Dow Jones futures fell slightly late Monday, along with S&P 500 futures and Nasdaq futures, as Johnson & Johnson (JNJ) halted its coronavirus vaccine trial. The stock market rally had a powerful session, with Apple stock and Amazon.com (AMZN) leading a megacap tech rally ahead of big news.
Johnson & Johnson also reports early Tuesday, but attention likely will be on J&J’s coronavirus vaccine. J&J has halted its late-stage vaccine trial due to an unexplained illness in a participant. Last month AstraZeneca (AZN) halted its late-stage Covid-19 vaccine trial on an adverse reaction by a participant.
Veeva, Adobe, Microsoft and Tesla stock are on IBD Leaderboard. Apple, Amazon and Veeva stock are on SwingTrader. Adobe stock and Microsoft are on IBD Long-Term Leaders, while Veeva is on the Leaders watchlist. Nvidia stock, Veeva, Amazon and Adobe are on the IBD 50.
Disney, Apple, Microsoft, JPMorgan and J&J are Dow Jones stocks, while Amazon, Google and Facebook stock are FANGs.
Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures sank 0.25%. Nasdaq 100 futures lost 0.2%.
Disney stock is giving a boost to Dow Jones futures overnight. JPMorgan and J&J will likely move Dow futures before Tuesday’s open. Those three stocks, along with Citigroup and Delta earnings, could influence S&P 500 futures as well.
Coronavirus cases worldwide reached 38.03 million. Covid-19 deaths topped 1.08 million.
Coronavirus cases in the U.S. have hit 8.03 million, with deaths above 220,000.
Coronavirus Stock Market Rally
The coronavirus stock market rally had a strong day, especially large-cap techs, though the major indexes closed off their very best levels of the session.
The Dow Jones Industrial Average rose 0.9% in Monday’s stock market trading. The S&P 500 index popped 1.6%. The Nasdaq composite jumped 2.6%, its best gain in a month and closing in on all-time highs.
The Nasdaq’s big price move came on higher volume than on Friday. That means that Nasdaq staged a follow-through day on the 16th day of its rally attempt. The Dow Jones follow-through day came on Sept. 30, launching the stock market rally, but it’s always nice to see the Nasdaq provide further confirmation.
Apple stock spiked 6.4% to 124.42, building the right side of a base toward a 138.08 buy point from a new base. Microsoft rose 2.6% to 221.40, also working on the right side of a base. Amazon leapt 4.75% to 3,442.93, closing in on its 3,552.35 buy point from a cup base. All three reclaimed their 50-day lines on Friday.
Facebook climbed 4.3% and Google stock 3.6%, both convincingly retaking their 50-day lines.
Growth stocks overall weren’t quite as impressive.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) advanced 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 1.5%, with Adobe and Microsoft stock notable holdings. The VanEck Vectors Semiconductor ETF (SMH) advanced 1.8%, with Nvidia stock a major component.
Veeva Stock Leads Breakouts
Veeva stock rose 4.4% to 307.16 on Monday, clearing a 298.86 flat-base buy point, according to MarketSmith analysis. The life sciences software leader offered several early entries in the past few weeks, including a pseudo-handle and a bounce from the 10-week line.
Shift4 Payments stock jumped 7.8% to 60.05 after spiking to 62.59 intraday. FOUR stock cleared a 56.30 cup-base buy point in more than double normal volume. Shift4 Payments came public in June. Shift4 launched QR Pay this year, letting customers pay via their phones for a touch-free payment experience. As of Monday, customers can order via their phones as well.
The company got hit last quarter amid coronavirus shutdowns, with revenue down vs. a year earlier. But last week it said transaction trends were improving. Shift4 stock has been losing money, but analysts expect it to turn a small profit starting in Q3.
Shift 4 was Monday’s IBD Stock Of The Day.
Tesla, Nvidia, Adobe Buying Opportunities
Tesla stock rose 1.9% to 442.30, closing off highs but still moving above a couple of various trend lines, offering an early entry. Investors also could view 462.04 as another entry. Tesla does have a proper consolidation, with an official 502.59 buy point. Keep in mind that Tesla earnings are due Oct. 21, and it’s likely that TSLA stock will move significantly, one way or the other, on results and guidance.
Adobe stock has a 536.98 buy point from a new cup base, part of a base-on-base formation. Shares rose 1.7% to 510.89, moving above short-term resistance around 505.
Nvidia stock popped 3.4% to 569.04. It’s closing in on a 589.17 buy point from its new cup base. Investors could have used Monday’s move above a mini-handle as a place to start small with a new position.
Disney Streaming Prioritized
Late Monday, Disney said it would centralize its media businesses into one group for content distribution, ad sales and Disney+. With the coronavirus pandemic closing theme parks and theaters, Disney+ and other streaming offerings have become the one growth area for the Dow giant. Kareem Daniel, president of games and publishing within Disney’s consumer products division, will now oversee that new media business. A key goal will be turning the fast-growing Disney+ into a profitable enterprise.
Disney stock rose 5% to 131.35 overnight. That could push shares back above the 50-day moving average. Looking ahead, 137.34 could be a buy point, either from a new, short base or as a handle to a long consolidation.
DIS stock dipped 1 cent to 124.97 on Monday.
Why Did The Stock Market Rally?
Why did the stock market rally have such a strong session? The major indexes had cleared resistance last week, taking on a clearly bullish tone. But with stimulus talks seemingly stalled, it wouldn’t have been surprising to see the Nasdaq and leading stocks pause Monday.
Several new price targets set by analysts for FANG leaders such as Apple stock didn’t hurt. Investors clearly weren’t shy about buying tech giants ahead of key news, with earnings soon to follow.
Perhaps investors are warming to the idea of Joe Biden winning the 2020 presidential election. If nothing else, Wall Street may favor certainty. Biden led President Donald Trump by 8.5 points in the IBD/TIPP 2020 Presidential Election Tracking Poll, which kicked off Monday.
But whatever the reason, the major indexes and leading stocks are acting well. After a rough September in which the winning move generally was not to play, the stock market trend is favorable, with a slew of breakouts that are flourishing.
This is a good time to be buying and holding quality stocks. That could change quickly, but right now the stock market trend is your friend.
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