The Dow Jones industrials led as trade turned mixed on Thursday. Early action received a boost from March retail sales, as markets awaited IPOs from Pinterest (PINS) and Zoom Video Communications (ZM).
The Dow Jones Industrial Average saw its gain thin to 0.2%, with Travelers (TRV) and a rebounding UnitedHeath Group (UNH) leading the charge. The S&P 500 reversed lower, while the Nasdaq slipped 0.4%.
Check Point Software (CHKP) fell hardest on the Nasdaq 100, while Snap-On (SNA) and United Rentals led the S&P 500. Chip stocks were mixed, as ASML Holdings (ASML) rebounded and Taiwan Semiconductor (TSM) advanced after its first-quarter report. The iShares PHLX Semiconductor ETF (SOXX) traded a fraction in the red.
March Retail Sales Surge
Retail sales jumped 1.6% in March, the Commerce Department said. That reversed February’s 0.2% slip and was double economists’ target for a 0.8% gain. Sales minus autos and gas rose 0.9%, vs. a 0.6% slip in February. Economists projected a 0.4% increase.
Manufacturing growth slowed in April, according to the Philadelphia Federal Reserve, which reported a reading of 8.5 for the month in its Business Outlook Survey. That was a sharp drop from March’s 13.7 tally. Economists had projected a downturn to 10.5.
General activity and shipments decreased, new orders and employment improved. The price received index fell five points, to its lowest mark since December 2017. Price paid increased two points — the first increase in nine months.
Researcher Markit releases its initial composite reading on U.S. growth at 9:45 a.m. ET.
Dow Jones Stock: Travelers Scores Breakout
Travelers stepped up 2.3%, breaking above a 138.70 cup-with-handle buy point in heavy trade. The property and casualty insurance giant reported a better-than-forecast 15% gain in first-quarter earnings. A 5% revenue advance stopped short of analyst targets. The company raised its quarterly dividend 6.5%, to 82 cents.
Blackstone, Union Pacific Top Buy Points
United Rentals gapped up 7.7%, and Blackstone Group spiked 8.5% in early action. Blackstone surged in a breakaway gap above a 36.10 buy point. The breakaway gap move established a buy range beginning at the stock’s opening price of 38.97.
Union Pacific bolted 4.7% higher after a mixed first-quarter report. The gain moved shares above a 172.54 buy point in a flat base. The buy zone ranges to 181.60.
Match Group gave up its premarket advance to slip 1.3%, ahead of the company’s May 8 earnings report. Match ended Wednesday’s session 4% below a 61.01 buy point in a cup-with-handle base.
Indexes Paused Below Trade-War Highs
Indexes are mixed heading into the final trading session before the long weekend. The Nasdaq Composite is up 0.15% for the week and fighting for a fourth-straight weekly gain. The Dow Jones industrials are up 0.14%, while the S&P 500 has slipped 0.2% for the week.
Indexes continue to hover just below their respective 2018 peaks, all of which marked incremental tariff increases in the U.S.-China trade war. Additionally, the Dow’s Oct. 3 peak occurred on the same day that U.S. oil prices reversed lower, after oil supply waivers were announced for China, Japan and India as the U.S. reinstated sanctions on Iran.
For more detailed analysis of the current stock market and its confirmed uptrend, study the Big Picture.
IPO Watch: Pinterest, Zoom Launch
A significant day for IPOs will see the launch of both Pinterest and Zoom. Pinterest priced at 19, raising $1.4 billion and valuing the company at $12.6 billion. Zoom priced at 36, bringing the company $730 million and placing its value at $10.5 billion.
The Renaissance IPO ETF (IPO) slipped 1.5% at Thursday’s open, but holds a year-to-date gain of 30%.
Keep an eye on the market’s top IPOs at IBD’s IPO Leaders.
China Slips In A Strong Week
Global investors showed some motion toward safe havens Thursday, pushing up the dollar, the yen, gold and bonds. Commodities moved generally lower.
The Citigroup Global Markets VelocityShares 3x Long Crude Oil (UWT) reversed early gains and slipped 0.3% Thursday, but showed an 18% gain since the start of April.
Stocks in China and Japan moved lower Thursday as investors took profits after the recent advance. The Shanghai Composite slipped 0.4%, leaving it ahead 1.9% so far for the week. Hong Kong’s Hang Seng Index shed 0.5%, giving it a 1.8% increase through Thursday. Tokyo’s Nikkei 225 dropped harder, down 0.8%, narrowing its gain for the week to 1%.
The Hong Kong Stock Exchange will be closed Friday and Monday on holiday. Markets in Shanghai and Tokyo will operate on a normal schedule.
The Direxion Daily CSI 300 China A Share Bull 2X (CHAU) slipped 0.8% early Thursday, and is up 12% since the beginning of April.
Markets in Europe and the U.K. traded higher in their afternoon sessions. London’s FTSE 100 fought to hold a 0.1% gain, despite data showing U.K. retail sales surged for a third straight month in March. The DAX in Frankfurt pushed ahead 0.4%, and the CAC-40 in Paris climbed 0.3%.
Markets in London, Frankfurt and Paris will remain closed through Monday for the Easter holiday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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