Dow Jones, Up 765 Points In December, Hits New Highs; When To Buy Microsoft

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Large caps led the advance in the stock market today as smaller issues took a well-deserved break. Recent breakouts showed wobbly action with just three trading sessions remaining in 2020. The iShares Russell 2000 ETF (IWM) fell 0.3%, while the Dow Jones Industrial Average gained nearly 0.7%.




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Investors generally applauded President Donald Trump’s decision to sign a new coronavirus emergency spending package into law. Meanwhile, media reports noted that Democratic leaders of Congress are confident that $2,000 payments for qualifying households hit hard by the economic shock caused by Covid-19 will pass the House of Representative.

The S&P 500 rallied as much as 1% and notched brand-new all-time highs before settling for a 0.9% gain by Monday’s session end. At the session peak of 3740, the 500 had risen 11.2% in the fourth quarter alone.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 30403.97 +204.10 +0.68
S&P 500 (0S&P5) 3735.36 +32.30 +0.87
Nasdaq (0NDQC ) 12899.42 +94.69 +0.74
Russell 2000 (IWM) 198.35 -0.66 -0.33
IBD 50 (FFTY) 40.88 -0.72 -1.73
Last Update: 4:38 PM ET 12/28/2020

Meanwhile, the S&P 100, tracking the 100 largest companies by market value trading on U.S. exchanges, gained 1.5%. That beat a 0.7% lift by the Nasdaq composite and the Dow industrials. Volume climbed vs. Thursday’s half-day session. The stock market was closed on Friday for Christmas.

The benchmark U.S. Treasury 10-year bond stood at 0.92%, mostly unchanged from its level on Dec. 1. WTI crude oil futures dropped 1.1% to $47.68 a barrel.

In The Dow Jones

Dow Jones stock Microsoft (MSFT) outperformed most large-cap techs, rising 1% for its fourth advance in five sessions.

The Leaderboard stock is forming a bullish cushion above its flattened-out 50-day moving average. While the four-month consolidation does not fit a specific chart pattern right now, the base does carry a 232.96 proper buy point for now.

The cloud-computing and enterprise software giant’s earnings rose 32% to $1.82 a share in the September-ended fiscal first quarter on a 12% jump in sales to $37.2 billion. The Street sees fiscal 2021 profit climbing 18% to $6.77 a share.

Besides Microsoft, a few more of the so-called FAANG tech megacaps also got discussed on Monday’s IBD Live show.

Microsoft is also a member of the IBD Long-Term Leaders list.

Long-Term Leaders Making Bullish Moves

Within that list, Copart (CPRT) stood out with its 2.4% gain in dull turnover.

The leader in salvaged-car auctions is forming a shallow cup pattern with a 131.06 potential buy point.

Also in the auto space, new IBD Stock Of The Day Lithia Motors (LAD) backpedaled away from a session high of 304.97 but still gained 1.9%. The stock is trying to clear the 5% buy zone after jumping back above a 288.66 buy point in a six-week cup without handle.

IBD Big Cap 20

Meanwhile, Idexx Laboratories (IDXX) eased 0.5% and remained in the 5% buy zone after clearing a 485.10 entry point in a nearly six-week flat base last week.

Idexx got showcased in the latest Inside The IBD Big Cap 20 story, which publishes once a week on Friday or earlier.

Please follow Chung on Twitter: @saitochung and @IBD_DChung

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