Dow Jones futures, along with S&P 500 and Nasdaq 100 futures, were lower early Wednesday after the stock market rally set more record highs. Dow Jones leader Apple hit a new buy point, while Tesla neared all-time highs. Chinese EV leaders Nio and Xpeng Motors dived over 10% each, while Nikola plunged nearly 15%.
Tech giants Advanced Micro Devices, Facebook, PayPal and Taiwan Semiconductor are in or near buy zones.
The Dow Jones Industrial Average advanced 0.6%, or 185 points. The S&P 500 rallied 1.1%, while the tech-heavy Nasdaq composite moved up 1.3%. The S&P 500 and Nasdaq notched more all-time highs.
Among the Dow Jones leaders, Apple (AAPL) rose 3.1%, while Microsoft (MSFT) advanced 1%.
Dow Jones stock Salesforce.com (CRM) tumbled after reporting earnings and announcing the acquisition of Slack Technologies (WORK) late Tuesday. Meanwhile, Veeva Systems (VEEV) topped Q3 estimates late, but shares fell over 2.5%.
Tesla (TSLA) advanced 3% on S&P 500 addition news and is just shy of Monday’s record high. Chinese EV leaders Nio (NIO) and Xpeng Motors (XPEV) dived despite reporting strong monthly delivery numbers. Meanwhile, Li Auto (LI) is expected to report monthly figures this week as well.
Stocks in or near buy zones in the stock market rally are Advanced Micro Devices (AMD), Facebook (FB), PayPal (PYPL) and Taiwan Semiconductor (TSM).
Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. AMD and Facebook were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Futures Today
Early Wednesday, Dow Jones futures fell 0.4% vs. fair value, while S&P 500 futures moved down 0.2%. Nasdaq 100 futures traded down 0.1% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange traded funds, Innovator IBD 50 (FFTY) rose 0.8% Tuesday. The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF traded up 1.3%. Meanwhile, the SPDR S&P 500 ETF (SPY) climbed 1.1%.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 37.7% for the year through Tuesday’s close. Meanwhile, the S&P 500 is up 13.4%, while the DJIA is up 4.5% year to date, through the Dec. 1 close.
U.S. Stock Market Today Overview
Last Update: 4:48 PM ET 12/1/2020
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 14 million on Tuesday. Total virus-related deaths rose past 276,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 64 million Tuesday, with more than 1.48 million virus-related deaths.
Coronavirus Stock Market Rally
November became a key month for the stock market, after IBD’s The Big Picture noted the market had returned to a new uptrend following a bullish follow-through day on Nov. 4.
Monday’s Big Picture commented, “So, technically speaking, the S&P 500 added a fresh distribution day to its count over the past 25 trading sessions. Yet it’s far more meaningful to compare Monday’s turnover with other full-day trading sessions in recent days.”
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Dow Jones Earnings: Salesforce
Dow Jones stock Salesforce reported better-than-expected Q3 results late Tuesday.
The company also announced the acquisition of Slack Technologies in a deal valued at $27.7 billion. Salesforce will use a combination of cash and stock to pay for the deal: For one share of Slack, Slack shareholders will receive $26.79 a share and .0776 shares of Salesforce.
Salesforce stock tumbled more than 4% in extended trade.
The cloud software company is the No. 2-performing stock on the Dow Jones Industrial Average, advancing 48.4% year to date.
Apple Stock Hits New Buy Point
Dow Jones stock Apple broke out above an aggressive entry at 122.09. Shares rallied 3.1% Tuesday and are just above the early entry. Another aggressive entry exists at 125.49 while the conventional buy point, for now, is 138.08, according to MarketSmith chart analysis.
The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 66.6% advance through Tuesday.
Stocks In Or Near Buy Zones: AMD, Facebook, PayPal, TSMC
Friday’s IBD Stock Of The Day, Advanced Micro Devices, is in the 5% buy zone above an 88.82 buy point in a double bottom, according to MarketSmith chart analysis. Shares eased less than 0.1% Tuesday. The 5% buy area goes up to 93.26.
According to IBD Stock Checkup, AMD stock boasts a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
FANG stock Facebook continues to trace a cup with handle, which shows a 297.48 buy point. Shares rallied 3.5% to move within 4% of the entry. A key flaw is the stock’s lagging RS line. It remains far from its old highs despite Tuesday’s advance.
PayPal broke out and closed in the 5% buy zone above a 215.93 buy point in a cup base. Shares gained 1.1% Tuesday. The buy zone tops out at 226.73.
Taiwan Semiconductor tried to break out past a new 102.54 buy point Tuesday, but closed about 2% below the entry. Shares briefly cleared a buy point in a rare ascending base.
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Nikola plunged for a fourth straight session Tuesday, plunging nearly 15%. The stock closed more than 80% off its 52-week high. This week, the stock is already down 37.8%.
On Monday, Nikola scrapped plans to build the Badger electric pickup truck in a drastically scaled-down partnership deal with General Motors.
Nio, Xpeng Tumble; Li Auto Deliveries On Tap
Early Tuesday, Chinese EV leaders Nio and Xpeng reported monthly delivery numbers. Monthly figures from Li Auto are expected later this week as well.
Nio delivered 5,291 electric vehicles in November, up 109% vs. a year earlier. The Chinese Tesla rival tumbled 10.2%, adding to Monday’s 6.4% skid.
Xpeng Motors delivered 4,224 electric vehicles, up 342% vs. a year earlier. The company’s smart sports sedan, the P7, led the gains. The P7 competes against the made-in-China Tesla Model 3.
Shares dived nearly 11%, following Monday’s 8.6% fall, and are about 30% off their 52-week high.
Li Auto stock fell 3.1% Tuesday, ending more than 25% off its 52-week high. Shares remain well above a 21.96 buy point in a cup with handle.
IBD Leaderboard stock Tesla advanced 3% Tuesday after the S&P Dow Jones Indices decided to add the stock to the S&P 500 index in a single step. Tesla stock will join the S&P 500 before the open on Dec. 21.
On Nov. 18, shares broke out above a 466 buy point in an awkward cup with handle and are already more than 20% from the buy point. On Monday, Tesla stock set a record high at 607.80 before reversing lower.
Stock Market Earnings: Veeva Systems
Veeva Systems reported third-quarter results late Tuesday above Wall Street estimates. The company reported adjusted earnings of 78 cents per share on revenue of $377.5 million. Wall Street expected earnings of 68 cents on revenue of $361.9 million.
Shares fell about 2.5% in extended trade. The stock is tracing a short cup base with a 314.09 buy point.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved up 1% Tuesday. Shares are moving further above the 50-day support level.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 35.7% through the Nov. 30 close.
Stock Market Rally: What To Do Next
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance. Fair Isaac (FICO) is the most recent addition to the list, added on Nov. 13. Shares are extended after they cleared resistance around 450.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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