Shares rubbed off the starting gate on a mixed open Friday, with the last trade meeting in May stuck in anticipation of a press conference on China announced by the White House late Thursday. Revenue news generated great early moves from Zscaler and VMware. Zoom Video led the IBD 50 list. Coronavirus vaccine stock for Moderna and BioNTech received. Intel and Microsoft fought for the leadership of Dow Jones today.
Shares slumped late Thursday after President Donald Trump announced a press conference on Friday regarding China. No time was given for the event, and uncertainty has increased in terms of US-China trade relations, which effectively developed into the Cold War status over the past week.
Technical stocks rose in the stock market today, possibly on expectations of trade restrictions against Chinese technology. Nasadq jumped 0.5% at the open, which Zoom video (ZM) and IBD Leaderboard bearings DexCom (DXCM) collected more than 3% each.
Dow industrials trimmed its opening loss to 0.3% as Boeing swung to the bottom of the index, down 3% in early trading.
The S&P 500 mated losses to less than 0.1%, as revenue drove some of the heaviest early declines among S&P 500 shares, with DXC technology (DXC) down more than 14% at the bottom of the list. Salesforce.com (CRM) as well Costco wholesaler (COST) were also early losers.
ASML Holding (ASML) stayed 1.5% when open. The ASML stock closed on Thursday in a buy range, just above a 319.32 buy point in a 13-week cup base. The purchasing area goes to 335.39.
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Dow Jones Today: Intel In Buy Range
Great chip Intel (INTC) and MicrosoftMSFT each increased more than 1% on Dow Jones today. Both are potential beneficiaries if the White House chooses to tighten restrictions on China-based technology.
The early gain lifted the Intel stock to just above a 62.23 buy point in a cup-with-handle base.
IBD 50 list: Zoom in video purchase interval
Zoom video communication (ZM) led the IBD 50 list and traded 1.5% higher in early action. The video conferencing technology manager bounced into a buy range on Thursday, after a touchback to its 10-week moving average. It is the third recovery from 10-week support since a cup base outbreak in February. Shares are well outside the 20% limit, which marks the beginning of a profit-making zone.
Revenue News: VMware Eyes Breakout, Big Lots Spikes
Later IPO Zscaler (ZS) shaved more than 20% higher when analysts lifted price targets after a strong third-quarter financial report at the end of Thursday. Williams-Sonoma (WSM) also earned a price increase, as revenues and revenues declined less than expected during the first quarter. The shares sailed 11% higher.
VMware (VMW) fell more than 8%, also boosted by price increases and the above-forecast first quarter results. The profit sent the stock past a buy point of 142.79 handles in a deep bottom base.
Large lots (BIG) seemed to continue its six-week rally, with 3.6% in early trading. The closeout store chain reported revenues that were more than double analytic estimates in its first five-quarter profit increase. The shares closed on Thursday with 56% in May and with an annual gain of almost 28%.
On the downside was sending revenue from marijuana Canopy Growth (CGC) decreased by 19%. Salesforce.com (CRM) as well Costco wholesaler (COST) also decreased revenues.
Trump Press Conference, Twitter War
Markets are likely to remain cautious ahead of a press conference that Trump said he would hold indefinitely on Friday to discuss issues in China. The markets turned into heavy losses following the announcement of the comments at the end of Thursday.
Trump’s war with the media, at least social media, also intensified sharply on Thursday. After the market closed, the president signed an executive order “seeking to limit the power of major social media platforms by interpreting a critical law of 1996 that protects websites and technology companies from lawsuits,” according to CNN. Whether the president has the judicial authority to interpret laws passed by Congress is likely to disappear in the courts in the coming months.
On Thursday night, Twitter released a warning about another Trump tweet about the U.S. military that could potentially intervene in the riots that are ongoing in Minneapolis. Twitter shares traded 0.3% at the beginning of Friday, down 3% for the week at the end of Thursday’s session, but still had a 10.2% gain for May.
Dow Jones Today: Catch-Up Rally Status
Dow Jones is preparing to cancel the second month of its recovery from the recession in the coronavirus. The index closed on Thursday with a 4.3% gain so far this month. That makes it its best May result since 2007. In the normally soft month for the market, Nasdaq this year has risen by 5% and the S&P 500 has a profit of 4%.
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But early action showed that Dow was prepared for a decline, so it could lose some of the 4.3%. A case for testing the 25,000 mark and more specifically the April 29 elevation of about 24,800 would not be a surprise. Finding support at that level would be a bullish growth for the market. A fall back below that line would signal that three days spent over that resistance was not enough to beat it.
In the market with small caps, Russell 2000 ended Thursday with 6.9% in May. It marks what has been its best result so far in May since 2003. It also faces the prospect of dropping back to test its April 29 high, about 1,375, and determine if this resistance has been supported.
A good chunk of May’s gains for Dow occurred over the past week. Up to Thursday, the Russell / Dow pickup had to some extent reduced the difference in recent gains between Nasdaq and the rest of the market.
By Thursday’s end, Dow had reduced its loss for the year to 12.3%, compared to 16.6% a week ago. Russell was still down 16.1% for the year, compared to 18.8% a week ago. The S&P 500 ended Thursday with a 6.2% decline this year. Nasdaq has grown 4.4% since December 31.
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Coronvirus update: An increase in new tests
The cumulative sum of confirmed cases of coronavirus worldwide increased by more than 112,000, an increase of 1.9%, to more than 5.9 million. The number of deaths increased by 1.3% to 362,555, according to Worldometer data. The proportion of cases that occurred in the countries of the European Economic Area continued to decline, falling to 23.4% on Friday. EEA countries have reported just over 45% of the world’s total deaths from the virus, according to data from the European Center for Disease Prevention and Control.
The United States confirmed 22,697 new cases and reported another 1,230 deaths. That put the US proportion of total coronavirus cases worldwide below 30% to 29.8%. The US share of total deaths from the disease remained steady at 28.5%.
Brazil’s rate of infection accelerated sharply, surpassing the United States with more than 24,000 new patients reported for 24 hours through Friday morning. Russia’s rate of increase was roughly steady and reported 8,572 new cases.
Among the US states, new cases in New York, New Jersey and California continued to hover around the 2000 level. Illinois, Texas, Maryland and Virginia all continued to report approximately 1,000 new cases per day.
Testing in the United States increased, with states reporting a total of 453,560 tests conducted on Thursday. It is the highest daily number so far, raising the 10-day average for tests to 384,251 – the first increase in that two-day average, but still below Monday’s high of over 392,000.
Coronavirus stock: Moderna, BioNTech, Pfizer Rise
Among layers associated with coronavirus pandemic, modern (MRNA) fell almost 4% and Bion Tech (BNTX) gained almost 2% in early trading.
Modern shares bounced more than 6% on Thursday, after the company signed an expanded manufacturing agreement for a potential coronavirus vaccine now in clinical testing. The move put shares in a buy range on a rebound from the stock’s 10-week moving average.
Germany-based BioNTech collaborates with blue chip drug manufacturer Pfizer (PFE), develops a Covid-19 vaccine candidate currently in clinical trial in the U.S. BioNTech looks to catch a five-day decline and resume support at its 10-week moving average. Pfizer shares rose 0.6%, one of the top advances in the market at Dow Jones today.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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