Stocks jumped into April's first full trading week on Monday, boosted by a strong March payrolls report delivered during Friday's holiday. Airlines, casinos and semiconductors all drove early gains. Tesla led rallying electric-vehicle makers after topping first-quarter delivery targets. Boeing climbed in a buy range on the Dow Jones today.
XThe Dow industrials briefly plowed 300 points higher, up 0.8% to snatch a new record high. The S&P 500 rallied 0.9% on the stock market today, sending it to its own fresh record above 4,000. The Nasdaq Composite notched a 1.1% jump, giving it a bit more breathing room above its 50-day moving average.
Tesla (TSLA) was a big early mover, up nearly 5% after reporting on Friday its deliveries easily outpaced expectations in the first quarter. Tesla stock is attempting to start up the right side of a three-month consolidation, but is wrestling resistance at its 21-day exponential moving average.
Other electric auto makers turned mixed in early trade, with Ford Motor (F) up 1.9% after delivering more than 6,600 Mach-E Mustangs during the quarter. IBD Leaderboard stock General Motors (GM) gained 2.9% in early trade. Among China-based EV makers, Nio (NIO) added 0.5%, while Xpeng (XPEV) dropped 1.2%. Li Auto (LI) also reversed lower, trading down 0.3%.
Caesars Entertainment (CZR) jumped 4.3%, while MGM Resorts International (MGM) rallied 6.5% after Morgan Stanley upgraded both stocks to overweight. Airlines also showed early strength, with United Airlines Holdings (UAL) and American Airlines Group (AAL) each up around 4%.
Steelmaker Cleveland Cliffs (CLF) popped 3.8% in early trade. The IBD 50 stock ended Thursday in a buy range, after breaking out above an 18.87 buy point in an 11-week cup base on Wednesday.
Payrolls Report Blows Past Target
Data released by the Labor Department on the Good Friday holiday showed an increase of 916,000 jobs in March, and strong upward revisions to January and February numbers. The combination sent the unemployment rate to 6.0%, and boosted the 'risk-on' mood shown by investors late last week.
The 6% unemployment rate met expectations, but the 916,000 tally came in well above projections for a 625,000 worker increase. Nonfarm payroll employment remains down 8.4 million from February 2020's peak of 152.5 million.
Boeing In Buy Range On Dow Jones Today
Boeing (BA) swung 2.1% higher to lead the Dow Jones today. The IBD Leaderboard stock cleared a cup-base buy point at 244.18 in early March, then pulled back to retest that entry, as well as support at its 21-day exponential moving average.
The rebound from 21-day support leaves Boeing stock low in a buy range, which extends to 256.39.
Microsoft (MSFT), the other Dow Jones stock on the Leaderboard list, traded 0.6% higher early Monday. That moved the heavyweight software developer and cloud services provider to less than 1% below a 246.23 buy point in a six-week flat base.
Taiwan Semiconductor Reverses, Chip Stocks Rise
Taiwan Semiconductor (TSM) led the Leaderboard list in premarket trade, but opened down 0.1%. The stock stemmed a five-week pullback last week, posting a big gain on Thursday after announcing a $100 billion plan to expand Taiwan Semi's manufacturing capacity over the next three years.
The news lifted chip stocks in general, with chip-equipment makers receiving the biggest boost. Applied Materials (AMAT) and Lam Research (LRCX) traded high on the Nasdaq 100 early Monday, up 1.1% and 1.3%, respectively.
The iShares PHLX Semiconductor (SOXX) climbed 0.9%, and the VanEck Vectors Semiconductor ETF (SMH) added 0.6% in early trade. Both ETFs are just below buy points in base patterns. The PHLX fund's buy point is at 444.07. The VanEck fund's buy point is 258.69.
Oil, Copper, Bonds, Bitcoin
Oil prices took a steep drop, with West Texas Intermediate down more than 2%, but holding above $60 a barrel. Copper jumped higher, gaining 2.8% to trade above $4.10 a pound. Copper struck a 10-year high at $4.30 in February.
Bonds were effectively flat, with the 10-year yield up 1 basis point to 1.73%. Yields have staged a rapid recovery from record lows of around 0.50% in August. They skirted pre-pandemic levels last week, climbing above 1.76% — the highest level since January 2020. Yields had started 2020 at around 1.8%, which was down from about 2.7% a year earlier.
Stock Market ETF Strategy And How To Invest In The Current Uptrend
Markets in Hong Kong remain closed Monday and Tuesday, and planned to restart Wednesday. Stock exchanges in Shanghai, London, Frankfurt and Paris reopen on Tuesday.
Bitcoin eased slightly early Monday, trading down 0.3% and jus below $58,000, according to CoinDesk. The cryptocurrency climbed to a record high at $61,556 on March 13.
Biotechs Lead Early Small Cap Rally
Small capos ran strong in early trade, with the Russell 2000 up 1%. Biotech and pharma helped to drive the early gains among small-caps. Russell 2000 stock Invitae (NVTA) vaulted 8% higher after the company announced a $200-million acquisition. In addition, Japan's SoftBank Group (SFTBY) is taking a $1.1 billion piece of the company, in the form of convertible senior debt. SoftBank shares soared more than 5%.
Also on the Russell 2000, Supernus Pharmaceuticals (SUPN) leapt 8.2% and Pacific Biosciences (PACB) climbed 5.7%.
The VanEck Vectors Biotech ETF (BBH) lagged the general market with a 0.3% advance.
Nano-X Imaging (NNOX) spiked 35% in opening trade, after announcing on Friday its single-source Nanox.ARC digital X-Ray technology received 510(k) clearance from the U.S. Food and Drug Administration. The Israel-based company's Nanox.ARC technology emits less radiation than traditional X-Ray techniques.
The August new issue ended Thursday 130% above its August initial offering price, and down 56% from its January high.
Dow Jones Today: A Strong First Quarter
Healthy advances on Wednesday and Thursday hoisted the Nasdaq back above its 50-day moving average, as well as its 21-day exponential moving average. The S&P 500 is sitting at a new high and above the 4,000 level.
Meanwhile, the Dow Jones today sits just below its week-ago high after three days of flattish trade. For the first quarter and year-to-date, the Dow climbed 11.3%, almost double the S&P 500's 5.8% advance. The Nasdaq rose 2.7%.
Almost 7% of the Dow's rise occurred in March. The S&P 500 gained 4.4% for the month, while the Nasdaq eked out a 0.4% gain. That sealed a third month of unusually tight monthly closes for the Nasdaq.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Strong gains on Wednesday and Thursday sent bullish follow-through signals, and the market's status is back on track in a confirmed uptrend. But the tight monthly closes for the Nasdaq are important to note. They show institutional investors idling, possibly waiting to see how rising Treasury yields play out, or maybe waiting for the Biden administration to prove it can advance budget and policy initiatives in a tightly divided Senate.
For now, the Nasdaq's hold on support above its 50-day line is tentative, and the 13,600 level could present additional resistance. Another day or two of gains would give the uptrend some margin to bank on, and possibly narrow the gap between the Nasdaq, the S&P 500 and the Dow industrials. The Nasdaq will then once again face the 14,000 mark, which it broke briefly above in February before turning lower.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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