While the NASDAQ languished after less-than-spectacular forward guidance from Nvidia (NVDA) - which is now the poster child for the term "priced to perfection" - Dow Industrials took up market slack and powered ahead, ending the day just 427 points (less than one percent) from the all-time closing high of 44,293.13 (November 11, 2024), powered by gains in IBM (IBM) and Salesforce (CRM).
The day's gains on the Dow turned the week completely around for the index of 30 blue chip stocks. After Wednesday's close, the Dow was down around 35 points. Thursday's effort changed that small loss into a large gain.
That helped it catch up to the NASDAQ, which is ahead by 292 points on the week, heading into Friday. The S&P also shrugged off the losses from last week and has posted a positive number every day this week, up 78 points through Thursday's closing bell.
A pair of mid-tier retailers posted third quarter results after the close on Thursday, both companies reporting a strong quarter and superior guidance heading into the holiday shopping season.
The Gap (GAP), with a major online presence accounting for 40% of all sales, and more than 3,600 stores in 40 countries, showed net income of $274 million, translating into diluted earnings per share of 0.72. Those numbers compared favorably with year-ago figures of net income of $218 million and EPS of 0.59.
President and CEO, Richard Dickson exuded confidence, saying, "holiday is off to a strong start and we remain focused on executing with excellence in the fourth quarter. Our performance year-to-date gives us the confidence to raise our full year outlook for sales, gross margin and operating income growth."
Shares of The Gap were up nearly seven percent on Thursday and are indicated up another 17% heading into the Friday cash session. The stock, which has a very low beta, a PE ratio hovering around 10, and a 52-reek range from 18.34 to 30.59, closed Thursday at 22.04.
Shares of Ross Stores (ROST) were also being favored after the company posted net earnings of $489 million and EPS of $1.48, raising its full-year outlook to $6.10 to $6.17 per share. The stock was up more than 2.5% on Thursday and is tacking on another seven percent prior to Friday's opening bell.
Year ago returns were EPS of 1.33 on net of $447 million.
The mood wasn't quite so cheery over at Intuit (INTU), which topped estimates for the quarter, but issued lowered guidance, with some trepidation over fears of the incoming Trump administration offering a free federal government tax reporting app or simplifying the tax code to a point at which Intuit's software would be unnecessary. The company reported earning of 2.50 per share, ahead of estimates for 2.36.
Shares are down nearly three percent an hour prior to the opening bell. Intuit is a prime example of just how overpriced tech stocks have become. Yahoo Finance shows a PE ratio of 66 on this 30-year old company. Normally, such high PE ratios are reserved for startups expected to grow at exponential levels, but these days, mature companies like Apple (AAPL) and Microsoft (MSFT) are sporting PE ratios in the 30s and higher.
Elsewhere, gold continues to rally steadily following a post-election dive, hitting $2,712 overnight. Silver, which has lagged its more expensive cousin, seems to be perking up, continuing to trend close to $32 per ounce.
The rally in WTI crude oil was short-lived, topping out at $70.65 per barrel on Thursday, but slipping back below $70 Friday morning.
Futures are pointing to an even open, with equities close to the UNCH line.
At the Close, Thursday, November 21, 2024:
Dow: 43,870.35, +461.88 (+1.06%)
NASDAQ: 18,972.42, +6.28 (+0.03%)
S&P 500: 5,948.71, +31.60 (+0.53%)
NYSE Composite: 19,968.30, +219.17 (+1.11%)
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