The major indexes extended gains in early afternoon trading while the Nasdaq led with a gain of roughly 2%.
Despite disappointing jobs numbers from payroll services firm ADP, the market pushed higher. Early Thursday, ADP estimated a gain of 128,000 jobs in May. That’s well below the Econoday consensus estimate of 240,000 and below the prior month’s increase of 202,000.
Investors should take note of the report as it could foreshadow Friday’s Labor Department report for May employment growth. The Econoday consensus estimate of nonfarm payrolls is an increase of 325,000 with an unemployment rate of 3.5%. The May job numbers are expected to drop from April’s 428,000 increase.
According to the Fed’s Beige Book release Wednesday, firms are freezing hiring in some districts, which is consistent with the decline in April job openings reported by the Bureau of Labor Statistics. Meanwhile, wage growth is leveling off and not keeping up with inflation.
Nasdaq Leads With 2% Gain
Despite an uncertain economic picture, stocks showed resilience on Thursday. Investors may be thinking a cooling economy will keep the Fed from making more-aggressive rate hikes.
U.S. Stock Market Today Overview
|Last Update: 2:12 PM ET 6/2/2022|
The Dow Jones Industrial Average traded up 0.8% after moving off morning lows, while the S&P 500 gained 1.4%. The small-cap Russell 2000 traded up 1.3%, while the Nasdaq advanced roughly 2.4%. Volume remained lower on the Nasdaq and on the NYSE vs. the same time on Wednesday.
From a technical perspective, the Nasdaq and other indexes are all looking strong as they power off support at the 21-day exponential moving average.
Meanwhile, the Innovator IBD 50 ETF (FFTY) continued with solid gains after last week’s rise of over 9%. The growth-focused index is close to reclaiming its 10-week line after several weeks of trading lower.
Among S&P 500 sectors, materials and consumer discretionary stocks outperformed while utilities and health care lagged.
Oil Stocks: Pipeline Transporter Breaks Out
The Energy Select Sector SPDR (XLE) ETF traded flat despite oil prices climbing about 1.5%. On Thursday, OPEC and other major oil producers agreed to increase oil production by 648,000 barrels a day in July and August, a larger boost than expected. The price of U.S. crude oil advanced to over $117 a barrel.
Pembina Pipeline (PBA) moved above a 41.31 buy point of a flat base. The relative strength line is at new highs, which is bullish for the breakout. But volume remained light, which could be a cause for concern.
Many stocks in the oil and gas field have had strong breakouts in recent weeks, as the industry remains in its own bullish uptrend despite an uncertain market backdrop.
In addition, LNG play Golar LNG (GLNG) and Excelerate Energy (EE), a recent IPO, have topped buy points.
Excelerate Energy edged back above a 29.20 buy point from an IPO base as shares traded higher in decent volume. The stock initially broke out on Wednesday but faded from the buy point. Golar energy briefly moved back above a 26.70 entry. A powerful earnings report last week launched the stock higher, off support at its 50-day line.
As for oil stocks nearing buy points, integrated oil and gas play New Fortress Energy (NFE) traded just 2% below a 49.40 buy point, while its RS line notched a new high. Shares have held well above their 50-day line in recent sessions.
Elsewhere, metal ores miner Teck Resources (TECK) scored a breakout from a 45.03 entry, while the stock’s RS line reached a new high. The breakout occurred in average volume.
Follow Rachel Fox on Twitter at @IBD_RFox for more Nasdaq composite and stock market commentary.
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