Stocks rebounded from last week’s steep drop on election eve, as the Dow Jones Industrial Average rallied over 300 points in midday trade.
The Dow Jones industrials rose 1.2% and the S&P 500 gained 0.9%, but the Nasdaq reversed 0.1% lower in the stock market today. Small caps tracked by the Russell 2000 gained 1.7%. Volume was mixed, lower on the NYSE and higher on the Nasdaq, vs. the same time Friday.
The stock market outlook was downgraded to “market in correction” on Friday, as the major indexes wrapped up the week with losses of more than 5% each. That means investors should avoid new purchases and limit exposure. It’s OK to move to 100% cash during a correction and wait for a follow-through day.
Spiking coronavirus cases and the U.S. presidential election between incumbent Donald Trump and former Vice President Joe Biden have been in focus.
Amid recent volatility, the Nasdaq’s year-to-date gain has been cut to 22%, while the S&P 500 was up 1% through Friday’s close. The Dow is down 7% and the Russell 2000 is now 8% underwater this year. Read The Big Picture for detailed daily market analysis.
Market In Correction
The Dow Jones index, which wrapped up September with a 2.3% loss, has fallen below its 50-day moving average. On Sept. 30, the IBD stock market outlook was upgraded to “confirmed uptrend” from “market in correction.” But on Monday, the outlook was downgraded to “uptrend under pressure” as stocks sold off.
U.S. Stock Market Today Overview
Last Update: 12:14 PM ET 11/2/2020
Worldwide coronavirus cases are approaching 47 million, with more than 1.2 million deaths, according to Worldometer. In the U.S., confirmed cases are close to 9.5 million, with the death toll near 237,000.
All but three Dow Jones stocks were up at midday.
Dow Winners And Losers
Honeywell (HON) led the blue chip index with a 4.2% gain to retake its 50-day moving average. Late Friday, the diversified giant reported Q3 earnings and sales that fell less than expected and topped views. Honeywell stock is about 7% away from a 184.16 buy point of a steep base, according to MarketSmith chart analysis.
Apple gave up 0.7%, extending its 5.6% drop from Friday. The stock has been working on a cup with handle with a 125.49 buy point, but is moving further below its 50-day line.
Solar, automakers and building-related stocks led the upside among IBD’s 197 industry groups. But airlines, restaurants and other retailers lagged.
Electric Car Makers Race Ahead
Nio (NIO) surged 14% early, before paring its gain to 4%. The Chinese electric car maker said it delivered 5,055 vehicles in October, up 100% year over year. Year-to-date deliveries more than doubled to 31,430 vehicles, for a 111% jump.
Rival XPeng Motors (XPEV) surged nearly 16% before halving its gain to 7.6%. It reported 3,040 deliveries in October, up 229% on a year-over-year basis. Year-to-date deliveries rose 64% to 17.117.
Li Auto (LI), up 16% in early trade, held a 10% gain at midday. The Beijing-based electric car maker said October deliveries of its One SUV rose 5% month over month to 3,692. Li began volume production in November 2019.
Li cleared a 21.96 buy point of a cup with handle in heavy trade. Shares remain in potential buy range, which tops out at 23.06. But keep in mind the market is in correction, which makes all purchases highly risky.
Tesla (TSLA) motored 2% higher in slower-than-usual turnover as it builds a cup-with-handle base with a 466 buy point. Shares of the U.S. electric car leader are about 20% off their 52-week high. Tesla is an IBD Leaderboard stock.
Amazon.com (AMZN) and Horizon Therapeutics (HZNP), down 1% each, were among the few decliners in the IBD 50 growth stock index. Amazon is working on a cup with handle with a 3,496.34 buy point. It slipped below its 50-day line on Friday.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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