The Dow Jones Industrial Average fell over 50 points after briefly reversing higher Wednesday, as Senate Majority Leader Mitch McConnell said a stimulus deal could be “soon.” The price of Bitcoin surged above $20,000 for the first time. Apple fell after Tuesday’s 5% surge, while Tesla tumbled 3%. Nio continued to rebound from a key support level.
Dow Jones Today: Stimulus Deal ‘Soon’
On Wednesday, the Dow Jones Industrial Average moved down 0.1%, while the S&P 500 rose 0.2%. The tech-heavy Nasdaq composite gained 0.3% in midday trade.
“We’re making significant progress and I’m optimistic that we’re gonna be able to complete an understanding sometime soon,” Senate Majority Leader Mitch McConnell told reporters, according to NBC News. His comments came after congressional leaders ended their stimulus talks late Tuesday.
Meanwhile, Politico reported that Congress is on the brink of a stimulus package that would include a second round of direct payments, but would likely leave out state and local funding and a liability shield. A deal could be finalized as soon as this morning.
U.S. Stock Market Today Overview
Last Update: 10:34 AM ET 12/16/2020
The Federal Reserve will release its policy statement 2 p.m. ET.
Among exchange traded funds, Innovator IBD 50 (FFTY) rose 0.2% Wednesday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) added 0.2%. Meanwhile, the SPDR S&P 500 ETF (SPY) notched an incremental gain.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 40.4% for the year through Tuesday’s close. The S&P 500 is up 14.4%, while the DJIA is up 5.8% year to date, through the Dec. 14 close.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 17.1 million on Wednesday. Total virus-related deaths rose past 311,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 73.9 million Wednesday, with more than 1.64 million virus-related deaths.
Coronavirus Stock Market Rally
November was a key month for the stock market, after 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, although the S&P 500’s slip on Monday raised its distribution day count to five.
Tuesday’s Big Picture commented, “After a bad reversal Monday, the S&P 500 now looks to be rebounding from a test of the 21-day exponential moving average. The Nasdaq and Dow Jones Industrial Average came close to touching their own 21-day lines, and also held above that price trend indicator.
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 finding support around it 10-week moving average line and is just above a 238.45 buy point in a flat base. Meanwhile, a new flat base offers a new buy point at 255.58. Intuit is in the 5% buy zone above a 354.08 buy point in a cup with handle.
Bitcoin Tops $20,000
The Grayscale Bitcoin Trust (GBTC) advanced 10% to hit a new 52-week high.
Dow Jones Stocks: Apple Hits New Buy Point
Apple broke out above another aggressive entry at 125.49 amid Tuesday’s 5% surge. Shares eased 0.5% early Wednesday.
Apple was Monday’s IBD Stock Of The Day.
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 74.2% advance through Tuesday.
Stocks In Or Near Buy Zones: AMD, Nio, PayPal
Advanced Micro Devices broke out above a 96.47 alternative buy point Tuesday with a 2.5% advance. Shares are just below the new buy point amid Wednesday’s 0.8% fall.
AMD stock broke out above an 88.92 buy point in a double bottom on Nov. 30 and is extended from that entry.
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.
Tesla-rival Nio rebounded from its 10-week moving average line — a key support level — with a 6.2% rise Tuesday. A potential flaw is the lack of strong volume during Tuesday’s advance. The solid rebound from the support area places the stock in a new buy area.
Shares added to Tuesday’s gains, rising 3% Wednesday morning.
Nio is a new IBD SwingTrader idea.
PayPal moved out of buy range above its 215.93 buy point in a cup base, according to MarketSmith chart analysis. Shares moved up 2.7% Wednesday and are extended above the 5% buy range that goes up to 226.73.
IBD Leaderboard stock Tesla moved down 3% early Wednesday, as the stock continues to trade just off record highs. The company will be added to the S&P 500 index on Dec. 21.
On Nov. 18, shares broke out above a 466 buy point in a cup with handle and are about 30% from the buy point. Last week, shares of the electric-auto giant hit an all-time high at 654.32.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved up 1.5% Wednesday, as shares struggled to regain their key 50-day line.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 35.8% through the Dec. 15 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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