Stock futures continued lower early Thursday as profiut-taking continued, despite a better-than-forecast weekly jobless claims report. Several biotechs gained ground, with Sorrento Therapeutics soaring on an FDA Covid test approval, and Moderna aiming to extend its rally after a coronavirus vaccine update. Furniture maker Herman Miller spiked on earnings news. Apple took the biggest early bite out of the Dow Jones today.
Nasdaq futures led the early declines, falling 2% below fair value. Tesla (TSLA) and Zoom Video Communications (ZM) paced the declines among Nasdaq 100 stocks, with Tesla down nearly 6% and Zoom shedding about 4%. Tesla may have felt some additonal pressure from data showing a 19% decline in auto registrations in Europe for August.
S&P 500 futures shed 1.4% on the stock market today. Cruise line operator Carnival (CCL) dived deepest among S&P 500 stocks, down more than 3%. Defense tech leader General Dynamics (GD) was close behind, off 2.6% after Goldman Sachs downgraded the stock to sell, from buy.
General Electric (GE) was a lonely bright spot on the S&P 500, rising 2.7% after an operational update on Wednesday guided expectations toward positive cash flow for the second half of this year.
Office furniture innovator Herman Miller (MLHR) rocketed more than 14% after topping analyst views with a 48% earnings gain, while holding its revenue decline to 7% in its fiscal first quarter.
Dow Jones Today: Apple Leads Slide
Dow Jones futures dropped 1%. Dow Jones stocks Apple (AAPL), Microsoft (MSFT) and Salesforce.com (CRM) all posted early declines of more than 2%.
Apple shares managed a 0.2% gain for the week through Wednesday, despite positive reviews from analysts following Tuesday's launch of the company's new smartwatches and tablets.
IBD 50: Digital Turbine, Nvidia
Among IBD 50 stocks, investors appeared set to lock in some profits after two days of big gains for Digital Turbine (APPS), sending shares down 5.9% ahead of the open. The stock had rallied 33% for the week through Wednesday, breaking out past a shelf pattern buying opportunity.
Chipmaker Nvidia (NVDA) slipped more than 3% in early action, pointing shares toward another test of support at its 10-week moving average. Nvidia is also an IBD Leaderboard listing.
Jobless Claims Dip, Housing Starts, Philly Fed
Wednesday's no-surprise Fed announcement and press conference marked a profit-taking juncture for the market, with the Nasdaq leading a serious downshift late in the day.
Weekly jobless claims eased to 860,000 in the week ended Sept. 12, the Labor Department, reported. That was below the prior week's 884,00 claims and well below consensus views for an uptick to 893,000. Almost 1 million fewer Americans filed continuing claims, leaving the total number of Americans on state benefit rolls at 12.6 million, for the week ended Sept. 5.
The Philadelphia Federal Reserve's September Manufacturing Business Outlook Survey dropped to a reading of 15, down from August's 17.2, undercutting expectations for a tally of 15.5. The results was disappointing after the New York Fed's Empire State Survey on Tuesday spiked to more than double its consensus target.
On The Radar: Meritage Homes Rises
Housing start activity was weaker than projected in August, with the Commerce Department reporting new starts occurring at an annualized pace of 1.416 million. The was below July's 1.496 million rate, and also below consensus forecast for a decline to 1.486 million starts.
Building permits, which point to upcoming activity, were also sub-par, with permits issued at an annualized rate of 1.47 million for August. July permits came in at 1.495 million. Consensus views estimated a 1.530 million rate for August.
On Wednesday, the National Association of Home Builders reported its Housing Market Index surged to the highest level on record for September.
Homebuilder stocks moved generally lower. IBD Leaderboard stock LGI Homes (LGIH) dipped 0.9%. Meritage Homes (MTH) was an exception, jumping 2.5% on news that co-founder Steve Hilton would retire as CEO, remain as chairman, effective Jan 1. Chief operating officer Phillippe Lord was appointed to the CEO post.
Biotech/Vaccine News: Moderna, BioNTech, Sorrento
Biotech Moderna (MRNA) trimmed its early gain to 1%, still looking to add a seventh day to its rebound. The company announced its Phase 3 trial of a Covid-19 vaccine had reached full enrollment of more than 25,000 persons. The company also has two vaccine candidates in Phase 2 trials. Shares have gained 16% since Monday.
San Diego-based Sorrento Therapeutics (SRPT) rallied 25% higher after receiving Food and Drug Administration approval to proceed with phase 1 trials for a neutralizing antibody treatment for Covid-19 patients. The company said it aims for a possible FDA emergency use authorization before the end of the year.
Germany-based BioNTech (BNTX) climbed 2.2%, aiming to extend its two-week bounce. The company announced plans to purchase a Marburg, Germany manufacturing facility from Swiss drugmaker Novartis (NVS). The move is part of BioNTech's effort to expand COVID-19 vaccine production capacity by up to 750 million doses per year, aiming for output of 250 million doses of in the first half of 2021.
Coronavirus Update: Testing Declines
The running tally of coronavirus cases worldwide topped the 30 million mark in the 24 hours to Thursday morning. That includes all of the patients who have recovered, as well as the 945,578 persons who have died, since the start of the outbreak.
Global active cases continued to trend higher, climbing above 7.28 million on Wednesday. That was up 5.6% from Aug. 31, according to Worldometer data.
In the U.S., the total case count climbed above 6.82 million through Thursday morning, about 23% of the global total. India accounts for 17% of the global total. Brazil has a 15% share of total cases.
Active cases in the U.S. continue trending downward following a high above 2.66 million on Sept. 1. On Wednesday, Worldometer reported active cases dropping below 2.51 million, the lowest number since Aug. 26.
Testing levels continue to decrease. On Monday, the Covid Tracking Project reported just over 450,000 tests conducted — the lowest level the number of daily tests performed since June 15. The 10-day average for testing on Wednesday dipped below 632,000, its lowest mark since July 7.
Dow Jones Today: Common Ground
The Dow eked out a nominal advance on Wednesday, adding a fourth straight increase while the Nasdaq and S&P 500 dropped 1.3% and 0.5%, respectively. At the small cap end of the market, the Russell 2000 jumped 0.9%. The overall effect took another bite out of the gap between the Nasdaq's rally and the still-hoping-to-turn-positive performances of the Dow industrials and the Russell.
The Russell 2000 posted a 3.7% gain for the week through Wednesday. The Dow and S&P 500 are up 1.3% apiece. The Nasdaq has a 1.8% gain. All four indexes are working to halt two-week pullbacks, and confirm support at their 50-day moving averages.
For now, the 50-day line is the common denominator. It is the first time in this historical year in which all of the three leading benchmarks are simultaneously pulled back to the line. The Nasdaq and S&P 500 slipped below their short-term 21-day averages on Wednesday, while the Dow and Russell 2000 held above that level. But the 50-day has provided the floor for the broader pullback, currently around 10,980 for the Nasdaq and 27,400 for the Dow. Moves below those levels by the Nasdaq or Dow Jones today would signal a collapse in that floor, and a loss of institutional support.
The stock market uptrend remains under pressure. It is a time for cautious investors to be locking in profit, shifting to cash and building watchlists. For more aggressive investors, leading stocks scoring breakouts are still fair game, but new buys should be small to start, and with tighter stops.
Reprinted from yahoofinance, the copyright all reserved by the original author.
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