The stock fell in uneven losses at the opening on Wednesday, with the pandemic reopening of games rebounding and sales in the bond market continued. Federal Reserve chief Jerome Powell left for another round of virtual depositions in Washington, after sustaining nervous markets with peaceful comments on Tuesday. Rising stocks set the tone on Wednesday, with Tesla and Maxlinear taking down strong initial moves. Meanwhile, Johnson & Johnson climbed the Dow Jones today, after positive comments from the FDA about its coronavirus vaccine.
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Nasdaq Composite led the initial drop, with a 0.8% drop in the initial bell. The S&P 500 had a loss of 0.3%. The industrial Dow index fell more than 50 points, maintaining the loss of less than 0.2% in the stock market today. The reopening pandemic took the Nasdaq 100 and S&P 500, with Norwegian Cruise Line (NCLH) rising 5.4% and United airlines (UAL) mounting a gain of 3.7%.
Small caps advanced, sending the Russell 2000 up 0.4%. Upwork (UPWK) and MicroStrategy (MSTR) traded at the top of the list. The iShares Russell 2000 (IWM) ETF increased 0.7%.
The sudden losses overnight in China and Japan reflected a still tense climate in global markets. It also caused many China-based names to fall into the US pre-market trade. NetEase (NTES), JD.com (JD) and Baidu (BIDU) weighed on the Nasdaq 100. Europe’s benchmarks were mixed in the afternoon’s negotiations. Frankfurt’s DAX led the region with a 0.5% advance, while London’s FTSE 100 and Paris’s CAC-40 were in the red.
The first US trades showed Upwork, a 28-month IPO, valuing more than 16%. Two analysts raised their stock price targets after the fourth quarter results. PubMatic (PUBM) – a software developer for publishers, not beverage establishments – rose 27% after its first quarterly report as a publicly traded company.
Home Decoration Retailer Lowe’s (LOW) spilled initial gains and fell 3%, despite reporting stronger than expected fourth quarter results, and announcing $ 9 billion in share repurchases for 2021. Point of sale technology innovator Square (SQ) fell 6.8%, with five analysts raising the price targets, while two downgraded the shares based on the valuation after a mixed fourth quarter report.
Chipmaker and IBD 50 stock MaxLinear (MXL) shot up 5.8% in the first trades, moving out of a buying range above a flat-based buying point at 38.81, according to the IBD MarketSmith analysis.
Dow Jones Today: J&J Covid Vaccine 66% / 85% Effective
Boeing (BA) and Chevron (CVX) soared to the top of the Dow Jones today, up 2.2% and 1.6%, respectively. Johnson & Johnson (JNJ) rose 0.6% 1.2% after the company reported that the US Food and Drug Administration planned to launch a detailed analysis of the company’s final stage of the Covid-19 vaccine. An independent panel is due to meet on Friday to evaluate the vaccine and send a recommendation to the FDA.
The FDA concluded that the vaccine is 66% effective in protecting against coronavirus infections and 85% effective against severe cases of the disease, the company said.
A three-day retraction left J&J shares perfectly positioned at their 10-week moving average at the end of Tuesday’s trading, and back in a buying range above a flat-based buying point at 155.57. The purchase range goes to 163.35.
Salesforce.com (CRM), with its fourth quarter earnings after closing on Thursday, is shaping the right side of a cup base, but fell below its 21-day exponential moving average on Tuesday. The base was formed in the wreckage of a failed November escape from a double bottom pattern. MarketSmith estimates the point of purchase at 271.02. Salesforce shares were about 15% below that mark at the end of Tuesday’s trading, but now face potential resistance at the bottom of the 21-day line.
Falling bonds, rising copper; Oil hovers 13-month high
Among other US markets, the bonds accelerated their falls, causing the 10-year yield to rise 8 basis points to 1.42%, a sharp drop in losses around 0.50% in August. Yields started 2020 at about 1.8%, down from about 2.7% a year earlier. Federal Reserve Chairman Jerome Powell on Tuesday reaffirmed a commitment to interest rates close to zero in the Senate testimony, triggering a recovery in the markets and easing some concerns about inflation. Powell is expected to have a second day of virtual testimony in Washington, DC, scheduled to speak to the House Financial Services Committee at 10 am Eastern time.
