The stock market continued its upward march Thursday afternoon, responding to the White House's delay in imposing tariffs on Chinese goods and to the European Central Bank's rate cut and stimulus efforts. Joining Thursday's afternoon leaders were hardware retailer RH (RH), formerly known as Restoration Hardware, and yoga and athletic wear retailer Lululemon (LULU).
XThe markets moved on news from both abroad and here in the U.S. First came the White House announcement that the U.S. will put off planned tariffs on Chinese goods while the two sides negotiate in coming weeks. In Europe, markets rose on the ECB's move to cut rates and to begin buying $22 billion in bonds a month to boost the EU's regional economy.
Attention now turns to the U.S. Federal Reserve, which is widely expected to cut interest rates when it meets next week. Fed funds futures indicate an 88% probability of a quarter-point cut, but just over 11% probability the Fed will do nothing.
Among the major stock market indexes, the Dow Jones Industrial Average rose 0.4%, nearing its record high set on July 16 of this year. The tech-heavy Nasdaq increased 0.6%, while the S&P 500 added 0.5%. The recently resurgent Russell 2000 Index dipped in late trading.
Volume was little changed on both the NYSE and Nasdaq.
Retailers got a boost from rate-cut talk, with RH jumping 2.3% and Lululemon gaining 1%. Among other retail names, discount giant Walmart (WMT) added 0.8%, home improvement titan Home Depot (HD) rose 0.9%, and retailer Kroger (KR) eased slightly after being up much of the morning. It reported better-than-expected earnings early Thursday.
A Boost From Rate Cuts
Along with retailers, credit card companies, including Visa (V) (+2%), Mastercard (MA) (+2.5%), American Express (AXP) (+1.4%), and Discover Financial Services (DFS) (+0.6%), all rose on the news. Visa and Discover are both on the IBD 50 list.
Visa, trying to end three days of price drops, is struggling to regain its 50-day moving average line after a breakout past a 184.17 buy point failed. Meanwhile, Discover, with a 96 Composite Rating according to IBD Stock Checkup, briefly broke out above an 82.61 buy point from a cup base in late July, but fell back and is now consolidating under a new 93.08 entry.
Closely related payment facilitators showed solid gains. Brazil-based PagSeguro (PAGS), No. 2 on IBD's Top 50 list with a 99 Composite Rating and a 98 EPS Rating, jumped 5.4% after plunging nearly 16% in the first two days of trading this week. With the rebound, PagSeguro stock regained its 50-day moving average, a crucial test for the 2018 IPO.
Stock Market News: Payments Providers Jump
U.S. payments app PayPal (PYPL), another IBD 50 name, rose 3.6%. It too broke down earlier this week, briefly falling below its 200-day moving average. Thursday's gain put it back above that line and it's now struggling to reclaim the 50-day average line. According to MarketSmith chart analysis, PayPal has an 86 Composite Rating and a sizzling 99 EPS Rating. Its RS Rating, however, is a mediocre 63.
And Global Payments (GPN), a member of IBD's Mid-Cap 20 list, gained 1.7% as it seeks to recover from a recent drop. On Sept. 5, the stock cleared a 172.30 buy point over a flat base, only to fall back below that entry this week. Global Payments is set to merge with the smaller Total Systems Services (TSS) in Q4.
Meanwhile, Apple (AAPL), IBD's Stock of the Day and added to LeaderBoard on Wednesday after breaking out, gained another 0.7%. It remains in a buy zone above its 221.47 buy point out of a flat base.
Among exchange traded funds, Innovator IBD 50 ETF (FFTY), near the bottom of an 11% deep flat base, gained 1.1% as it moved back above its 200-day line.
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