Stock Market Continues Rebound As Nasdaq Jumps Nearly 2%; Energy, Solar Lead The Way

The stock market continued its rebound Thursday, led by the Nasdaq composite. Investors watched jobless claims rise in the hope that more people leaving work will bring inflation numbers down. Energy and solar stocks led the markets.

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The Nasdaq jumped 1.9%, the S&P 500 rose 1.1% and the Dow Jones Industrial Average added 0.7%. Small caps led the stock market as the Russell 2000 rose 2.4%.

Volume fell on the Nasdaq and the NYSE compared with the same time on Wednesday.

Rising Jobless Claims Indicate Economy Is Slowing Down

The number of jobless claims rose to 235,000 from 231,000 the previous week, according to the U.S. Labor Department. Economists polled by Econoday had forecast 230,000. The numbers showed that growth in the labor market is slowing down.

“It’s never a good thing to see layoffs, but the pressure on wages may have now peaked,” said Jamie Cox, managing partner for Harris Financial Group. “A few more weeks of these types of numbers and maybe, just maybe, financial conditions are tight enough to allow the Fed to throttle back on the scale of rate increases.”

Meanwhile, the yield on the 10-year Treasury note climbed 7 basis points to 3.0%, climbing back above 3% for the first time since June 30.

The price of U.S. crude oil rose went back above $100 a barrel, jumping more than 5% to $103.80. The Energy Select Sector SPDR (XLE) led S&P sector ETFs with a 3.8% increase.

All S&P sectors were up, except for consumer staples and utilities, which dipped 0.3% and 0.1%, respectively.

Energy And Solar Stocks Lead Stock Market

Solar and coal stocks led the energy sector. IBD 50 stock Daqo New Energy (DQ) jumped more than 12%.

Enphase Energy (ENPH) climbed more than 6%. Coal stocks Arch Resources (ARCH) and Alpha Metallurgical (AMR) soared more than 8% as it tries to break a steep downtrend.

In heavy construction, Quanta Services (PWR) jumped nearly 4% and is back above its 50-day moving average as it forms an imperfect cup-with-handle base.

Innovator IBD 50 ETF (FFTY) rose more than 1.4%. IBD 50 stock Funko (FNKO) climbed 2% past its buy point as it prepares to display its toys and collectibles at Comic-Con this month. With its relative strength line already hitting a new high, Funko has just cleared a 25.18 buy point in a cup with handle. The stock remains within the buy zone, and trades well above its 50-day moving average.

GameStop (GME) gained nearly 13% on news of a 4-for-1 stock split scheduled for later this month.

Health Care Sector Continues To Surge

In health care, two stocks topped buy points.

Cigna (CI) broke out of a base in heavy volume. The managed care provider topped its 273.67 buy point and is in a buy range to 287.35. Halozyme Therapeutics (HALO) surged past a 48.68 buy point in big volume. It’s in a buy zone to 51.11.

IBD Leaderboard stock Evolent Health (EVH) is in buy range past a 33.24 buy point in a cup with handle following Wednesday’s 4.5% breakout move. Evolent shares gained 2.7% Thursday.

Merck (MRK) is in advanced talks to acquire Seagen (SGEN) in a deal that could be worth roughly $40 billion. Seagen shares rose 2.2%, while Merck was down 0.2%.

Tesla (TSLA) stock gained more than 4% Thursday but was still sharply below its 50- and 200-day moving averages. Tesla stock traded as high as 1,243.49 on Nov. 4.

Follow Michael Molinski on Twitter @IMmolinski

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