Dow Jones Rebounds To Session Highs As Stocks Advance; Is Apple In Buy Range?


Key market indexes held near session highs, despite rising China-U.S. tensions and social unrest in the U.S. The Dow Jones industrials got a lift from Boeing (BA) but Pfizer (PFE) weighed.




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The Nasdaq rose 0.7%, the S&P 500 advanced 0.5% and the Dow Jones industrials added 0.3% in the stock market today. Small caps tracked by the Russell 2000 rallied 1.3%. Volume was mixed, lower on the NYSE but higher on the Nasdaq, vs. the same time Friday.

On Monday, China reportedly asked its state-owned firms to halt purchases of soybeans and pork from the U.S. In January, China agreed to purchase U.S. farm goods as part of the phase-one trade deal between the two nations.

Over the weekend, major U.S. cities were rocked by social unrest, adding further pressure on the U.S. economy in addition to the coronavirus pandemic.

But the stock market shook off an early drop Monday. The recent resurgence in tech stocks has lifted the Nasdaq to a 6% year-to-date gain through Friday’s close. The S&P 500 is down 6% year to date and the Dow is off 11%. Despite a recent rebound, the Russell 2000 remains 16% off its high.

The stock market has been in a confirmed uptrend since the April 2 follow-through for the S&P 500. With Friday’s gain, the Nasdaq is now 3% below its Feb. 19 high. Read The Big Picture for a detailed analysis on daily market action.

Covid-19 Update

Worldwide coronavirus cases have surpassed 6.3 million, with nearly 375,000 deaths, according to Worldometer data tracker. In the U.S., confirmed cases are now above 1.84 million with the death toll topping 106,000. Though the counts continue to rise, daily cases and deaths have held below their respective peaks from April 24 and April 23.

All 50 states have now started to reopen their economies.

But just as states have begun to emerge from lockdown orders, many states have instituted nightly curfews. Some demonstrations protesting the death of an unarmed man in police custody in Minneapolis last week have ended up in looting and rioting to the extent that the National Guard has been activated in more than a dozen states.

The crowded protests have raised concerns of Covid-19 spread. Meantime, as the race for a drug continues, shares of Gilead Sciences (GILD) shed over 3% after reporting mixed results for its remdesivir treatment in patients who are moderately ill with the virus. Shares fell back below the 50-day moving average after regaining the support line on Friday.

Boeing Boosts Dow Jones

Boeing (BA) lifted 4% in volume slightly higher than normal, to lead the Dow Jones index. Shares have rebounded 70% from their mid-March low but remain more than 60% off their 52-week high.

Financial stocks also led the upside among blue chips as American Express (AXP), JPMorgan (JPM) and Goldman Sachs (GS) advanced about 2% apiece. Apple (AAPL), Disney (DIS) and Exxon Mobil (XOM) added more than 1% each.

Apple remains in potential buy range from a 319.79 buy point. It’s extended from a cup-with-handle buy point of 288.35  cleared April 30.

Goldman Sachs is working on the right side of a long cup base. The buy point is 250.56 off the left-side high, unless the stock adds a handle. The correction in the base is a steep 48%, but that’s not unusual given the coronavirus market crash.

But Pfizer (PFE) dived nearly 8% in heavy trade, gapping down below its 50-day line for the first time in nearly two months. It also breached its 200-day moving average. The drug giant reported disappointing Phase 3 trial results for its Ibrance breast cancer drug. Pfizer has been working on a cup-with-handle base with a 39.32 buy point.


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Verizon (VZ) and Cisco (CSCO) gave up about 2% each.

Automakers, airlines and hotel stocks were some of the biggest gainers among IBD’s 197 industry groups. Data storage, oil drillers and medical stocks lagged.

Tesla Races Ahead

In the automaker group, Tesla (TSLA) rallied 6%, racing past an 869.92 buy point of a cup with handle. Volume was barely above average. The strongest breakouts tend to occur in volume at least 40% higher than normal. On Friday, the IBD Leaderboard stock also cruised past an aggressive entry near 828.

Over in the IBD 50, software leaders Zoom Video (ZM) and AudioCodes (AUDC) surged a respective 14% and 6%, both to new record highs. Both stocks are well extended from a buy point, according to MarketSmith chart analysis.

The Innovator IBD 50 ETF (FFTY), which tracks leading growth stocks, rose 1.4% in today’s stock market.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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