Stocks sputtered out of the starting gate Thursday, threatening to snuff the market’s two-day rally after an unexpected uptick in unemployment claims. Earnings fueled some dramatic premarket action, as railroads CSX and Union Pacific rallied and Crocs spiked. Floor & Decor and Bill.com advanced in buy ranges. On the Dow Jones today, Salesforce.com rose to an early lead.
The Nasdaq Composite struggled to a 0.2% gain. The Dow dumped 0.2%, while the S&P 500 wrestled with a fractional loss. Small caps lagged the overall market action, with the Russell 2000 slumping 0.8% in early trade.
Chip stocks were particularly weak, with Texas Instruments (TXN) down 4.5% to the bottom of both the Nasdaq 100 and S&P 500 — despite a healthy second-quarter beat, and robust third-quarter guidance. Chip stocks held the six worst early declines among Nasdaq 100 stocks.
Shares of Uber (UBER) edged higher after announcing its Uber Freight unit would pay $2.5 billion to acquire Transplace from private investment firm TPG Capital. Transplace is a transportation management and logistics software developer.
Wednesday Stock of The Day Floor & Decor (FND) starts the day in a buy zone, above a cup-with-handle base buy point at 109.95. The same is true for IBD 50 Stock To Watch Bill.com (BILL), which is less than 5% above a cup-with-handle buy point at 192.99. Both stocks gained more than 1% at the starting bell.
Dow Jones Today: Dow Earnings, Microsoft Target Hike
Specialty chemicals maker Dow (DOW) reversed early gains and dropped 2.4% on the Dow Jones today, despite second-quarter revenue and earnings that easily rolled past analyst targets. Chief Executive Jim Fitterling projected “earnings momentum from additional improvements in consumer spending, international travel and industrial production,” and as the economic recovery broadens around the world.
Salesforce.com (CRM) led among blue chips, up 1.6% shortly after the start of trade. The software heavyweight closed its $27.7 billion acquisition of Slack on Wednesday. Salesforce stock is rebounding from a test of support at its 10-week moving average, after a breakout faltered early this month.
Microsoft (MSFT) climbed 0.8%, as Citi raised the stock’s price target to 378, from 310. The new target comes ahead of the company’s fiscal fourth-quarter report, due on Tuesday. The IBD Leaderboard listing is extended after clearing a cup base in June.
Jobless Claims Rise, Chicago Fed Index Weakens
First-time claims for unemployment assistance rose to 419,000 in the week ended July 17, the Labor Department reported. That was a 16% jump from the prior week, and well above projections for a decline to 350,000 claims.
The Chicago Federal Reserve’s National Activity Index slumped to a reading of 0.9 for June, down from 0.29 in May and below expectations for an increase to 0.30. Two of the index’s three categories of economic indicators deteriorated during the month.
June existing home sales from the National Association of Realtors, and the Conference Board’s leading economic indicators, are set for release at 10 a.m. ET.
Earnings News: Crocs, OneMain, Chart Industries
In earnings news, First Energy (FE) jumped 4% and Resources Connection (RGP) surged almost 14%. Meanwhile, NetGear (NTGR), Texas Instruments (TXN) and D.R. Horton (DHI) were taking hard hits following their quarterly results.
Consumer lender OneMain Holdings (OMF) cut its premarket surge to 0.4% following a big earnings beat. The stock briefly peeked above a buy point in a brief consolidation. OneMain holds a best-possible Composite Rating of 99 from IBD.
Energy equipment manufacturer Chart Industries (GTLS) rose 1% after scoring a narrow second-quarter earnings beat and raising guidance. The stock finished Wednesday 6% below a 167.49 buy point in a 12-week cup base.
Global Stock Markets
Lights were green across worldwide markets Thursday. Hong Kong’s Hang Seng Index jumped 1.8%, snapping a three-day slide even as widespread floods killed at least 25 and displaced an estimated 1.2 million persons in central China. In Japan, markets are closed Thursday and Friday.