Stocks jumped at Thursday's open, with a surge in big tech names and drugmakers spurring an optimistic start.
The Nasdaq composite leapt 0.5% to take out another new high. Facebook (FB), Alexion Pharmaceuticals (ALXN) and PayPal (PYPL) led a long list of tech names pulling higher on strong quarterly results. The S&P 500 added 0.1%, while the Dow Jones industrial average jumped 0.2%, also seizing a new high.
Facebook, Paypal, Alexion and Merck Set Early Pace
Earnings news was the front-and-center factor in premarket action Thursday, with names including LendingTree (TREE), NetGear (NTGR) and Anheuser Busch (BUD) all in steep ascent after their quarterly reports.
Among the heavy lifters, Facebook thundered up 5% at the start of trade, opening well into new highs after reporting a broad second-quarter win after Wednesday's close. A 69% EPS gain and a 45% increase in revenue topped analyst targets, and the company reported daily active users up 17% to 1.32 billion, and a 47% surge in ad revenue, to $9.16 billion.
Facebook, an IBD 50 stock, extended after a rebound from support at the stock's 10-week moving average, and more than 20% above a 129.37 buy point in January breakout.
Paypal jumped more than 2% after its second-quarter results. Earnings rose 28%, revenue climbed 18%, topping analyst forecasts, and management boosted its full-year EPS and revenue guidance to above consensus targets. The IBD 50 stock is extended above a 55.24 flat base buy point after following a July 12 breakout.
Apple (AAPL) and two of Facebook's three other FANG stock cohorts gained ground at the open. Amazon (AMZN) rose 1.3% and will remain a stock to watch today, exiting its buy range above a 1016.10 buy point ahead of its second-quarter report, due out after the close.
Not all tech was cheery. Twitter (TWTR) tanked 13% after reporting its Q2 revenue and earnings slipped less than expected, but quarter-over-quarter growth in monthly active users stalled. The stock had mustered a 39% rally off an April low, through Wednesday's close, but Thursday's loss sent shares crashing back below the stock's 10-week moving average.
Facebook and Alexion led the S&P 500 stocks. Alexion spiked 6% on a strong second-quarter performance that saw earnings jump 38% on a 21% gain in sales. Alexion shares ended trade Wednesday up 36% from a late May low and back above key levels of support.
On the Dow, Merck (MRK) set a high early bar, vaulting more than 3% after announcing a strategic collaboration with AstraZeneca (AZN) to develop immuno-oncology cancer treatments around the Lynparza drug. The two companies agreed to equally share development and marketing costs, as well as profit. AstraZeneca shares skidded 15% after the drugmaker reported stronger-than-forecast Q2 results, but said its lung cancer treatment Mystic did not meet targets in a phase 4 clinical trial.
On the IBD 50 list, China-based TAL Education (TAL) chalked up a 2% advance. The after-school tutoring and test preparation chain reported a solid fiscal first-quarter beat, including a 62% increase in student enrollments, and guided Q2 revenue above analyst targets. Shares are extended above a flat base buy point of 134.10.
TAL peer New Oriental Education & Technology (EDU) slipped 1%, sending shares back below an 82.72 handle buy point.
F5 Networks (FFIV) and Bristol Myers (BMY) impeded the S&P 500's early progress. F5 dived 8% after a mixed Q2 report. Bristol Myers dropped 7%, despite solid second-quarter results, on concerns over its lung cancer treatment following the Mystic announcement from AstraZeneca.
Oil Holds; Durable Goods, Jobless Claims Rise
Durable goods orders surged 6.5% in June, the Commerce Department reported, blowing past economist expectations for a 3.5% increase. May's decline in orders was revised from 1.1% to 0.1%. But most of the surge was in aircraft and other transportation items. Capital goods minus transportation eked up only 0.1% for the month, down from May's 0.2% increase and well below views for a 0.4% gain.
First-time unemployment claims jumped to 244,000 for the week ended July 22, the Labor Department reported. That was up from 234,000 in the prior week, outpacing expectations for an advance to 240,000 claims.
Oil prices took a breather after surging 7% in a three-day rally. West Texas Intermediate inched up 0.1% to trade at $48.81.
Asia's markets posted strong gains Thursday, but markets in Europe slipped in and out of mixed trade in their afternoon session.
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