The Dow Jones Industrial Average briefly tumbled more than 400 points early Tuesday, with losses accelerating after weak U.S. retail sales data. Tesla surged as much as 12% on S&P 500 inclusion, while rival Nio pared gains after a 6% jump in morning trade. Home Depot and Walmart slid on earnings results.
Microsoft and Tesla are both IBD Leaderboard stocks.
Dow Jones Today: Retail Sales
On Tuesday, the Dow Jones Industrial Average fell 0.7%, while the S&P 500 moved down 0.4%. The tech-heavy Nasdaq composite lost 0.1% in morning trade after cutting losses.
U.S. Stock Market Today Overview
Last Update: 10:42 AM ET 11/17/2020
Early Tuesday, the Commerce Department said U.S. retail sales increased 0.3% in October, missing Econoday’s 0.4% consensus estimate. Meanwhile, September’s retail sales were revised down to a 1.6% gain instead of a 1.9% jump.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 32.9% for the year through Monday’s close. Meanwhile, the S&P 500 is up 12.3%, while the Dow is up 4.9% year to date, through the Nov. 16 close.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 11.5 million on Tuesday. Total virus-related deaths rose past 252,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 55.5 million Tuesday, with more than 1.33 million virus-related deaths.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the stock market is back in a new uptrend after a bullish follow-through day on Nov. 4.
Monday’s Big Picture commented, “IBD’s enterprise software industry group exemplifies how quickly the stock market has cooled on coronavirus plays. The group ranked in the top 15 for much of October, but is now No. 87 for six-month relative performance among 197 industries tracked by IBD.”
Investors should use the stock market strength as a go-ahead to buy new breakouts. Start slowly with new purchases and see how they perform. After raising cash during the recent correction, don’t rush to be fully invested all at once. Try some new buys. If they work, you can add to them; if not, you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance.
Dow Jones Earnings: Home Depot, Walmart
Home Depot reported better-than-expected third quarter earnings early Tuesday, with blowout same-store sales. Despite the earnings beat, shares fell 3% to move further away from a 293.05 buy point in a flat base, according to MarketSmith chart analysis.
Home Depot is one of the top Dow Jones stocks for 2020. Year to date, the home-improvement retailer is up 28.0% through Monday’s close.
Walmart slid 1% despite reporting better-than-expected third-quarter earnings, with e-commerce sales continuing to boom.
Shares of the Dow Jones retailer are trying to hold above a 151.43 buy point in a flat base.
Stocks In Or Near Buy Zones: Facebook, Palo Alto
According to the IBD Stock Checkup, Facebook stock has a 98 out of a perfect 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.
Cybersecurity leader Palo Alto Networks broke out above a double bottom’s 260.25 buy point with a 7.7% advance Monday. The 5% buy zone runs up to 273.26, so the stock is now extended. Shares rose 1.3% in morning trade.
The stock got some airplay on the IBD Live show Monday.
Chinese electric-car maker Nio spiked as much as 6% ahead of the company’s earnings results after the stock market close. Wall Street expects the electric-SUV maker to lose 15 cents a share vs. a net loss of 33 cents per share a year ago. Revenue is seen jumping 144% to $628 million.
On Nov. 13, Nio advanced as much as 248% past a 15.55 buy point in a cup with handle.
Tesla Stock Nears New Buy Point
Tesla stock briefly surged more than 12% early Tuesday on news it would be added to the S&P 500 index on Dec. 21.
The IBD Leaderboard stock is rapidly approaching a 466 buy point in an awkward cup with handle.
According to IBD Leaderboard commentary, “The handle’s midpoint of 422.50 is slightly higher than the midpoint of the cup (416.19) itself. That’s good. One risk not to ignore: the new base is late stage, following advances from cup with handle bases and a high, tight flag that also counted as a base. So, the latest pattern has higher risk.”
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved down 0.7% Tuesday, as shares continue their rebound from their 50-day line. Apple stock is tracing a new base with a 138.08 buy point. An early entry exists at 125.49.
The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 63.9% advance through Monday. Salesforce.com (CRM) is the No. 2-performer, rising 53.7% year to date.
Software giant Microsoft moved down 0.5% Tuesday, looking to snap a two-day win streak. Shares are above their 50-day line, as they trade about 7% away from their all-time high.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 37.8% through the Nov. 16 close.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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