The major stock market indexes were slow to start the week, making only minor moves in the first hour of trading. Saudi Arabia announced additional oil production cuts over the weekend, lifting oil stocks.
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Crude oil eased off from earlier gains, up 0.4% to $72.06 per barrel after Saudi Arabia said Sunday it would cut an additional one million barrels of oil a day starting in July, due to slowing demand. The cut takes production from 10 million barrels to 9 million per day.
The Nasdaq gained 0.1%. The Dow Jones Industrial Average dipped 0.2%. The S&P 500 also inched up 0.1%. The Russell 2000 fared worse than the major indexes, dropping 1.7%.
The First Trust Nasdaq 100 Equal Weighted ETF (QQEW) trimmed 0.3%.
The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) rose 0.3%. And Innovator IBD 50 ETF (FFTY) pulled back 0.5%.
NYSE and Nasdaq volume fell vs. the same time Friday.
Gold futures edged up 0.2% and remained below the psychological $2,000-per-ounce level. The price of Bitcoin, meanwhile, shed 2.1% to $26,820.
President Joe Biden signed the debt-ceiling bill on Saturday. The bill raises the debt limit until 2025 and after the presidential election. The borrowing/debt limit now sits at $31.4 trillion.
The 10-year U.S. Treasury yield shedding 3 basis points to 3.68%. The CME FedWatch tool shows nearly 80% odds for no rate hike at the June Federal Reserve meeting, and the remainder of Fed watchers expect a quarter-point rate hike.
European stocks were mixed, with the German DAX inching lower 0.5% while the Paris CAC dropped 0.8%. The London FTSE eked out a 0.1% gain in afternoon trading.
Stock Market Movers: Oil Stocks Gush Higher
Circor International (CIR) surged 50% after announcing it will be acquired by KKR (KKR) for $1.6 billion including debt, confirming an earlier Wall Street Journal report. Circor makes pumps, valves and fluid-control products for industrial, aerospace and defense industries.
Shares gapped up past the 32.12 buy point of a cup base. Circor reported better-than-expected first quarter earnings and sales on May 11. Quarterly profit grew a whopping 960%, up from 7% and 103% in the prior two quarters. Sale growth ticked up to 9% from 5% and 3%.
Analysts expect 13% full-year EPS growth this year and 21% in 2024.
Oil and gas stocks got a boost from the Saudi Arabia oil news but have trimmed gains, with Occidental Petroleum (OXY) rising 0.3%, Exxon Mobil (XOM) now flat and Dow stock Chevron (CVX) adding 0.2%.
IBD 50 stock Cloudflare (NET) fell 3.8% after UBS initiated coverage with a sell rating and a price target of 55. The software-as-a-service cloud application stock remains in the 5% buy zone of a double-bottom-base with a 66.30 buy point.
Stock Market Movers: Palo Alto To Join S&P 500
Cybersecurity giant Palo Alto Networks (PANW) got a 3.5% lift on news it will be added to the S&P 500 before the market open on June 20, as part of a quarterly rebalancing for the S&P indexes.
PANW will replace Dish Network (DISH), which fell 1.3% on the news, while Palo Alto hit an all-time high.
Science Applications International (SAIC) gained 3.1% after reporting higher-than-expected fiscal first quarter earnings and sales. It also raised its full-year 2024 profit and revenue guidance.
Epam Systems (EPAM) sank over 18% after reporting it Q1 earnings and lowering its Q2 and full-year 2023 revenue and profit guidance, citing lower demand.
The stock fell below its 50-day line as a correction deepened. Epam is on pace for its largest one-day decrease since Feb. 28, 2022, and is the S&P 500’s biggest loser today.
Dollar General (DG) fell 2.2% after Morgan Stanley downgraded the discount retailer to equal weight from overweight and cut the price target to 180 from 235.
Biotech Stocks Make Big Moves
ImmunoGen (IMGN) popped 6.9% in heavy volume on an update that its Elahere ovarian cancer treatment reduced cancer progression by 35% or death versus chemotherapy treatment in a phase 3 study.
Canaccord Genuity raised its price target to 19 and maintained its buy rating on the biotechnology stock. Shares skyrocketed 135% on May 3 after the company initially announced results from its Phase 3 trial of Elahere.
Day One Biopharmaceuticals (DAWN) rallied 12% in very heavy volume, after reporting positive data on its treatment for pediatric low-grade glioma, which causes brain and nervous system tumors.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
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