The stock market rally gained momentum, as Microsoft (MSFT), Facebook (FB) and Google parent Alphabet (GOOGL) broke out to record highs. Apple (AAPL) and many growth names reclaimed their 50-day moving averages. The Dow Jones and S&P 500 hit fresh record highs while the Nasdaq closed in on all-time levels.
Nasdaq A Full Member Of Stock Market Rally
The Nasdaq continued its strong start to April, pushing toward record highs after a long stretch of underperformance. The S&P 500 and Dow Jones also set record highs. Facebook, Microsoft and Google broke out while many highly valued growth names flashed at least early buy signals. Apple and Amazon.com (AMZN) also began waking up. Some economic recovery and reopening plays took a breather.
Fed’s Powell Wants Jobs Boom
Federal Reserve Chief Jerome Powell said Thursday that it will take a “string” of jobs reports like March’s 916,000 gain to “really begin to show progress to our goals.” That confirms there will be no hints that policymakers are thinking about tapering asset purchases in the next monetary policy update on April 27. But the Fed might broach its plan for an eventual, gradual taper at the June 16 or July 28 meetings.
Initial claims for jobless benefits unexpectedly rose to 744,000 in the week of April 3, the second straight increase after falling to 658,000, lowest since the Covid shutdown in March 2020. The data points to some risk that April’s jobs report, which is based on midmonth surveys, could prove less robust.
Yet other employment and economic indicators suggest lots of cause for optimism. The Institute for Supply Management’s service-sector activity index surged 8.4 points to 63.7 in March. That indicates the sharpest growth in the index’s history back to 1997. Meanwhile, the Labor Department’s report on labor market turnover showed job openings rose to a two-year high of 7.37 million in February. The layoff rate remains muted, matching the pre-Covid rate in February 2020.
The IBD/TIPP Economic Optimism Index rose one point to 56.4 in April, after jumping 3.5 points in March. It was the fourth straight monthly gain and the highest reading since early February 2020.
GameStop Plans Stock Sale, New Chairman
GameStop (GME) said it could raise up to $1 billion in a stock sale to help finance its digital transformation and strengthen its balance sheet. The mall-based video game retailer said that sales through April 4 climbed 11% year-over-year with a 5.8% increase in February and an 18% jump in March. GameStop plans to make Ryan Cohen, the Chewy.com (CHWY) founder who has pushed for a digital transformation, as its chairman. Shares fell sharply, but are far above levels from before this year’s amazing Reddit-fueled surge.
Cruise Bookings Soar, But When Will CDC Give OK?
Carnival (CCL) said it lost $2 billion during the first quarter, as the coronavirus pandemic keeps travel and vacations muted. But the cruise line operator said booking volumes were roughly 90% higher than in Q4, amid pent-up demand. And it said its cash burn rate was “better than expected.” Earlier in the week, Bloomberg reported the CDC said cruises in the U.S. could come back by midsummer, after Carnival threatened to take business elsewhere. Florida is suing the CDC to allow cruises from the state.
Niu Sales Jump, Expansion Planned
China’s Niu (NIU) sold 149,649 electric scooters in the first quarter, a 273% spike, reflecting a severe pandemic hit to sales in the year-ago quarter. Strength on home turf offset weakness abroad. Quarter over quarter, Niu’s e-scooter sales fell 0.5%, as the coronavirus surged afresh in Europe. Niu will launch a stand-up scooter for international markets and an electric bicycle and electric motorbike for the China, expanding a current lineup of Vespa-like, sit-down scooters. As part of a global expansion bid, Niu could soon supply Indonesian ride-hailing firm Gojek, Reuters recently said.
News In Brief
Tesla (TSLA) sales in China surged to 35,478 in March, including 25,327 Model 3 sedans and 10,151 Model Y crossovers, according to an industry group. On April 2, Tesla reported record Q1 global deliveries of 184,000, well above views.
ConAgra (CAG) reported fiscal Q3 earnings and sales that beat estimates. Its Q4 profit outlook came up short, but the packaged food giant cited strong demand as people continue to dine in during the pandemic.
Simply Good Foods (SMPL), which sells nutrition bars and snacks, reported fiscal Q2 results that beat expectations. Its guided higher for the full year outlook on expectations for “an increase in consumer mobility.”
FibroGen (FGEN) crashed 43% on Wednesday after backtracking key safety data in its application for FDA approval of an anemia treatment in chronic kidney disease patients. The biotech says it can no longer claim its drug, roxadustat, is safer than the standard of care in lowering the risk of cardiovascular outcomes for some patients.
Illumina (ILMN) popped Tuesday after preannouncing 26% revenue gain to $1.085 in Q1. The genomics testing firm boosted full-year guidance, predicting sales will rise 25%-28%.
Levi Strauss (LEVI) topped Q3 forecasts with EPS down 9% to 31 cents, while sales rose 4% to $1.45 billion, the sixth straight quarter of slowing top-line growth. Management predicted fiscal 2019 constant-currency net revenues growth of 5.5%-6%.
General Motors (GM) is pausing production at several North American plants for up to two weeks and extending closures at others due to the global chip shortage affecting the entire auto industry.
WD-40 (WDFC) earnings rose 19% as sales climbed 12% to $111.91 million, both missing. Shares fell Friday.
Scotts Miracle-Gro (SMG) sees adjusted EPS of $8.60-$9 vs. prior range of $8-$8.40. It now expects sales to rise 8%-12% vs. old target of 1%-6%. That reflects improved forecasts for its lawn care segment and its cannabis-related “Hawthorne” segment.
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