A robust U.S. retail sales report for July boosted investor confidence, and buyers came in full force during the opening hour of the stock market today. Meta Platforms (META) and Microsoft (MSFT) represented continued leadership and presented new buy points.
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Retail sales rose 1% in July vs. the prior month, sharply above a 0.3% consensus forecast. Excluding vehicles, a 0.4% gain also well exceeded the Econoday view for a 0.1% gain.
Stock Market Today
At around 10:20 a.m. ET, the Nasdaq composite gained 1.6%, slightly trailing a 1.8% jump by the Russell 2000. The former remains lower for the third quarter so far, but the decline has shrunk to 1.5%.
The S&P 500 also showed a bullish face, up 1%. The Invesco S&P 500 Equal Weight (RSP) exchange traded fund pretty much matched the market cap-weighted S&P 500. Meanwhile, the Dow Jones Industrial Average gapped up to advance almost 1%. The Dow looks poised to rise for the fifth time in six sessions.
Volume was running virtually even vs. the same time on Wednesday on the Nasdaq. NYSE turnover increased vs. the same time on Wednesday.
This Is Why Microsoft Stock Is A Buy Now
Walmart Emerges As 2024 Leader
Meta had cleared an early trendline entry near 519 as a new base forms and is still in the 5% buy zone.
And Microsoft, for long-term holders with a nice cushion of gains, could decide to add to their position as the cloud computing and AI pioneer strives to bottom out at its 200-day moving average.
Leading the Dow Jones: Walmart (WMT), which had already cleared a double bottom at 60.89 in mid-May following a good quarterly report. In recent weeks, Walmart hugged its 50-day moving average, a sign of institutional demand. On Thursday, the retailing titan reported further growth. Earnings for the July-ended fiscal second quarter rose 10% on a 5% gain in sales to $169.3 billion.
Gross margin at Walmart of 24.8% remained stout and was the highest in at least four quarters. The higher margin reflects the company’s ability to either command good prices or achieve a lower cost of goods sold.
As a weekly chart shows, Walmart has surged off its rising 10-week moving average. This rebound offers a follow-on entry. IBD rules recommend buying no more than 5% above the value of the 10-week line, which in this case goes from 69.20 to 72.66.
Stocks On The Move In The Stock Market Today
Other large caps in the stock market also rose on earnings. But the machinery sector has gotten damaged amid the sell-off that hit stocks in early August.
Deere (DE), a laggard in the stock market today, rallied more than 4% in volume running quadruple usual levels. The company beat second-quarter views. But Titan Machinery (TITN), which operates farm equipment stores, nose-dived again following weak results. Titan dropped 14% to 13.14 and is down more than 54% year to date.
Caterpillar (CAT), however, was among at least seven companies within the Dow Jones Industrial Average to rally 3 points or more.
Caterpillar, which holds a 76 Relative Strength Rating, attempted a breakout past a double-bottom base at 364.43 nearly four weeks ago. But the breakout fizzled immediately. Watch for a new base to possibly set up.
A New Options Trade For This Megacap Tech
Beyond The Stock Market Today
The yield on the key U.S. Treasury 10-year bond spiked 12 basis points to 3.94%. It rose to as high as 3.95%.
Crude oil futures on the NYMEX rebounded 1.3% to $77.98 a barrel after taking some big hits in recent days.
Gold inched up 0.2% to $2,484 per ounce. It has been gliding to all-time highs for much of this year.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
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