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Dow Jones Leads Stock Market But Pares Gains As Biden, GOP Work On Infrastructure Plan

The Dow Jones Industrial Average sharply pared its gains midday Thursday, after rising nearly 300 points early on better-than-expected jobs data.




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The Dow Jones industrials rallied 0.4%, the S&P 500 rose 0.3% and the Nasdaq added 0.2% in the stock market today. Small caps tracked by the Russell 2000 outperformed, up 1%. Volume was higher on both major exchanges vs. the same time Wednesday.

President Joe Biden and Republicans continue to work on an infrastructure plan. Biden’s latest offer to Republicans was $1.7 trillion, while the Republican offer stands around $1 trillion. The White House also announced a $6 trillion budget, on which Biden is expected to offer some details on Friday.

Stocks pared early gains midday Thursday, on reports the budget assumes Biden’s proposed higher capital-gains tax rates were in effect as of late April.

Initial jobless claims fell to 406,000 the week ended May 22, the Labor Department said early Thursday. That was down nearly 9% from the prior week and well below economists forecast for an increase to 450,000 claims. Jobless filings fell for the fourth week in a row.

Durable goods orders fell 1.3% in April, according to the Commerce Department. That reversed the prior month’s 1.3% increase and missed estimates for a 0.7% monthly gain. Core capital goods, which excludes Defense Department orders, surged 2.3%. That was up from 0.9% in March and well above projections for a 0.9% gain.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34450.13 +127.08 +0.37
S&P 500 (0S&P5) 4207.14 +11.15 +0.27
Nasdaq (0NDQC ) 13758.00 +20.00 +0.15
Russell 2000 (IWM) 225.48 +2.13 +0.95
IBD 50 (FFTY) 44.57 +0.11 +0.25
Last Update: 11:56 AM ET 5/27/2021

Tech stocks lagged early Thursday. Monday’s tech rally helped the Nasdaq regain its 50-day moving average. On May 10, the Nasdaq tumbled 2.6% to close below the line for the first time since March.

Last year, tech stocks boosted the Nasdaq to a 43.6% gain — its fifth-best year ever. The S&P 500 rose 16.3% in 2020, and the Dow added 7.2%. Read The Big Picture for more detailed daily market analysis.

Covid-19 Update

The U.S. economy is recovering from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. But many states are relaxing restrictions, and cases are plateauing or declining in some states as vaccinations continue to roll out.

Cumulative Covid-19 cases worldwide have topped 169 million, with more than 3.5 million deaths, according to Worldometer. In the U.S., cases are approaching 34 million with over 606,000 deaths, although the number of new cases and deaths in the U.S. has slowed dramatically in many states.

On Wednesday, GlaxoSmithKline (GSK) and Vir Biotechnology (VIR) won FDA authorization for their Covid-19 treatment. The drug, dubbed sotrovimab, is designed to withstand existing variants. It joins Regeneron Pharmaceuticals (REGN) and Eli Lilly (LLY) as the third antibody-based regimen in the U.S.

But GlaxoSmithKline slipped nearly 1% and Vir reversed from a 4% gain to a 5.7% loss. Vir soared more than 32% on March 11, when the companies unveiled interim test results for sotrovimab. Since then, Vir stock has fallen off. Still, on a year-to-date basis, shares have climbed close to 71%.

Dow Jones Winners And Losers

Boeing (BA) soared 3% in fast turnover to gap up above its 50-day moving average. Southwest Airlines (LUV), a top Boeing 737 customer, says it could need up to 500 new aircraft as it expands routes across the U.S. as the coronavirus pandemic wanes.

Boeing stock is building the right side of a possible cup base, according to MarketSmith chart analysis. The potential buy point for now is 278.67.

Among other blue chip gainers, Honeywell (HON), Walgreens Boots Alliance (WBA) and Intel (INTC) rose more than 1% each.

JPMorgan Chase (JPM), up 0.7%, remains in potential buy range from a 161.79 entry of a flat base. The buy range for JPMorgan stock tops out at 169.88.

But Merck (MRK) and Amgen (AMGN) gave up nearly 1% apiece. Merck, on track to extend its losing streak to five, fell further below its 50-day line.

Outside The Dow

Steel, energy and auto-related stocks led the upside among IBD’s 197 industry groups. Software, solar and long-term medical care stocks lagged.

In the automaker group, Ford (F) surged 8% in heavy trade to its highest level in over five years. It’s now extended from a 13.72 buy point of a cup base cleared on Wednesday, when the stock vaulted 8.5%. Ford joined IBD Leaderboard Wednesday.

Shares rallied after Ford announced plans to spend more than $30 billion on electric vehicles by 2025. It now expects at least 40% of its vehicles to be fully electric by 2030. Ford also unveiled its F-150 Lightning, an EV version of America’s bestselling vehicle, last week.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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