On the downside, coal energy and trucking stocks fell close to 1% each.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 36511.95 +23.32 +0.06
S&P 500 (0S&P5) 4802.16 +9.10 +0.19
Nasdaq (0NDQC ) 15865.45 +99.23 +0.63
Russell 2000 (IWM) 225.09 +2.10 +0.94
IBD 50 (FFTY) 46.07 +0.03 +0.07
Last Update: 12:06 PM ET 12/30/2021

The Innovator IBD 50 ETF (FFTY) also lagged the major indexes, falling 0.2% in morning trading. The index is struggling to reclaim its 200-day line after finding support at the 21-day exponential moving average.

The market has been rising but in light volume in recent days, which suggests the buying isn’t necessarily supported by major institutions. However, holiday season trading often slows, and the Dow Jones and S&P 500 did hit record highs early Thursday, as the blue chip index holds above the 36,000 level — an area of prior resistance.

IBD’s market outlook remains in a confirmed uptrend. With a handful of stocks showing improved relative strength and promising setups, investors may consider adding exposure to stocks that are performing well. But do so cautiously and remember that volatility remains high. Additionally, the market advance is showing signs of slowing after mild gains this week.

Dow Jones Today

In the Dow Jones today, stocks leading the upside included Salesforce.com (CRM) and Disney (DIS), rising nearly 1% each. Salesforce.com has gained support at the 200-day line after a failed breakout from a cup-with-handle 275.32 entry back in September. Shares are attempting to reclaim their 21-day line as well.

Disney shares remain beaten down, with a low Relative Strength Rating of 24 out of a best-possible 99. The stock is back above its 21-day line however, and is seeking to reclaim support at its 50-day line, both of which have crossed below the longer-term 200-day line.

On the downside, Cisco Systems (CSCO) and Procter & Gamble (PG) led with losses of over 0.5% each. Meanwhile, major Dow Jones tech leaders such Apple (AAPL) and Microsoft (MSFT) traded near breakeven.

Apple remains close to a 20% profit zone from a 153.26 cup-with-handle buy point. Shares initially broke out Nov. 17 and have floated higher above their 21-day line since then. This is a key sign of strength. Elsewhere, Microsoft is holding above its 10-week moving average as it forms a flat base.

Stocks Making Notable Moves

On Thursday, a few top stocks in the MarketSmith Growth 250 index scored breakouts, including plastics chemicals stock Eastman Chemical (EMN), which broke out from a 121.30 saucer-with-handle buy point. The pattern can be spotted on a weekly chart. The stock has also moved above a three-weeks-tight entry.

Eastman Chemical is the latest among a slew of chemicals stocks breaking out in recent weeks. Other recent breakouts from the agricultural and specialty chemicals groups include Valvoline (VVV) and Nutrien (NTR).

Elsewhere, stocks leading the upside in the IBD 50 included MP Materials (MP) and Zim Integrated Shipping Services (ZIM), which gained over 3.5% and 2%, respectively.

Rare earth miner MP Materials gained almost 4% as shares remain extended from a 40.78 cup-base entry. The stock reached the 20% profit-taking goal on Dec. 9 and 10, before falling back to the buy point. Shares have since gained support at the 10-week line.

Zim Integrated Shipping Services gained 2% in heavy volume on Thursday as shares once again rose above a 57.07 buy point of a cup with handle. The stock already failed its first breakout attempt above this area.

Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.

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Dow Jones Pares Early Gain After Hitting New High; Tech Stocks, Small-Caps Lead Upside