Dow Jones Futures: Market Rally Sells Off – Investor's Business Daily

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Dow Jones futures were in focus late Tuesday, along with S&P 500 futures and Nasdaq 100 futures, after the stock market rally sold off on President Trump’s coronavirus stimulus tweets. Tech giant Apple announced a product event that will likely reveal a new iPhone next week.

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The tech-heavy Nasdaq fell 1.6% Tuesday. The S&P 500 lost 1.4%, while the Dow Jones Industrial Average dropped 1.3%, or 375 points.

Among stock market leaders, Apple (AAPL) and Microsoft (MSFT) declined 2.9% and 2.1%, respectively.

Stocks in or near buy zones in the new stock market rally are Alibaba (BABA), Marvell Technology (MRVL), ServiceNow (NOW), Twilio (TWLO) and Veeva Systems (VEEV).

Alibaba, Microsoft, ServiceNow, Tesla (TSLA) and Veeva Systems are all IBD Leaderboard stocks.

Dow Jones Futures: Trump Stimulus Tweets

Late Tuesday, Dow Jones futures hadn’t started trading yet. The extended hours trading session will begin 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.

Midday Tuesday, President Donald Trump sparked a stock market sell-off in a series of tweets that said he would no longer be negotiating with Democrats on the coronavirus stimulus deal until after the election.

“Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business …”

Among exchange traded funds, Innovator IBD 50 (FFTY) fell 0.6% Tuesday. The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF moved down 1.8%. Meanwhile, the SPDR S&P 500 ETF (SPY) lost 1.4%.

Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 26.3% for the year through Monday’s close. Meanwhile, the S&P 500 is up 5.5%, while the Dow is down 1.4% year to date, through the Oct. 5 close.

Trump Coronavirus Recovery

President Trump left Walter Reed Medical Center Monday night, returning to the White House where he will continue his coronavirus treatment. Trump will conclude his five-day course of remdesivir on Tuesday.

According to the White House physician Dr. Sean Conley in a memo on Tuesday afternoon, “This morning the President’s team of physicians met with him in the Residence. He had a restful first night at home, and today he reports no symptoms.”

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 27770.65 -377.99 -1.34
S&P 500 (0S&P5) 3360.75 -47.88 -1.40
Nasdaq (0NDQC ) 11154.60 -177.88 -1.57
Russell 2000 (IWM) 156.63 -0.44 -0.28
IBD 50 (FFTY) 37.89 -0.22 -0.58
Last Update: 4:44 PM ET 10/6/2020

Coronavirus Updates

According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 7.6 million on Tuesday. Total virus-related deaths topped 215,000.

The cumulative total of Covid-19 cases confirmed since the start of the outbreak worldwide topped 35.7 million Tuesday, with more than 1.04 million virus-related deaths.

Coronavirus Stock Market Rally

According to IBD’s The Big Picture, the coronavirus stock market rally is trying to shrug off the recent institutional selling, as the major stock indexes regain key levels.

Monday’s Big Picture reported that, “Higher volume Monday (or Thursday) would have been bullish. It would have marked a follow-through day on the Nasdaq, reinforcing last week’s bottoming signal in the Dow Jones Industrial Average. The S&P 500 would have registered its own follow-through day on Monday, but not on Thursday, in which its gain was limited to 0.5%.”

Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance.


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Apple iPhone Event

Apple announced a new product launch event on Oct. 13, where it’s expected to reveal the next model of the iPhone. Apple titled next week’s event “Hi, Speed,” a likely reference to the high-speed capabilities of the 5G iPhones. The company did not specify what it plans to announce, but analysts widely expect the iPhone 12 series handsets to make their debut.

Apple shares fell 2.9% Tuesday, giving back a large portion of Monday’s 3.1% gain. Apple shares fell back below their key 50-day support level, according to MarketSmith chart analysis.

The iPhone maker is about 57% above a 72.15 buy point in a cup-with-handle base. The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 54.2% advance through Tuesday’s close. Recent Dow Jones 30 addition Salesforce.com (CRM) is the No. 2 performer with a 54% year-to-date advance.

Stock Market Rally: What To Do Next

After the Dow’s bullish signal switched the market back into a confirmed uptrend, investors are cleared to start buying new breakout stocks. The best candidates are those that held up the best during the recent stock market weakness. Keep a close eye on stocks with strong relative strength lines. These stock ideas could become stock market leaders.

Use MarketSmith features like the RS Line Blue Dot to easily spot such stock candidates. The RS Line Blue Dot is assigned to stocks whose RS lines are making new highs while the stock is basing or breaking out.

Stocks Near Buy Zones: Alibaba, Marvell, ServiceNow, Twilio, Veeva

Alibaba is approaching a 299.10 buy point in a flat base. Shares rallied 1.5% Tuesday and are about 1% away from the entry.

The stock’s RS line hit a new high in recent sessions.

Monday’s IBD 50 Stocks To Watch pick, Marvell Technology, is breaking out above a 41.44 buy point in a flat base. Shares are in the 5% buy zone that runs up to 43.51. The stock tacked on 1.35% Tuesday.

According to the IBD Stock Checkup, MRVL stock shows a 98 out of a best-possible 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

IBD Long-Term Leader ServiceNow is trying to break out above a 501.92 entry in a flat base. Shares fell 2% on Tuesday, and are about 2% below the new buy point.

Friday’s IBD Stock Of The Day, Twilio, ended Tuesday in the 5% buy zone past a 283.44 buy point in a double bottom, according to MarketSmith chart analysis. The 5% buy range tops out at 297.61. Shares jumped 4.1% Tuesday.

Twilio was featured in this week’s Stocks Near A Buy Zone column.

Veeva Systems is approaching a flat base’s 298.86 buy point amid a 2.7% gain Tuesday. Meanwhile, shares continue to rebound from their 50-day support level.

Veeva was added to IBD Leaderboard Tuesday.


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Dow Jones Leaders: Microsoft

Among the Dow Jones stocks, software leader Microsoft fell 2.1% Tuesday, as the stock continues to find strong resistance around its 50-day line.

On Sept. 8, shares closed below their 50-day support level for the first time since the May 5 breakout above a cup-with-handle’s 180.10 buy point.

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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