The Dow Jones Industrial Average started the third quarter in stocks today on a slightly negative note. Amid losses of 1 point or more in at least nine of its 30 components, Dow industrialists ended the session with a 0.3% drop.
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The Dow, which ended at 25,734 on Wednesday, has continued to drop nearly 10% since January 1. Boeing (LICENSED IN LETTERS), House deposit (HD), IBM (IBM) and Chevron (CVX) marked the downside among Dow Jones stocks with losses of 1.5 points or more. Only HD shows a solid relative resistance rating of 80 or more among the first-class quartet. It is trading close to a purchase point of 248.42 in a 13-week cup with a handle.
The blue-chip index delayed the gain of nearly 1% of the Nasdaq compound by one mile of field; the S&P 500 was up 0.5%. The iShares Russell 2000 (IWM) exchange-traded fund fell nearly 1%, halting a two-day winning streak.
Volume grew on both major exchanges, the first data showed.
Earnings by film, automaker, commercial software, online retail, travel booking and electrical services stocks led the market higher. Go to IBD Data Tables to see the full price-weighted daily performance of all 197 industries tracked by Investors.com.
Since April 2, IBD has determined that the market has been on a confirmed bullish trend. A solid follow-up day of Day 8 by the S&P 500 in that session spurred a change in the current outlook for stocks from “Correcting Market” to “Confirmed Bullish Market”, the best time to actively build a good list of Surveillance rated growth stocks and bought shares in a powerful breakout.
Check out this Tuesday IBD overview for more details on what to do and what not to do as the second half of 2020 begins.
ISM data: new manufacturing expansion
Meanwhile, a robust ISM manufacturing index report of 52.6 for June overshadowed Econoday’s consensus view of 49.0 and rebounded sharply from 43.1 the previous month. A figure of more than 50 denotes the expansion of manufacturing activity.
This Wednesday news clearly overshadowed, at least on Wall Street, a dire prediction by Anthony Fauci, the federal government’s head of infectious diseases, that Covid-19 confirmed that cases in the US could exceed 100,000 daily.
Interestingly, the amplitude was slightly negative despite the Nasdaq’s solid gain.
Falling stocks outnumbered rising stocks by a narrow 6-5 margin on the Nasdaq, even as the Nasdaq 100 rallied 1.2%. But on the NYSE, the winners beat the losers by more than 200 numbers, or a ratio of about 10-9.
The NYSE compound sharpened fractionally higher.
The innovative IBD 50 (FFTY), which ended the first six months of the year with less than 1%, slipped into positive territory by 2020. The growth stocks-focused ETF increased more than 1.1%, based on progress 2.1% on Tuesday.
FFTY, which does not accurately reflect the IBD 50’s price-weighted overall performance, recovered 25.7% in 2019.
Through Wednesday’s trade, the IBD 50 has risen 15.9% since January 1, with a 3.6% loss for the S&P 500, excluding dividends.
Beyond Dow Jones: Will Third-Quarter Diabetes Stocks Rule?
Within IBD 50, Dexcom (DXCM) continued to work on a chart pattern that increases the chance of a new breakout. (Check out this new piece from IBD 50 Stocks To Watch on the cutting edge of highly practical and cutting edge CGM (Continuous Glucose Monitoring) devices.)
At IBD Live, Alteryx (AYX) attracted a lot of attention. Shares on the data analysis platform increased more than 6% in above-average turnover.
Look out for the stock build / distribute rating, currently a B-, for potential improvement. The stock is now well extended beyond a 151.60 entry point in a large handle cup.
According to the IBD Stock Review, Alteryx scores a respectable composite score of 91 on a scale of 1 (slimy) to 99 (scintillating).
The IBD Composite Rating places important fundamental, technical and fund sponsorship criteria in a single easy-to-use metric. Overall, in the midst of the early stages of a confirmed market uptrend, focus your watchlist on companies that show a composite score of 90 or above.
Daqo New Energy (DQ) also ordered discussion at Wednesday’s IBD live show.
Shares of the silicon wafer production expert for the solar energy industry drove more than 18% and hit a new all-time high of 89.46. Daqo has now gained more than 10% since erasing a buy point of 81.56 in a large, deep cup without a handle.
Covid-19 Play
Down, Modern (MRNA) is testing a critical level as stocks fell more than 4%.
Volume initially ran as much as 66% above its 50-day moving average, but slowed at the end of the day. Nearly 18 million shares traded hands, 21% below usual levels.
As seen in a daily chart, the technology-based biotechnology of the RNA messaging mechanism is trying to find institutional buying support at the critical 50-day moving average. The IBD and MarketSmith charts show the 50-day line in red.
However, a strong bounce from the 50-day line, or the 10-week moving average on a weekly chart, could lead to a new follow-up buying point. In fact, Moderna has exuded strength since clearing a buyout point of 36.10 on an irregularly shaped six-week cup-shaped base on April 15.
Moderna has received a significant promise of funding from the US government in its mission to create a working Covid-19 vaccine. However, some observers question whether the company will have full ownership of the technology it will develop. For more information on this topic, read this IBD technology story.
While Wall Street sees the Cambridge, Massachusetts, company lose $ 1.46 a share in 2020, analysts surveyed by FactSet also see it record earnings of 94 cents a share in 2021.
Moderna has a market value of $ 23.8 billion, directly on large-cap land. It has 387.7 million shares outstanding and a fleet of 271.4 million.
Check out the IBD BigCap 20 for ideas on large-cap growth stocks that have the potential to crush the S&P 500.
Follow Chung on Twitter at @SaitoChung and @IBD_DChung for more information on growing stocks, buy points, breakouts, sell rules, and market insights.
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