The Dow Jones Industrial Average fell more than 150 points, as Congress approved the coronavirus stimulus deal with President Trump expected to quickly sign the legislation. Apple jumped nearly 5% before paring gains in midday trade. Tesla slid 5%, while hot IPO stock Peloton soared after the company announced an acquisition.
Dow Jones Today: Stimulus Deal
On Tuesday, the Dow Jones Industrial Average fell 0.5%, while the S&P 500 traded down 0.3%. The tech-heavy Nasdaq composite reversed lower in midday trade, falling 0.2%.
The $900 billion stimulus deal moved through Congress Monday, with a Senate vote affirming the package late Monday night. President Donald Trump is expected to sign the legislation quickly.
U.S. Stock Market Today Overview
Last Update: 11:30 AM ET 12/22/2020
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 42% for the year through Monday’s close. The S&P 500 is up 14.4%, while the DJIA is up 5.9% year to date.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 18.4 million on Tuesday. Total virus-related deaths rose past 326,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 77.8 million Tuesday, with more than 1.71 million virus-related deaths.
Coronavirus Stock Market Rally
November was a key month for the stock market. IBD’s The Big Picture flagged a new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, December sees the stock market near record highs, with the Nasdaq already setting more all-time records.
Monday’s Big Picture commented, “The stock market was not ready to give in to fear Monday, impressively digging itself out of a deep intraday hole. The bullish move keeps the market’s direction upright.”
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 the 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: IBD Long-Term Leaders
Nice is extended past a flat base’s 255.58 buy point following a Dec. 16 breakout. Intuit is out of the 5% buy zone above a 354.08 buy point in a cup with handle.
Dow Jones Stocks To Watch: Nike
Nike fell over 2% Tuesday morning, easing from Monday’s nearly 5% advance after the company reported strong quarterly earnings and sales results. Shares hit a new high Monday.
The blue chip giant is the No. 2-performing Dow Jones stock for 2020, with a 42.2% advance through Monday.
Peloton stock soared 14% after the company said it would buy exercise equipment maker Precor for $420 million. That will help Peloton ramp output of its cycles and treadmills.
On Monday, Peloton stock broke out past a 139.85 buy point in a cup base amid a 3.25% rise. Shares are extended Tuesday morning.
Stocks In Or Near Buy Zones: Chegg, DraftKings, Lululemon
Friday’s IBD Stock Of The Day, Chegg, broke out above a 90.09 buy point in a cup base Monday with a 3.55% advance. Shares added 3% early Tuesday. The 5% buy zone goes up to 94.59.
Last week, Lululemon broke out above a cup-with-handle’s 383.64 buy point. But shares gave up the entry on Friday. LULU stock moved down almost 2% Tuesday morning.
IBD Leaderboard member DraftKings gave up its 53.82 buy point in a cup with handle amid Monday’s 1% fall. Shares broke out above the buy point on Dec. 16. DraftKings stock is right at the entry, according to MarketSmith chart analysis. The stock moved up 1% Tuesday morning.
Per Leaderboard commentary, “DraftKings is just below a cup-with-handle entry. Volume was weak as shares topped the entry. It was a deeper than normal pattern, and it’s also a riskier third- or fourth-stage base.”
On Dec. 17, Lululemon broke out above a cup-with-handle’s 383.64 buy point. But shares gave up the entry on Friday with a 2.1% decline. LULU stock fell another 1% Tuesday morning, looking to add to Monday’s 1.2% loss.
According to IBD Stock Checkup, Lululemon stock shows a 95 out of 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.
IBD Leaderboard stock Tesla slid another 5% early Tuesday, adding to Monday’s 6.5% dive. The company was added to the S&P 500 index Monday.
On Nov. 18, shares broke out above a 466 buy point in a cup-with-handle base and are about 40% from the buy point. On Friday, shares of the electric-auto giant hit an all-time high at 695.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved further above an aggressive entry at 125.49 amid Tuesday’s 2.5% rise. Shares are rapidly approaching the conventional buy point, which is at 138.08, according to MarketSmith chart analysis.
The blue chip giant is the No. 1-performing Dow Jones stock for 2020, with a 74.7% advance through Monday.
Software giant Microsoft moved up 1% Tuesday, as shares moved further above their key 50-day line.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 41.2% through the Dec. 21 close.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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