Stocks Jump; Amazon Gets Buffett Boost, April Jobs Surge - Investor's Business Daily

Stocks popped out of the starting gate Friday, with a strong push from earnings news and a blow-out April jobs report.

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The Nasdaq led the early advance, up 1% shortly after the starting bell. The Dow Jones industrials climbed 0.5% and S&P 500 rolled up a 0.6% gain.

MercadoLibre (MELI) and Monster Beverage (MNST) topped the Nasdaq, surging on earnings news. Weight Watchers (WW), Adidas (ADDYY) and Universal Display (OLED) also posted powerful early gains on earnings results. Arista Networks (ANET) led the downside, tanking nearly 18% on weak second-quarter sales guidance.

Amazon.com (AMZN) climbed more than 2%, leading its FANG stock peers in early trade, after a boost from Warren Buffett. Marijuana stocks were in motion, with Canopy Growth (CGC) and Tilray (TLRY) surging in early action. Beyond Meat (BYND), which spiked in its Thursday initial public offering, traded sharply higher early Friday.

Chip stocks were mixed Friday, with Cree (CREE) and Taiwan Semiconductor (TSM) rising in morning trade. The iShares PHLX Semiconductor ETF (SOXX) dipped just below the breakeven line, giving it a 0.8% gain so far for the week.

Jobs Growth Soars; Services Data Mixed

U.S. non-farm payrolls swelled by 263,000 new workers in April, the Labor Department reported Friday. That was a full 34% above March's 196,000 new hires, confounding estimates for a drop to 189,000 hirings. Business services, construction and healthcare saw the largest growth, while manufacturing, retail and mining remained largely flat.

The unemployment rate slipped to 3.6%, from 3.8% in March. Average hourly earnings ticked up 0.2%, vs. a 0.1% increase a month earlier. The labor participation rate eased to 62.8%, from 63%.

Markets received a mixed dose of economic news just after the open. Researcher Markit reported the reading for its April services purchasing managers index decreased to 53. That was down from 55.3 in March, while holding just above expecttions for a drop to 52.9.

The Institute For Supply Management reported its April Non-Manufacturing ISM easing to 55.5 for the month, down from 56.1 in March and disappointing forecasts for an increase to 57.3.

Federal Reserve officials could provide some impact on afternoon trade, with speeches scheduled from Chicago Federal Reserve Bank President Charles Evans, Fed Vice Chairman Richard Clarida, New York Federal Reserve President John Williams and Fed Governor Michelle Bowman before the market's close.

Amazon Rises On Berkshire Stake

Amazon climbed 2%, retaking some ground after a four-day decline. Warren Buffett told CNBC Thursday that Berkshire Hathaway (BRKB) established a new stake in the e-commerce, cloud services giant.

Amazon shares touched their highest level since October on Monday. The stock has formed a seven-month cup base with a 2050.60 buy point. This week's pullback leaves the stock chart one day shy of a handle on that base pattern, which could potentially lower the buy point to 1956.44. The IBD Leaderboard stock also cleared an earlier entry for aggressive investors at 1736.51.

MercadoLibre Enters Gap-Up Buy Zone

Latin America e-commerce giant MercadoLibre rocketed 14% higher after reporting its first profit in six quarters. Earnings rose 145%, sales surged 48% — both above analyst targets. The stock had pulled back to test support at its 10-week moving average after a run-up that followed an February breakout.

MercadoLibre's big earnings gap-up set up a breakaway gap buying opportunity, beginning at the stock's opening price of 541.85.

Nasdaq, S&P 500 Pause At Prior Highs

The stock market slipped into May, after a strong April, with the Dow Jones Industrial Average down 0.9% for the week heading into Friday session. The Nasdaq is off 1.4%, and the S&P 500 is toting a 0.8% decline.

All four of the top stock market indexes rose for a fourth straight month in April. The Dow gained 2.6% for the month, the Nasdaq jumped 4.7% and the S&P 500 grabbed a 3.9% gain. That moved the Nasdaq and S&P 500 briefly to new highs early in the week. The Dow Jones industrials ended Thursday 2.4% below its October high.

The current stock market uptrend remains in good standing, logging a technical distribution day on Thursday, but flashing a number of bullish signals.

For more detailed analysis of the current stock market and its confirmed uptrend, study the Big Picture.

IPO Watch: Beyond Meat, Jumia Rise, Warrior Dives

Stock market newbie Beyond Meat spiked nearly 7% in early action. The maker of plant-based meat products soared 163% in its first day of trade on Thursday. IPOs can be highly volatile on both the up and down sides. Investors should wait until the stocks form a valid IPO base, which provide entry points that help reduce downside risk.

O'Neil Manager: Debut Of Google A 'Picture Perfect' IPO Template

Jumia Technologies (JMIA) traded 5.3% higher early Friday. The Germany-based e-commerce website tumbled more than 13% on Thursday, ending the session 23% below a 49.87 buy point in its IPO base. Shares are up 181% from their April 12 initial offering price.

Warrior Coal (HCC) tanked 12% in opening trade. The stock swung wildly Thursday, dropping more than 8% early, then ending 4.6% higher after its first-quarter report. Shares are up 73% from their April 2017 IPO.

Oil Prices In Flux

Oil prices remain on watch, after diving amid mixed news on Thursday. Energy stocks sold off as West Texas Intermediate swooned more than 3% to settle back below $62 a barrel. Rising U.S. stockpiles were widely cited as the cause for the price drop, even as expiring Iran oil purchase waivers should, in theory, have forced prices higher.

The Trump administration allowed the waivers to expire, putting China, India and six other nations in violation of U.S. sanctions if they purchase oil from Iran. The administration says it will attempt to drive Iran's oil exports to zero, and analysts are forecasting oil exports out of Venezuela — also under U.S. sanctions — are at risk of total collapse.

WTI oil prices inched higher Friday, up a fraction to $61.85. Europe's Brent crude benchmark eased a few pennies, to trade at $70.69 a barrel. The Citigroup Global Markets VelocityShares 3x Long (UWT) gained 1.6% in early trade.  The United States Oil Fund (USO) was up 0.5%.

Oil prices may see some impact from BakerHughes (BHGE) weekly rig count survey, due out at 1 p.m. ET.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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2019-05-03 14:15:00Z
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