Stocks staged a mixed open Tuesday, after a night in which civil unrest broadened across U.S. cities, despite warnings from President Donald Trump that lawlessness could trigger U.S. military intervention. Zoom Video soared ahead of its earnings report. A number of China stocks and some retailers showed early strength. American Express rallied the head of the Dow Jones today.
The Dow industrials cranked out a 0.3% gain at the starting bell, while the S&P 500 crept up 0.1% and the Nasdaq opened down a fraction on the stock market today. Overseas trade was strong on Tuesday as the U.S. and China kept a lid on simmering tension. Asia’s markets posted firm gains. Markets in Europe were sharply higher in afternoon trade.
United Airlines Holdings (UAL) again topped the Nasdaq 100, up 3.8%, while the U.S. Global Jets ETF (JETS) jumped 2.8%.
Also on the Nasdaq, Zoom Video Communications (ZM) phoned in a 1.7% gain ahead of its first-quarter results scheduled for after Tuesday’s close. The high-flying provider of teleconferencing tools logged a 13.8% surge on Monday.
Netherlands-based ASML Holding (ASML) added 0.8%. The chip equipment maker ended Monday in a buy range, above a 319.32 buy point in what IBD MarketSmith chart analysis plots as a 13-week cup base.
The top of the S&P 500 showed a healthy mix of retail, travel and oil-related stocks. Western Union (WU) soared 12% to lead the index, after reporting that its digital transactions increased 39% in April and 51% in May. Consumer-to-consumer transactions continued to recover from a 30% year-over-year drop in March, with May’s activity recovering to 7% below year-ago levels.
Gear up for Tuesday’s market action by reading IBD’s Investing Action Plan.
IBD 50: GSX Techedu Leads
China-based GSX Techedu (GSX), which provides K-12 tutoring services, rallied 7.3% to top the IBD 50 list. The stock could be shaping a double bottom base with a 42.35 buy point. Shares ended Monday 211% above their June 2019 initial public offering. GSX has, since mid-May, faced fraud claims from short-seller Muddy Waters.
Tutoring peer TAL Education (TAL) broke out Monday above a handle buy point at 57.82. The IBD 50 stock rose 1.1% early Tuesday.
China-based e-commerce play Baozun (BZUN) spiked 14% on earnings. Baozun is not an IBD 50 name.
Dow Jones Today: Exxon Follows Oil, Boeing Bounce Continues
Chemicals maker Dow (DOW) bolted 3.2% higher to lead the Dow Jones today. American ExpressAXP notched an early 2.8% advance.
Boeing stock jumped 2.4%, as it looks to pad its cushion above its 50-day moving average and add a third week to its advance.
RH Trips Early Retail Rally
Retail stocks received a couple of early boosts. RH (RH), the old Restoration Hardware, spiked 7.6% after the Chairman and Chief Executive Gary Friedman’s annual letter to shareholders said the company expected “operating margins to expand in 2020 despite the current setbacks from COVID-19, and now see a clear path to 20% operating margin over the next few years.”
Gap (GPS) jumped 2.5%. Nordstrom (JWN) logged a 0.6% gain. Dick’s Sporting Goods (DKS) rallied 1.9%, despite reporting a wide first-quarter earnings miss. The company withdrew its full-year guidance.
Coronavirus Update: The Last Lockdown
Coronavirus cases worldwide rose above 6.388 million, with total deaths from the virus now at 377,883. The share of the cumulative total from European Economic Area countries slipped to 21.9%, less than half of its more than 44% share at the start of April, according to data from the European Center for Disease Prevention and Control.
The EEA has seen 165,055 coronavirus deaths — 43.7% of the global total. As of Sunday, the five-day average of new cases decreased in the U.K., Belgium, Italy and Spain, according to the Johns Hopkins Coronavirus Resource Center.
Confirmed coronavirus cases in the U.S. approached 1.86 million, Worldometer data shows, with the total number of deaths at 106,927. That is 29% of the global case total, and 28.3% of the global death total. New York, New Jersey and California continue to identify just under 1,000 new cases per day. Massachusetts and Texas are among the states that are ahead of that pace.
New Jersey is the final state under a stay-at-home rule in place. It will move into stage one of its reopening plan after the lockdown order lifts on Friday. All other states are now in various stages of economic restarts.
However, many of those restarts are occurring on a region-by-region, or county-by-county basis within those states. In New York, the western portion of the state enters its phase one reopening today, with the Capital Region around Albany set to move into stage two on Wednesday, pending review by health officials. New York City is, at this time, scheduled to enter phase one of its restart on June 8.
Testing in the U.S. continues to rise, with more than 400,000 tests administered for a fourth-straight day on Monday. That lifted the 10-day average to 396,043 tests, vs. a 10-day average of 239,453 tests at the start of May.
Dow Jones Today: 3 Dow Leaders In Buy Ranges
The Dow Jones today looks to extend its advance to a third day, and is sitting atop a two-week run-up. The index is still down 10.7% for the year, while the S&P 500 has narrowed its year-to-date loss to 5.4%, and the Nasdaq has plowed a 5.8% advance.
As the stock market’s confirmed uptrend continues, the S&P 500 is proving itself for a second week at its 200-day moving average. The Dow is climbing toward its own 200-day test, trading a bit more than 3% below that line on Tuesday.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Chart action among the Dow’s blue chips continues to show encouraging recoveries. Visa (V) remains extended beyond a buy point. Home Depot (HD) continues to hover just below a 247.46 buy point.
Apple (AAPL) is in a buy range after retaking a 319.75 buy point on Monday. Microsoft (MSFT) is also in a buy range, which runs through 189.10. UnitedHealth Group (UNH) is sitting on a six-day advance. It’s in a buy range that runs to 319.31, above a cup-with-handle buy point at 304.10.
Microsoft, Apple and UnitedHealth are IBD Leaderboard stocks.
Protests: Trump Invokes Insurrection Act
Governors called up National Guard troops in 23 states as protests spread to a reported 350 cities and towns across the U.S. Protests, many of which turned violent, were set off by the Memorial Day killing of George Floyd in Minneapolis. Floyd was an unarmed black man, the most recent in a string of killings of unarmed blacks by police.
Protestors defied curfews in New York and Washington D.C., according to the Wall Street journal. President Trump said he was deploying thousands of National Guard troops and law enforcement officers to manage protect and protect federal buildings and national monuments, including the White House. Guard troops had reportedly not yet been called out as of Monday night.
“These are not acts of peaceful protests. These are acts of domestic terror,” Trump said, according to the Journal. Trump also said the 7 p.m. to 6 a.m. curfew that Washington, D.C. Mayor Muriel Bowser imposed on the city will be strictly enforced.
Trump also told states’ governors in a call on Monday that he would invoke Insurrection Act privileges in order to maintain order in U.S. cities.
“If a city or state refuses to take the actions that are necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them,” he said.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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