The stock market opened higher Thursday morning, erasing overnight losses. The stock market rally is reeling, with the Nasdaq and growth stocks under heavy pressure in recent weeks amid rising bond yields. Federal Reserve Chairman Jerome Powell will speak today, with investors looking for any possible comments related to Treasury yields.
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The Dow Jones Industrial Average rose 0.5% while the Nasdaq composite and S&P 500 climbed 0.4%.
Dow component Boeing (BA) is near a buy point after flirting with a breakout Wednesday. Brazilian miner Vale (VALE), global steel giant Arcelor Mittal (MT) and specialty chemicals maker Element Solutions (ESI) are also are near entries.
Boeing stock rose 3% early Thursday. But this is a tricky market for any buys.
The U.K. has launched an antitrust probe vs. Apple (AAPL) over alleged anti-competitive practices at its App Store. Apple already faces App Store investigations by antitrust officials in the U.S. and European Union.
Apple stock was little changed after the open. Shares lost 2.45% on Wednesday. AAPL stock is below its 50-day line after a late January breakout fizzled.
Walt Disney (DIS) will close at least 20% of its Disney store locations by the end of the year, including at least 60 in the U.S. It’ll focus more on e-commerce. It’s just the latest example of Disney shifting its business online. Disney stock fell a fraction, and is near the top of its buy range from a flat base.
DraftKings (DKNG) rallied nearly 3% on a deal with UFC to become exclusive sportsbook and daily fantasy partner in the U.S. and Canada.
Square (SQ) is buying a majority in Jay-Z’s music platform Tidal for $297 million. Jay-Z will join Square’s board. Square stock fell modestly.
Burlington Stores (BURL), soared and gapped out of a flat base. The off-price retailer reported a 3% revenue gain after three straight quarters of declining sales.
Chipmaker and software maker Broadcom (AVGO) reports late tonight. AVGO stock fell to its 10-week line on Wednesday, but held above that level after the open. Broadcom is an Apple iPhone supplier, but that’s only part of the business.
Disney stock is on SwingTrader.
The 10-year Treasury yield was steady at 1.47% after rising Wednesday, ending a three-day slide. The 10-year Treasury yield briefly topped 1.6% last week.
Initial jobless claims rose to 745,000 last week from 730,000. Economists expected to see new filings increasing to 760,000.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Fed Chief Powell Plot ‘Twist’?
Fed chief Jerome Powell will speak at a conference just after midday Eastern Time. It’ll be his last public comments before the March 16-17 Fed meeting. The 10-year Treasury yield has surged over the last several weeks on expectations that a massive Biden stimulus bill, along with the coronavirus pandemic fading in the months ahead, will spur a huge economic recovery that can drive up inflation. Crude oil, copper and many commodity prices have skyrocketed recently. While that’s been good news for mining, financial and many other so-called “real economy” companies and stocks, it’s been a catalyst for the sell-off in growth stocks.
Powell and other policymakers have signaled they want faster inflation and are probably not too concerned about 10-year Treasury yields below 2%. But the pace of rising yields has caught the eye of Fed Gov. Lael Brainard, she admitted Tuesday.
Powell has stressed that he’s focused on full employment, not worried about financial markets, though that was in the context of the stock market rally punching to fresh highs. But investors may want to hear he say that he’s at least paying attention to Treasury yields.
Could Powell hint at a policy change? There’s speculation that the Federal Reserve could try to bring down long-term yields, by buying long-term Treasuries and buying shorter-term Treasuries. The Fed has employed this “Operation Twist” before, in 1961 and again in 2011.
But even if Powell is ready for such a move, he may not want to tip his hand before the mid-March Fed meeting.
Stock Market Rally On The Brink
The stock market rally may be on its last legs. The confirmed uptrend has been an “uptrend under pressure” for several days.
The Dow Jones Industrial Average slipped 0.4% in Wednesday’s stock market trading. The S&P 500 index slumped 1.3%, closing just above its 50-day line. The Nasdaq composite plunged 2.7%, tumbling below its 50-day line and closing below its Feb. 23 low. All the major indexes closed near session lows.
If the S&P 500 falls through its 50-day line and the Nasdaq loses further ground, the post-election stock market rally may be over.
Investors need to focus on sectors that are working and scale back exposure in speculative growth names.
Read The Big Picture tonight to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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