Dow Jones Turns Positive After Strong Weekly Gains; Two top medical stocks record breakouts
The Dow Jones Industrial Average turned positive in midday trading on Monday, following last week’s big rally in major indexes. The S&P also turned slightly positive while the Nasdaq remained lower.
Dow Jones today
Around 12 p.m. ET, the Dow Jones Industrial Average rose 0.1% while the S&P 500 gained 0.2%. after erasing losses. Small caps also posted gains, with the Russell 2000 up 0.8%. The S&P 500 gained 6.5% on the week, its second biggest weekly gain this year and its first weekly gain since late May. The Dow Jones rose 5.4% for the week.
The tech-heavy Nasdaq composite rose 7.5% last week, leading the rise, but struggled to turn positive on Monday. Volume was higher on the Nasdaq and NYSE compared to the same time on Wednesday, according to IBD data.
Although solid progress was made in the past week, the indices still have many hurdles to overcome. Namely, the 10-week moving average remains an overhead resistance point that the indices are all about to touch.
Pending home sales rise in May
Pending home sales, released at 10 a.m. ET, rose 0.7% month over month in May, according to the National Association of Realtors. According to Mortgage News Daily, the average 30-year fixed mortgage peaked at 5.64% in the first week of the month, but then fell to 5.25% later in the month. This dip could probably explain the gain in sales in May, which ended a six-month streak of falling demand. However, pending home sales are down more than 13% from May 2021.
On Wednesday around 9 a.m. ET, Federal Reserve Chairman Jerome Powell is expected to participate in an economic policy roundtable ahead of the European Central Bank’s Central Banking Forum. Powell’s comments could have an effect on the market.
Leading the Dow Jones
Oil inventory Chevron (CLC) led the rise in Dow Jones Industrials on Monday, as stocks rose 2.6%. The oil giant is on the rise after a few weeks of significant losses.
Among the S&P 500 sectors, the energy sector is by far in the lead. Energy Select Sector SPDR (XLE) climbed 3.5% as it attempts to break a two-week downtrend. The price of U.S. crude oil reversed on Monday, rising more than 1% to $108.72 a barrel.
Merck (M.K.R.) was also among the leading stocks, gaining more than 2%, according to MarketSmith analysis. Shares moved above a flat base entry of 95.02 while the stock’s RS line is near a new high. Shares of the Dow Jones leader have gained more than 10% in the past week.
Medical Stock Mate UnitedHealth (A H) also led the Dow, up 2%. Shares rose as the managed care stock attempts to break above a buy point at 507.35 double bottom. UnitedHealth finally gained a solid footing above its 50-day moving average, while its RS line also hit a new high on Monday.
Dow Jones leader Nike falls ahead of earnings
Dow Jones Giant Nike (NKE) is trading lower as it prepares to release fiscal fourth quarter results after the market close. Wall Street expects Nike earnings per share to fall 13% to 81 cents per share with revenue down 2% to $12.07 billion. The sportswear giant has faced a number of headwinds in recent quarters, including pandemic shutdowns at its operations in Vietnam, where it makes 80% of its footwear and half of its apparel.
The Dow Jones component fell almost 2% to 110.75 after the market opened on Monday, paring the modest gains made last week. Stocks remain below a 50-day declining line and are poised to eclipse a 22-month low of 103.46 on May 26. The stock plunged from a record low of 179.10 on May 5.