Dow Jones Claws Back From 430-Point Drop As Stock Market Rally Pauses – Investor's Business Daily

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The Dow Jones Industrial Average sharply pared a 430-point loss midday Tuesday, as it took a breather from Monday’s coronavirus vaccine-fueled rally.


The Dow Jones industrials gave up 0.5%, the S&P 500 dipped 0.3% and the Nasdaq edged 0.2% lower in the stock market today. Small caps tracked by the Russell 2000 fell 0.7%. Volume was lighter on both major exchanges vs. the same time Monday.

U.S. retail sales increased 0.3% in October, the Commerce Department reported, missing Econoday’s estimate for 0.4%. September retail sales was revised downward to a 1.6% gain from 1.9%.

On Monday, the Dow and S&P 500 closed at new highs as Moderna‘s (MRNA) bullish data from its Covid-19 vaccine trial sparked a big market advance.

The Nasdaq has rallied 33% this year, while the S&P 500 is up 12% through Monday’s close. The Dow is up 5% and the small-cap Russell 2000 has also gained 5%. All four are back above their 10-week moving averages. Read The Big Picture for detailed daily market analysis.

Market Uptrend Intact

It’s been a volatile few weeks. On Sept. 30, the IBD stock market outlook was upgraded to “confirmed uptrend” from “market in correction.” But on Oct. 23 the outlook was downgraded to “uptrend under pressure” as stocks sold off.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 29750.54 -199.90 -0.67
S&P 500 (0S&P5) 3610.62 -16.29 -0.45
Nasdaq (0NDQC ) 11886.44 -37.69 -0.32
Russell 2000 (IWM) 176.59 -1.04 -0.59
IBD 50 (FFTY) 37.92 -0.05 -0.13
Last Update: 11:56 AM ET 11/17/2020

On Nov. 4, after Election Day, the market outlook returned to “confirmed uptrend” as the major indexes staged big rallies. That gives the green light to buy leading stocks that are breaking out of solid bases.

Meantime, Covid-19 cases continue to rise globally. Worldwide coronavirus cases are approaching 55.6 million, with nearly 1.34 million deaths, according to Worldometer. In the U.S., confirmed cases since the beginning of the pandemic have topped 11.5 million, with the death toll close to 253,000.

Dow Losers And Winners

Walgreens Boots Alliance (WBA), down nearly 10%, was the biggest loser on the Dow Jones. Amazon (AMZN) launched Amazon Pharmacy, offering home drug delivery with discounts of up to 80% on generics and 40% on brand medications. Walgreens stock gapped down below its 200-day moving average.

Other drugstore chains also got slammed. Rite Aid (RAD) slumped 14%, while CVS Health (CVS) shed 8%, both in heavy volume. Amazon edged nearly 1% higher as it tries to retake its 50-day moving average.

Among other blue chip losers, Home Depot (HD), American Express (AXP) and Honeywell International (HON) gave up more than 2% each.

Home Depot fell despite reporting Q3 earnings and sales that topped views early Tuesday. Shares fell below their 50-day line as they continue to build a flat base with a 293.05 buy point.

Walmart (WMT), which also reported better-than-expected Q3 results, edged slightly lower. The retail giant’s U.S. e-commerce sales surged 79%. But Amazon’s drug delivery news may be weighing on the stock. Walmart shares remain in potential buy range from a 151.43 buy point of a flat base.

Dow winners included (CRM), Merck (MRK) and Boeing (BA), up about 2% apiece.

Tesla Cruises Higher

Drugstore, bank and hotel stocks led the downside among IBD’s 197 industry groups. But automakers, movie-related stocks and some software makers advanced.

In the automaker group, Tesla (TSLA) surged 10% in fast turnover to gap up above its 50-day moving average. Shares are close to a 466 buy point of a cup with handle. The electric car maker will be added to the S&P 500 index on Dec. 21. Tesla is an IBD Leaderboard stock.

China rival Nio (NIO), up as much as 6% earlier, pared its gain to 1.3%. Analysts expect a loss of 15 cents a share on 144% higher revenue of $628 million when the electric SUV maker reports after the close. Last year, Nio lost 33 cents a share.

Nio stock is sharply extended past a 15.55 buy point of a cup with handle, according to MarketSmith chart analysis.

Over in the IBD 50, Digital Turbines (APPS), Regeneron Pharmaceuticals (REGN) and Taiwan Semiconductor (TSM) fell over 2% each. But Trade Desk (TTD), Futu Holdings (FUTU) and Vipshop (VIPS) each gained more than 2%.

Software leaders Adobe (ADBE) and ServiceNow (NOW) added about 1.5% apiece. Amazon was also among IBD 50 gainers.

The Innovator IBD 50 ETF (FFTY) dipped 0.3% but continues to hold above its 50-day line.

Follow Nancy Gondo on Twitter at @IBD_NGondo


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