Dow Jones Futures Rise As President Trump Reportedly Wants 'Big Deal' On Stimulus Again; Alibaba Leads Three Breakouts – Investor's Business Daily

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Dow Jones futures rose modestly late Thursday, along with S&P 500 futures and Nasdaq futures, amid a report that President Donald Trump once again wants a “big deal” on new coronavirus relief aid. The stock market rally enjoyed modest gains Thursday amid mixed signals for a second stimulus deal.

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Alibaba (BABA) cleared an official buy point on Thursday. PulteGroup (PHM) and Pool Corp. (POOL), two housing-related plays, did well.

But it was a mixed session for leading stocks, with many reversing off highs or retreating. Fastly stock and Etsy (ETSY) pulled back below buy points after breaking out Wednesday following sharp run-ups.

As for megacap techs, Apple (AAPL), Amazon.com (AMZN) and Microsoft (MSFT) marked time around key support. Tesla (TSLA) edged higher after reversing from solid morning gains. China EV Tesla rival Nio (NIO) reversed lower after appearing to clear a short consolidation in the morning.


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Stimulus Deal Headlines

House Speaker Nancy Pelosi said Thursday that she’s not interested in stand-alone aid deals, such as airline relief, without a coronavirus agreement.

That came after President Trump tweeted Tuesday afternoon that he was ending talks on a broad stimulus deal until after Election Day. Hours later, he tweeted out calls for airline aid and other one-off bills.

After the close, Axios reported that Trump phoned House Majority Leader Kevin McCarthy and said that he does want a “big deal” after all. Trump reportedly was concerned by the stock market reaction Tuesday. CNN also reported that Trump favors a broad stimulus deal.

Of course, even if talks are back on, that doesn’t mean a coronavirus stimulus deal is close. Democrats have passed a $2.2 trillion measure, while Republicans don’t want to go higher than $1.6 trillion. The two sides also have key differences on where the money would go.

Alibaba stock, Microsoft and Tesla stock are on IBD Leaderboard. Alibaba and Microsoft are IBD Long-Term Leaders, while Pool stock is on the watchlist. Apple and Alibaba are on SwingTrader. Alibaba and Amazon stock are on the IBD 50.

After the close, NXP Semiconductors (NXPI) reported strong preliminary Q3 revenue. NXP Semi stock popped 5% overnight after closing in range of a 133.04 buy point from a flat base. NXPI also is set to clear its February all-time high.

Dow Jones Futures Today

Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures advanced 0.4%, and Nasdaq 100 futures climbed 0.3%.

Dow Jones futures showed a relatively muted initial reaction to the latest Trump stimulus news. Investors could be getting numb to the whipsaw headlines. They also might be waiting for confirmation of Trump’s change of heart and want to see real progress toward an actual “big deal.”

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


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Coronavirus News

Coronavirus cases worldwide reached 36.73 million. Covid-19 deaths topped 1.06 million.

Coronavirus cases in the U.S. have hit 7.82 million, with deaths above 217,000.

Stock Market Rally Thursday

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 28425.71 +122.25 +0.43
S&P 500 (0S&P5) 3446.85 +27.40 +0.80
Nasdaq (0NDQC ) 11420.98 +56.38 +0.50
Russell 2000 (IWM) 161.82 +1.78 +1.11
IBD 50 (FFTY) 38.74 +0.13 +0.34
Last Update: 4:10 PM ET 10/8/2020

The stock market rally opened with solid gains, then treaded water for the rest of the day.

The Dow Jones Industrial Average rose 0.4% in Thursday’s stock market trading. The S&P 500 index climbed 0.8%, closing near session highs. The Nasdaq composite gained 0.5%. All three indexes hit their best levels since early February. The Russell 2000 popped 1.1% to its highest level since late February.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.1%, with Microsoft stock a key holding. The VanEck Vectors Semiconductor ETF (SMH) popped 1.2%, but the current leaders generally had a quiet session.

Apple stock fell 0.1% and Amazon shed 0.2%, both edging below their 50-day moving averages. Microsoft inched up 0.4% and finished just below its 50-day.

Tesla slashed a 3.2% intraday gain to close up 0.15%. But shares are holding above their 21-day exponential moving average and starting to quiet down. A TSLA stock base could form after this week.

Tesla late Thursday said it’ll release third-quarter earnings on Oct. 21. That earnings report — along with any guidance about production, deliveries or progress on various projects — could be the catalyst for big Tesla stock gains or losses.

New Breakouts

Alibaba stock rose 1.4% to 300.54, clearing a 299.10 flat-base buy point in volume that was slightly above normal. On Wednesday, shares of the Chinese e-commerce giant cleared a pseudo-handle, offering an early entry. Investors could have bought at other points along the way, notably when BABA stock rebounded from its 50-day line and prior buy point.

Pulte stock climbed 3.9% to 48.97, clearing a 48.10 flat-base buy point, according to MarketSmith analysis. LGI Homes (LGIH), D.R. Horton (DHI) and Taylor Morrison (TMHC) all reclaimed buy points Thursday.

Pool stock rose 2.8% to 340.85, clearing a 338.98 buy point from a cup-with-handle base and hitting a record high intraday. The distributor of supplies for swimming pools is benefiting from the stay-at-home trend, as Americans spend money on sprucing up their homesteads.

Pool stock was just added to the S&P 500 index. It was Thursday’s IBD Stock Of The Day.


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Fastly And Etsy Stock

Fastly fell 3.6% to 115.72, dropping below a 117.89 buy point after spiking 20% on Wednesday. Etsy stock retreated 2.2% to 139.54, slipping below a 141.51 cup-base entry. Shares rose 6% on Wednesday, continuing a powerful three-week run.

Many breakouts will test or undercut the buy point. But the odds are much higher when a stock runs straight up from the bottom. Perhaps Fastly stock and Etsy will simply keep running after a one-day pause. But they could also consolidate for a few days around the buy point. If and when they clear that high handle, the odds would be much better that the stock will keep rising.

But it’s no guarantee. Nio stock rose 4.1% intraday, moving above a short trend line in its high handle next to a short consolidation. But it reversed to end down 0.6%. The pattern could still work though.


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Stock Market Analysis

In the current stock market rally’s short history, leading stocks have been stellar while the major indexes have been merely solid. On Thursday, the major indexes continued to climb while leading stocks were uneven.

But most leading stocks didn’t suffer much chart damage, including the likes of Fastly and Etsy. In fact, a market pause over a few days could create handles or other buying opportunities on leading stocks.

The stock market rally has moved higher despite whipsaw headlines on President Trump’s health and stimulus over the past week. Sure, stocks have seen some daily or intraday negative reversals, but they’ve quickly bounced back. Even though the odds of a stimulus bill are fading, the major indexes are at their best levels in weeks. Leading stocks are doing well.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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