Dow Jones futures were in focus late Tuesday, along with S&P 500 futures and Nasdaq 100 futures, after Tuesday’s tech-driven stock market rally. Stock market leaders Apple, Netflix, Shopify and Zoom Video fueled the Nasdaq to record highs. But Tesla skidded on plans to sell $5 billion of stock.
The tech-heavy Nasdaq climbed 1.4% to hit another all-time high Tuesday. The S&P 500 rallied 0.75%, hitting a record high, while the Dow Jones Industrial Average gained 0.8%, or 215 points, aided by a 6.3% surge in shares of Walmart (WMT). Walmart will launch its Walmart+ membership program on Sept. 15.
Tesla (TSLA) hit more record highs Tuesday before reversing 4.7% lower after the company said it plans to sell $5 billion of stock.
Dow Jones Futures
The Dow Jones futures hadn’t started trading yet after the stock market close Tuesday. The futures trading session will start at 6 p.m. ET. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
U.S. Stock Market Today Overview
Last Update: 4:32 PM ET 9/1/2020
Among exchange traded funds, Innovator IBD 50 (FFTY) rose 2.5% Tuesday, showing that top growth stocks sharply outperformed the DJIA. The ETF of top growth stocks made a new 52-week high.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 33.1% for the year through Tuesday’s close. Meanwhile, the S&P 500 is up 9.2%, while the DJIA is up 0.4% year to date, through the Sept. 1 close.
According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 6.2 million on Tuesday. On Sunday, daily new cases measured about 33,981, as the recent surge in daily new cases continues to recede, and the number of daily deaths on Aug. 30 — a key metric to monitor — has fallen to its lowest level since July 5.
The cumulative total of Covid-19 cases confirmed since the start of the outbreak worldwide topped 25.7 million Tuesday, with more than 856,000 virus-related deaths.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the coronavirus stock market rally remains in an uptrend after rebounding from lows five months ago, on March 23. The major stock indexes confirmed the rebound as a new uptrend on April 2.
Per Monday’s The Big Picture, “This column has noted that the run has gotten so strong that some sort of technical pullback is due. But in the summer months, equity trading desks seem to have been relatively quiet overall. On the Nasdaq, you’d have to go all the way back to July 21 to find a session in which turnover rose above the index’s 50-day moving average.”
Stocks to watch include the top stocks on IBD Long-Term Leaders list, which focuses on companies with stable earnings growth and price performance.
Dow Jones News: Apple Jumps
Among the top Dow Jones stocks, Apple stock jumped 4% Tuesday after Bloomberg reported that Apple is targeting 75 million 5G iPhones for this year’s launch, a sign of solid demand, despite the Covid-19 outbreak.
Apple shares hit a new high and are more than 85% above a cup-with-handle’s 72.15 buy point. The blue-chip giant is the No. 1-performing Dow Jones stock in 2020, with an 82.8% advance through Tuesday’s close.
Walmart Sets Launch Of Walmart+
Walmart stock jumped 6.3% after the company said that Walmart+ would launch on Sept. 15. The service will cost $98 a year, or $12.95 a month, with a 15-day free trial, according to a release. The program’s benefits can be used, in one way or another, at more than 4,700 stores.
The service will offer free delivery on items, at in-store prices, with 2,700 stores capable of offering same-day delivery.
The Dow Jones retail giant is about 12% above a 132.09 buy point in a double bottom. Shares reclaimed the entry on Aug. 27.
Netflix is approaching a cup base’s 575.47 buy point, according to MarketSmith chart analysis. Shares advanced 5.1% after RBC Capital Markets analyst Mark Mahaney reiterated his outperform rating on Netflix stock with a price target of 610.
The analyst believes that Netflix could hit 500 million subscribers by 2030. The streaming video leader ended the second quarter with 193 million subscribers worldwide.
According to the IBD Stock Checkup, Netflix stock shows a 98 out of a best-possible 99 IBD Composite Rating. The Composite Rating is a simple way to easily measure the quality of a stock’s fundamental and technical metrics.
Netflix is an IBD SwingTrader member.
Shopify stock advanced more than 6% to new highs Tuesday. The stock topped out at 1,146.91. The stock market leader ended Tuesday more than 90% above a 593.99 buy point in a cup base. Shares broke out on April 20.
According to IBD Leaderboard commentary, “Shopify is well extended from an alternate entry and from a few tests of support near its 10-week moving average. A new test of the 10-week line is starting to work. But with such a sharp gain already, risk is elevated. It’s a quarter position on Leaderboard.”
Zoom Stock Soars
Zoom Video soared as much as 47% Tuesday before closing with a nearly 41% advance. The company reported a huge earnings and sales beat late Monday. July-quarter earnings surged to 92 cents a share on an adjusted basis. Revenue soared 355% to $663.5 million. The company is considered one of the ultimate coronavirus plays because its free video-calling app has been in such heavy demand since the Covid-19 outbreak.
Zoom stock ended Tuesday more than 300% above a 107.44 buy point in a cup base, following a volatile breakout on Feb. 20. Meanwhile, shares are also more than 65% above a recent 275.19 buy point after a breakout on Aug. 18.
Tesla To Sell Stock
Stock market leader Tesla ended a volatile session down 4.7%. Shares briefly hit a new high before falling as much as 5.5% after the company said it would sell up to $5 billion in stock. The SEC filing said the shares would be sold “from time to time” with “at-the-market” prices based on the company’s instructions.
According to Wedbush analyst Daneil Ives in a note to clients, “We believe this is the smart move at the right time for (Elon) Musk & Co. after the parabolic rally in shares with the appetite strong among investors to play the transformational electric-vehicle trend.”
The news comes just one day after Monday’s five-for-one stock split launched the stock more than 12% higher. Tesla shares ended Tuesday more than 170% from a 174.06 buy point in a cup with handle. The electric-auto maker is an IBD Leaderboard stock.
Stocks In Or Near Buy Zones: Atlassian, Autodesk, Marvell
Atlassian briefly broke out above a 198.51 buy point in a cup base before closing just below the new entry. Shares rallied 2.4% Tuesday.
A potential flaw is the stock’s lagging relative strength line. It should hit a new high on the breakout day or soon after, but it remains far from its May 15 highs.
Autodesk reclaimed a 251.49 buy point in a flat base Tuesday, following last week’s breakout move. The stock moved up 3.2% Tuesday and the 5% buy area runs up to 264.06.
Marvell Technology followed through on Monday’s breakout above a 37.92 entry in a six-week double bottom with a 1.1% gain Tuesday. The 5% buy zone goes up to 39.82, so the stock is squarely in range.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software leader Microsoft is trading about 2% away from new highs ahead of TikTok’s imminent sale, possibly to Microsoft or a Microsoft/Walmart combination, analysts said. A decision could come as soon as today.
For 2020, Microsoft shares are up 44.1% through Sept. 1.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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