Stock Market Heads Into Christmas Break With More Gains; 3 Stocks Top Buy Points; A $6 Bil Deal In Health Care

The stock market headed for the Christmas break with additional gains, while a few more top-rated stocks cleared buy points and indexes improved their charts.

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The Nasdaq composite climbed 0.3%. The index closed just above its 50-day moving average Wednesday and padded some space above it with this morning’s gains.

The S&P 500 and Dow Jones Industrial Average each added 0.5%. Both stock indexes today also are rising above their 50-day lines. Volume rose on the NYSE and fell on the Nasdaq compared with the same time on Wednesday.

All S&P sector ETFs were higher. Industrial Select Sector SPDR (XLI) led with a 1.2% gain. The ETF is back above its 200-day moving average.

Stock Market Greets Economic Reports

Several economic reports came out this morning and were mainly positive.

Durable goods orders rose 2.5% in November, above the consensus 1.5% forecast in Econoday. It was also an improvement over the prior month’s paltry 0.1% increase. Excluding aircraft and other transportation orders, durable goods climbed 0.8%, also above views.

Initial claims for jobless benefits last week totaled 205,000, in line with estimates and still around historic lows.

Personal spending edged up 0.6% in November. While the number met forecasts, it was a slowdown from October’s revised 1.4% increase.

The entire increase reflected higher prices, Sal Guatieri, senior economist at BMO Capital Markets, said in an analysis. Personal incomes rose 0.4%, a bit below the Econoday consensus estimate. A slightly bigger gain in wages and the expanded child tax credit contributed to the increase, Guatieri said.

Stock Market Digests Health Care Deal

Quidel (QDEL) plunged 15% after the company announced it will acquire Ortho Clinical Diagnostics Holdings (OCDX) in a cash and stock deal valued at about $6 billion, or $24.68 a share. The offer represents a 25% premium over Ortho’s closing price on Wednesday. Ortho shares gapped up to a 7% gain.

Quidel, a diagnostics company whose products includes Covid tests, says the deal for Ortho, one of the world’s largest in vitro diagnostics companies, will enhance its overall business.

Innovator IBD 50 ETF (FFTY) climbed 0.7% as it seeks its third straight advance.

West Pharmaceutical Services (WST) rose above the 458.09 buy point of a cup with handle base. Volume was light and the relative strength line lags, raising questions about the breakout.

Customers Bancorp (CUBI) climbed back above the 61.58 buy point after dropping below it the past three days. KLA (KLAC) added 1.6% and continues to rise from support at the 10-week moving average.

Tradeweb, Applied Materials Act Well In Today’s Stock Market

Tradeweb Markets (TW) also is finding support at the 10-week moving average after a controlled decline to the line. It added 2% Thursday morning and is in a buy zone.

Also keep an eye on Applied Materials (AMAT). The chip stock is nearing the 159.10 buy point of a flat base.

Outside the IBD 50, two more stocks rose past buy points. CDW (CDW) broke out of a cup-with-handle base. It is in buy range from the 200.63 buy point to 210.66. Volume was above average, but not impressive.

Service Corp. International (SCI), an operator of cemeteries and funeral services, edged past the 70.13 buy point of a flat base. Shares dipped below the buy point although volume was heavy.

The stock market and other U.S. financial markets will close on Friday for the Christmas holiday.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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