The Dow Jones Industrial Average powered to a new record, but the Nasdaq fared best as the stock market shrugged off a dismal jobs report. Nike (NKE) and Boeing (BA) were the leading blue chips, while IBD 50 stock Square (SQ) fought to retake a key technical benchmark on strong earnings.
Technology and other growth stocks surged higher as the weak jobs report eased worries the Federal Reserve will speed up a tapering of bond purchases due to inflation fears. A host of growth stock passed buy points, including MarineMax (HZO) and IPO stock Revolve (RVLV).
Jobs Report ‘Justifies’ Fed Stance
A weak jobs report initially brought buyers into the bond market Friday, however, the 10-year Treasury yield ended virtually unchanged at the 1.58% mark.
The economy added 266,000 jobs in April, well below the consensus estimate of 998,000. March job growth was revised lower to 770,000 from an initially reported 916,000.
OANDA senior market analyst Edward Moya believes the weak data supports the Federal Reserve’s current approach. He also said it will change the thinking of many traders about how the recovery is unfolding.
“The debate on whether entitlement spending is hurting hiring will grow, but in the end this big miss should give Biden more ammunition to push through his next stimulus/infrastructure package,” he said in a note to clients. “The April unemployment rate rose to 6.1% from 6.0%, a big surprise that justifies the Fed’s cautious stance.”
Nasdaq Leads S&P 500
The Nasdaq was the biggest benefactor as tech stocks rallied. It posted a gain of 0.9%. Match Group (MTCH) was the top performer, rising almost 5%. The dating stock is continuing to rally on earnings, and rallied back to its 50-day moving average.
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The S&P 500 also posted a solid gain, rising around 0.7%. Managed care stock Centene (CNC) was the day’s standout performance, rising by around 8%.
The S&P sectors were all green. Energy and real estate posted the biggest gains, while consumer staples made up the least ground.
Small caps fared even better than the major indexes but were left in the shade by the performance of growth stocks. The Russell 2000 was up around 1.3%, however the Innovator IBD 50 ETF (FFTY) gained an even better 2.3%.
Nike Stock Aids Dow Jones
The Dow Jones Industrial Average made a new closing high after posting a gain of 0.7%. Nevertheless, it lagged the other major indexes.
Nike was the best-performing component, posting a gain of 3.2%. The stock retook its 50-day moving average, but stock market performance over the past 12 months has been weak.
NKE stock has a way to go before it hits a consolidation pattern buy point of 148.05, MarketSmith analysis shows.
It was closely followed by aerospace giant Boeing. The stock posted a gain of more than 2%, but remains shy of its 50-day line.
Square Stock Fights For Key Benchmark On Earnings
IBD 50 stock Square fell from session highs but still gained around 4% on strong earnings. The stock moved above the key 50-day moving average, though it ended up slipping back below the key technical benchmark.
The company reported a 266% surge in revenue, helped by surging Bitcoin demand. Bitcoin made up 60% of total revenue.
Fellow index member Floor & Decor (FND) fought back to close slightly higher. The Leaderboard stock struggled through most of the session despite posting an earnings beat. However, it remains in a buy zone after previously passing a 108.14 entry point.
MarineMax Stock Passes Buy
MarineMax, which ranks second on the prestigious IBD 50 list, is in buy zone after staging a breakout. The recreational boat and yacht retailer passed a buy point of 64.09.
It made the move in above-average volume, which is a bullish sign. The RS line is also spiking, which is encouraging.
The stock has been boosted by the coronavirus pandemic. Boating, like RVs, grew in popularity as a safe vacation alternative.
IPO retail stock Revolve (RVLV) also surged past a buy point. It is at the top of a buy zone after passing a consolidation pattern entry of 55.93 on strong Q1 results.
The mid-2019 issue saw its shares gain more than 12%, while its RS line spiked to a new high.
Both earnings and stock market performance are mighty, earning RVLV stock a Composite Rating of 97.