The high-tech Nasdaq composite led mixed stock action on Tuesday with a 0.6% lead. The S&P 500 fell 0.3%, while the Dow Jones Industrial Average slipped 0.8%, or 222 points.Among the leaders of the Dow Jones, Apple (AAPL) climbed 1.35%, while Salesforce.com (CRM) rebounded above its 50-day moving average line. Meanwhile, Microsoft (MSFT) briefly jumped to strong earnings after the close, climbing back up to 1.5% in extended trade before falling.
Advanced micro-systems (AMD) fell more than 4% after agreeing to acquire Xilinx (XLNX) in a $ 35 billion all-stock transaction. Xilinx jumped 8.6%.
Stocks in or near buy zones in the stock rally are JD.com (JD), Shopify (SHOP) and Tencent (TCEHY).
Tuesday late, First solar (FSLR) jumped 10% after posting strong results. First Solar’s profits climbed 400% to $ 1.45 per share, with earnings up 70% to $ 928 million. That blew analysts’ views for First Solar’s earnings of 60 cents a share and sales of $ 707.7 million.
JD.com, Microsoft and Tesla are all IBD ranking titles.
Dow Jones Futures today
Late Tuesday, Dow Jones futures fell 0.6% from fair value, while S&P 500 futures fell 0.6%. Nasdaq 100 futures contracts fell 0.5% from fair value. Keep in mind that overnight action on Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular trading session.
Among exchange-traded funds, Innovator IBD 50 (FFTY) rose 0.4% on Tuesday. The Invesco QQQ Trust ETF (QQQ) linked to the Nasdaq 100 traded up 0.8%. Meanwhile, the SPDR S&P 500 ETF (SPY) lost 0.3%.
Amid the coronavirus stock rally, the highly technological Nasdaq is up 27.4% for the year through Tuesday’s close. Meanwhile, the S&P 500 is up 5%, while the Dow Jones is down 3.8% year-to-date, through the October 27 close.
Snapshot of the US Stock Market Today
|Index||symbol||Price||Loss of profit||% Change|
|S&P 500||(0S and P5)||3390,74||-10,23||-0,30|
Last updated: 4:44 PM EST 10/27/2020
According to Worldometer’s data tracking, the cumulative number of confirmed coronavirus cases in the United States approached 9 million on Tuesday. The total number of deaths linked to the virus has exceeded 231,000.
The cumulative total of Covid-19 cases worldwide confirmed since the start of the epidemic topped 44.0 million on Tuesday, with more than 1.16 million deaths linked to the virus.
Coronavirus stock rally
According to IBD’s The Big Picture, the coronavirus stock rally is starting to falter amid recent institutional sales.
Monday’s Big Picture commented that “sellers swept the stock market on Monday, dampening signs of hope from last week and forcing a rethink of market outlook.”
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Dow Jones leader Microsoft smashed Wall Street targets for the September quarter. The company earned $ 1.82 per share on sales of $ 37.2 billion in its fiscal first quarter ended September 30. Analysts were expecting Microsoft to earn $ 1.54 per share on sales of $ 35.72 billion. Shares jumped 1.5% in extended trade before falling.
Microsoft stock closed just above its 50-day line on Tuesday in a gain of 1.5%. The stock is approaching a buy point of 225.31 in a handle cup.
Since the start of the year, Microsoft has been one of the main stocks in the Dow Jones, rising 35.2% through Tuesday’s close.
AMD announced on Tuesday morning its agreement to acquire Xilinx. The $ 35 billion, all-equity deal is expected to close at the end of 2021. AMD said the purchase of Xilinx will strengthen its technology portfolio and create a leader in high performance computing.
The company also reported better-than-expected earnings and sales results on Tuesday.
AMD stock fell 4.1%, still falling below its 50-day line. Xilinx jumped more than 8.5%.
Stocks near purchasing areas: JD.com, Shopify, Tencent
JD.com rose 2% on Tuesday, significantly outperforming major stock indexes. The stock is approaching a cup with 85.49 points buying the handle. The stock is about 3% of the new entry.
According to the IBD rankings commentary, “JD.com’s latest base comes after the Chinese leader erupted with force during the week ended August 21. The new base is the third step, so the next breakout may not be as productive as previous breakouts. ”
JD.com was featured in this week’s Near A Buy Zone Stocks column.
Shopify jumped 4.3% after the company announced a partnership with TikTok to help customers advertise on the Chinese social media platform.
The stock is approaching a buy point of 1,130.10 in a handle cup.
According to IBD inventory control, the SHOP stock enjoys the highest possible composite rating of 99 IBD. Composite rating – an easy way to identify top growth stocks – is a mix of key fundamental and technical metrics to help investors assess a stock’s strengths.
Tuesday’s IBD stock Tencent is just outside the 5% buy zone above a 73.05 buy point on a flat basis. Shares jumped 5.7% on Tuesday after the company received a favorable ruling from the 9th US Circuit Court of Appeals protecting its hugely popular WeChat app from an immediate ban on downloads.
From a bullish standpoint, the stock’s relative strength line is approaching new highs, a sign of strong market outperformance. The RS line measures the performance of a stock’s price against the S&P 500.
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Stock de Tesla
Tesla stock rebounded 1.05% on Tuesday, breaking a two-day losing streak. Stocks are around 15% off their 52 week high as they form new base with a buy point of 502.59. The stock is currently trying to find support for its 50-day moving average line.
According to the IBD Leaderboard commentary, “Tesla now forms an awkwardly shaped base. The shares are extended from the 50 day line. It’s a half position on the standings. “
Dow Jones Executives: Apple, Salesforce
Among the major stocks in the Dow Jones, Apple rose 1.35% on Tuesday, adding to Monday’s slight gain. Stocks are looking to regain their 50-day moving average line. Meanwhile, the stock forms the right side of a new mug base with handle, posting a buy point of 125.49, according to MarketSmith chart analysis.
The blue chip giant is number one in performing Dow Jones stocks for 2020, up 58.8% through Tuesday’s close. Recent addition to the Dow Jones 30 Salesforce is No. 2 with a 54.3% lead year-to-date.
Salesforce jumped 3.4% on Tuesday and is back on the 50-day line.
Stock market rally: what to do next
An uptrend under pressure means investors need to be much more careful, but not just about cash. Watch closely for sell signals. Make sure to sell any stocks that fall 7% or 8% from your purchase price, and maybe even 3% or 4% if you want to raise cash.
Avoid buying stocks for now, unless the breakout is exceptionally good. The best candidates are those who have proven to be the most resilient during the recent stock market weakness. Keep a close eye on stocks with strong lines of relative strength. These ideas could become stock market leaders.
Use MarketSmith features like RS Line Blue Dot to easily spot these candidates for action. The RS line blue point is assigned to stocks whose RS lines reach new highs as the action is basing or bursting.
Stocks to watch include the long-term leaders of IBD, companies with stable earnings growth and price performance.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and Dow Jones futures.
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