The Dow Jones Industrial Average rose while the Nasdaq led, as the stock market rallied despite a surge in inflation. Meme stock AMC Entertainment (AMC) fell hard while GameStop (GME) collapsed. Meanwhile, Microsoft ((MSFT)) and Walgreens Boots Alliance (W(BA)) were among the top blue chip stocks.
Some leading growth stocks passed buy points amid the broad bullish action. Leaderboard stock Adobe (ADBE) and Google parent Alphabet (GOOGL) both staged breakouts.
The Labor Department reported that consumer prices rose 5% from a year ago, the fastest pace since August 2008. Consumer inflation was expected to climb to 4.6%, up from April’s 4.2% year-over-year gain. The consumer price index represents prices for a basket of goods including food, energy, groceries, housing costs and sales.
Oanda senior market analyst Edward Moya said the results mean the Fed can bide its time before raising interest rates, and that “investors realized the punch bowl of stimulus is not going away anytime soon.”
“In fact, stimulus will overflow through the summer as hot inflation in the U.S. still looks transitory and as the ECB (European Central Bank) keeps a faster pace of bond-buying while showing hesitance to begin exit talk,” he said in a note to clients.
Nasdaq Leads, S&P 500 Hits Record
The Nasdaq was once again the leading major index, notching a gain of 0.8%. Orthodontics stock Align Technology (ALGN) performed best, posting a gain of 4.6%.
U.S. Stock Market Today Overview
Last Update: 4:08 PM ET 6/10/2021
The S&P 500 was notable for hitting a closing record high as it gained 0.5%, up almost 20 points. Merck spinoff Organon (OGN) was the top stock here, gaining almost 7% though it remained well off its IPO high of 38.24.
A majority of the S&P sectors closed positive, with health and real estate leading. Financials and industrials were the biggest laggards once again.
Small caps struggled, with the Russell 2000 falling 0.6%. Growth stocks suffered the worst mauling, however, with the Innovator IBD 50 ETF (FFTY) falling 1.7%.
The Dow Jones Industrial Average was the weakest major index, but still closed up 0.1%.
Microsoft kept its momentum going by once again closing among the best performing components. It notched a gain of 1.4%.
The Leaderboard stock is forming a new base, and is eyeing a new buy point of 263.29. It continues to move clear of its 50-day moving average, which is a positive.
However the top Dow Jones stock of the day was Walgreens Boots Alliance, which rose 3.5%. Caterpillar was once again the worst component, slipping almost 4%.
Six Stocks In Buy Zones As S&P 500 Hits High; Tesla Event On Tap
AMC Stock, GameStop Plunge
The meme-stock rally had its bubble burst, at least for one session. AMC stock took a dive, falling around 13%. The stock remains up almost 2,000% for the year, however.
The cinema stock started the year at just 2 a share and is now trading for almost 43. The firm is taking advantage of the spike in interest, announcing June 3 it plans to sell up to 11.55 million shares.
GameStop suffered an even more brutal sell-off. It slid throughout the session, and was down almost 30% by the end of trading. GameStop stock was crushed after the firm said it may sell up to 5 million shares from time to time, in “at-the-market” offerings.
New meme stock World Wrestling Entertainment (WWE) had a better day, gaining almost 1%. It gapped up past a buy point of 61.42 on Wednesday.
The stock closed up almost 11% in mammoth volume Wednesday. The move proved a company that promotes oiled, muscle-bound men parading around in spandex and pretending to fight each other can still succeed in the stock market.
Adobe Stock Passes Buy
Adobe stock broke out of a cup base with a buy point of 525.54. Its buy zone runs up to 551.82. The Leaderboard stock’s relative strength line has been making progress of late.
The cloud software play has earnings next week, but the risk is muted due to the fact it has tended not to move much on results of late. The Long-Term Leader has a top-notch EPS Rating of 96.
Google parent Alphabet is also offering up a new entry opportunity after rising out of a flat base. The ideal entry point here is 2,431.48. The RS line hit a new high, which is a positive. However, the fact volume was below average is a worry.
The internet software giant, which is also on Leaderboard, has very strong earnings, while stock market performance has been strong of late. It is up almost 40% so far in 2021.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
YOU MIGHT ALSO LIKE:
This Is The Ultimate Warren Buffett Stock, But Should You Buy It?
Virgin Galactic’s Branson May Have A Surprise For Bezos
Get Full Access To IBD Stock Lists And Ratings
What’s New In IBD Leaderboard? Check Out Top Growth Stocks Here
These Are The 5 Best Stocks To Buy And Watch Now