The Dow Jones Industrial Average closed the week marginally higher after President Joe Biden touted his economic record Friday. The Nasdaq also rose, though it closed well off session highs. Salesforce.com (CRM) was the top blue chip amid strong earnings, while Microsoft (MSFT) saw gains fade.
Meanwhile, meme stock AMC Entertainment (AMC) ended up closing lower after a wild session of trading. Beyond Meat (BYND) rose however. Finally, a number of stocks passed buy points, including Idexx Laboratories (IDXX) and AppLovin (APP)
Biden Makes Economy Boast
President Biden boasted about his economic record, even as a new inflation gauge came in higher than expected.
“The bottom line is this: The Biden economic plan is working,” he said during a speech at Cuyahoga Community College in Ohio. “We’ve had record job creation, we’re seeing record economic growth, we’re creating a new paradigm. One that rewards work — the working people in this nation, not just those at the top.”
His statement comes despite business groups blaming enhanced federal unemployment benefits in his American Rescue Plan for causing a labor shortage.
The spending looks set to continue after President Biden unveiled his $6 trillion federal budget for fiscal 2022 Friday. It is expected to carry big tax increases and deficit spending.
Meanwhile the Commerce Department’s core Personal Consumption Expenditures price index for April rose 3.1% year over year. This was above economists consensus expectation for a 3% increase, and the biggest rise since the 1990s.
On a monthly basis, the core PCE Index rose 0.7%, in line with economists projections. The core PCE price index measures the prices paid by consumers for goods and services, excluding food and energy prices.
While it was way above the Fed’s objective of 2%, Oanda senior market analyst Edward Moya said the “transitory thesis remains intact,” which is why Treasury yields “refuse to take off.”
Nasdaq, S&P 500 Rise
The tech-heavy Nasdaq had been outperforming the other major indexes, but lost out to the Dow Jones after closing up 0.1%. Its weekly gain came in at just over 2% however. Pinduoduo (PDD) was one of the star names, rising by 4.4%. However the top performer was Leaderboard stock Nvidia (NVDA), which gained 4.9%.
U.S. Stock Market Today Overview
Last Update: 4:08 PM ET 5/28/2021
The S&P 500 also rose by a slender 0.1%. This was its fourth straight positive month, and it sits just off its record high. Ulta Beauty (ULTA) was one of the standouts, rising by more than 5%.
The S&P sectors were mostly positive, with technology posting the biggest gains. Materials was the biggest laggard.
The small caps sector saw its spell of outperformance come to an end, though the Russell 2000 closing the day flat. Growth stocks were struggling even more, with the Innovator IBD 50 ETF (FFTY) falling 0.6%.
Salesforce Stock Leads Dow Jones Higher
The Dow Jones Industrial Average traded almost in lockstep with the S&P 500, gaining around 0.2%. It was up 1.1% for the week, and remains clear of the 50-day moving average.
Salesforce.com was the top performing component, gaining 5.4. The stock gapped through its 200-day moving average, but is well short of a consolidation buy point of 271.01, MarketSmith analysis shows.
Salesforce stock was boosted after it beat on the top and bottom lines. The firm also raised its full-year outlook.
Microsoft closed off well off highs as it saw gains melt away. It closed up 0.2%. The Leaderboard stock is in a buy zone from a 246 entry.
AMC Stock In Wild Session
AMC stock was trading wildly, at one point gaining more than 38%. However, the cinema stock closed 1.4% lower in a high-volume session.
AMC stock closed up almost 120% for the week, despite its poor earnings track record. In contrast, its stellar stock market performance is reflected in its spiking relative strength line, and its perfect RS Rating of 99.
It is one of the stocks partaking in a so-called meme stocks rally. Beyond Meat was also trading higher, gaining around 2%. The most infamous meme stock of all, GameStop (GME), closing down almost 13%.
The exact identities of the traders pushing prices higher is not clear. But the Reddit board WallStreetBets has largely been credited with launching an effort to upend short sellers who had bet those stocks would fall.
Market Rally Gains Steam; Four Stocks In Buy Zones
These Stocks Pass Buy Points
Idexx Laboratories closed just under a buy zone after breaking out of a cup-with-handle base, MarketSmith analysis shows. The ideal buy point was 561.62. The RS line is showing signs of progress.
The veterinarian diagnostics stock has been improving as pet adoptions rebound. In the first quarter, Idexx reported 12% growth in clinic visits for pets. New patients accounted for 3% of that growth.
This suggests “the impact of recent pet adoptions is still working through the system,” J.P. Morgan analyst Chris Schott said in his note to clients.
New issue AppLovin closed in a buy zone passing an IPO base buy point of 71.61. Its RS line also hit a new high.
The stock was cut from the Leaderboard watchlist after failing to move back above its initial offering price of 80.
AppLovin offers a platform that helps developers market and monetize their apps.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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