The Dow Jones Industrial Average fell 0.2% in late afternoon trading Thursday. The index continued to build support at the 50-day moving average but health leaders in the Dow lagged.
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On Thursday, House Speaker Kevin McCarthy said he sees the path to “come to an agreement” on the debt ceiling. Experts have stated that the U.S. could default as early as June 1 without a budget agreement. McCarthy sees the vote taking place as early as next week.
The S&P 500 eyed February’s high of 4195 as it rose 0.4%. The Nasdaq gained 1% and hit a high for the year to date.
Tech leaders Nvidia (NVDA), Lam Research (LRCX), Cadence (CDNS) and ASML (ASML) rose. Nvidia and ASML are IBD Leaderboard stocks while Lam and Cadence are IBD SwingTrader candidates.
Applied Materials (AMAT) rose with earnings due at the close. Shares broke out on Wednesday at 125.72.
Volume on the NYSE and on the Nasdaq was higher compared to the same time on Wednesday.
The small-cap Russell 2000 index fell 0.1%.
Crude oil continued its fall and traded at $71.80 per barrel. The yield on the benchmark 10-year Treasury note rose 5 basis points to 3.63%.
Fed governors weighed in on a possible rate hike in June.
Dallas Fed President Lori Logan says she does not find enough data to warrant pausing hikes yet. Cleveland Fed President Loretta Mester maintained her stance that the economy is not at a point where holding rates steady would be justified. The CME FedWatch Tool sees a 35.6% chance of a 25-basis point hike in June, taking the effective rate to 5.25% — 5.5%.
Dow Jones Leaders In Focus
Walmart (WMT) in the Dow Jones rose after same-store sales growth was better than expected. The company also raised its full-year earnings forecast to $6.10 to $6.20 per share. Shares are in a buy zone that goes up to 155.75, according to IBD MarketSmith chart analysis.
Tech leader Cisco Systems (CSCO) pared early losses and was flat despite strong earnings. Weaker orders in the fiscal third quarter raised concerns. Shares cleared the 200-day moving average late Thursday.
Outside Dow Jones, Alibaba (BABA) fell below converged 50- and 200-day lines after earnings disappointed. The Chinese e-commerce platform approved a spinoff of its cloud segment, Cloud Intelligence Group, through a stock dividend distribution to shareholders. Public listings of its logistics division, Cainiao Smart Logistics, and retail operations, Freshippo are also pending.
Take Two Software (TTWO) broke out at 137.53 after earnings. The video game publisher sees strong growth, with net bookings hitting $8 billion in fiscal 2025.
Also outside Dow Jones, Synopsys (SNPS) broke out from a flat base at 392.89 after earnings. The chip design software maker also raised its full year guidance.
Netflix (NFLX) broke out of a cup with handle at 349.90 after the streaming giant said its ad-supported platform grew to 5 million monthly users.
Software automation leader and options play on IBD Leaderboard Dynatrace (DT) broke out of a cup base at 48.10 after strong earnings on Wednesday.
Initial unemployment claims came in lower at 242,000 for the week ended May 13 versus the prior week’s 264,000.
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