Oil prices held steady on Wednesday, with West Texas Intermediate crude rising 0.5%, holding around $ 62 a barrel, hovering close to its highest level since January 8, 2020. The European benchmark for Brent crude jumped above $ 66. Copper rose again, with futures up 0.6% to $ 4.21 per pound, the highest mark since July 2011.
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Bitcoin Bounces, PayPal Enter the Purchase Range
Bitcoin regained additional ground early on Wednesday, staying above $ 50,000, after falling below $ 45,000 on Tuesday, according to CoinDesk. The cryptocurrency rose to a record high above $ 58,000 on Sunday.
Among Bitcoin-related actions, Marathon Patent Group (MARA) recovered 13.5%, while MicroStrategy traded more than 5% above. The Amplify Transformational Data Sharing (BLOK) ETF added 7.1%.
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IBD Leaderboard Stock PayPal Holdings (PYPL) advanced 1.7%, seeking to end a five-day decline. PayPal’s shares have been influenced by Bitcoin price fluctuations since October, when the company launched a cryptocurrency trading service that trades Bitcoin. The stock’s retreat has technically left PayPal’s shares in a buying range, as the shares bounced back from Tuesday’s support test on their 10-week line.
Ecommerce candidate Overstock.com (OSTK), one of the first Bitcoin bets and owner of the blockchain fund Medici Ventures, rose more than 4% while investors awaited its fourth quarter report. The stock is assembled on a six-month cup-with-handle base, with a point of purchase at 112.40. The base is almost 64% deep and control is tight, dropping almost 30% after Tuesday’s liquidation. Both are significant failures that put a disruption at additional risk.
Coronavirus Update: A jump in vaccine dose deliveries
The seven-day average for new Covid-19 cases reported daily in the US and around the world rose for the second day, after a 41-day downtrend ended on Monday. New cases reported worldwide, on average in the previous seven days, increased to 369,614 on Tuesday. That is about half of the daily high of 745,985 new cases recorded on January 11.
In the US, the seven-day average for new reported cases rose to 70,255 on Tuesday, still more than 72% below the 255,258 peak reached on January 11, according to the Worldometer.
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Deaths increased on the third day. The seven-day average for daily reported deaths rose to 2,126 on Tuesday. The daily average of reported deaths fell in 25 days, until Saturday, after reaching a high of 3,447 on January 26.
The Center for Disease Control and Prevention reports that the count of vaccine doses distributed so far has jumped to 82,114 million on Tuesday, up 9% from Monday’s figures. About 65.032 million doses have been administered, which means that just under 20% of the United States population has received at least one injection.
Among the related actions, Modern (MRNA) was rising sharply early Wednesday, looking like a sharp two-day drop.
Scoreboard actions: Tesla, Upstart Climb
Among the IBD Leaderboard stocks, Tesla and Upstart were the pioneers. Tesla jumped 3.8%, resisting the end of a four-day decline, with the aim of resuming support at its 50-day moving average. Tesla’s retracement significantly narrowed the stock’s margin above its 200-day moving average, from more than 127% at the end of January to less than 54% at the end of trading on Tuesday. Inventories rising more than 70% above their 200-day lines are typically signs of caution that they are being extended too much.
Upstart rose 3.3% at the start of negotiations, aiming to regain some ground after its strong reversal of mid-morning lows on Tuesday. The cloud-based credit and loan platform tested investors with its sharp drop during the final week of an eight-week suspension rule. The shares remain almost 42% above a base IPO purchase point at 51.50, and 265% above the initial offer price of 16 December.
Dow Jones today: Microsoft leap
Dow Jones shares were almost unanimously higher at the beginning of Wednesday, with only JPMorgan Chase (JPM) on the list of declines, down 0.2% in the first trades. The bank extended its winning streak to seven days amid market turmoil on Tuesday, rising along with Caterpillar (CAT) and Disney (DIS). All three stocks have been extended from recent leaks.
Microsoft (MSFT) ended in a 0.5% drop on Tuesday, ending at a buying range above 232.96 point of purchase, after recovering from its 10-week line. The shares rose 0.4% in the first Dow Jones trades today.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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