The Nasdaq composite made up for a modest underperformance in the new year, as the Nasdaq and other major stock market indexes made record highs.
The Nasdaq rallied 2.6% for its best day since early November. It outperformed other major indexes as the composite benefited from a strong day in the technology sector. Technology Select Sector SPDR (XLK) led S&P sector ETFs with a gain of nearly 3%. The consumer discretionary and energy sectors rose about 2%.
While Thursday’s session was bullish, the stock market may be getting overheated. The Nasdaq is about 7% above the 50-day moving average. That’s a level where it often starts to pull back.
In a day of broad gains, other indexes extended Wednesday’s gains. The S&P 500 added 1.5% and the Dow Jones Industrial Average 0.7%.
U.S. Stock Market Today Overview
Last Update: 4:06 PM ET 1/7/2021
Volume fell from Wednesday’s levels, early figures showed. A powerful gain such as Thursday’s would have been more palatable with higher volume.
Still, breadth was bullish. Advancing stocks led decliners by an 8-to-5 ratio on the NYSE and by nearly 3-to-1 on the Nasdaq.
The Philadelphia Semiconductor Index surged 3.1%.
Techs Lift Stock Market, IBD 50
Cerence (CRNC), which develops artificial intelligence for driving, burst higher about 8%. Advanced Micro Devices (AMD), now extended from an 88.82 buy point, was among several IBD 50 chip stocks up more than 5%.
Innovator IBD 50 ETF (FFTY) jumped 3.1% to a new high.
The pace of breakouts slowed only modestly from Wednesday. Biotech Pacira BioSciences (PCRX) cleared the 68.18 buy point of a cup base. Simulations Plus (SLP) broke out of a cup without handle and ended the day above the 77.92 buy point.
With energy the hottest sector of the New Year, Green Plains (GPRE) broke out above a 17.86 buy point in heavy volume. The ethanol producer is extended from the buy point. It is part of a rally in alternative fuel stocks sparked after Democrats won two U.S. Senate seats in Georgia.
Pensky Automotive Group (PAG) cleared a flat base in more than double its usual volume. Several other auto dealer stocks are breaking out or nearing buy points.
Railroad operator CSX (CSX) climbed above a flat base, although volume was poor.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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