Stocks jumped into early gains Tuesday as bonds tumbled, commodities soared and stimulus optimism buoyed market sentiment. Chipmakers showed strength, with Nvidia rising in a buy range. Bitcoin surged above $50,000, helping to boost PayPal Holdings. Salesforce.com plowed to the head of the Dow Jones today.
The Nasdaq rallied 0.4% on the stock market today, running just ahead of the Dow industrials 0.35% advance. The S&P 500 added nearly 0.4%.
On the Nasdaq 100, JD.com (JD) seized the early lead, up 4.7% after a regulatory filing revealed plans to spin off its logistics unit as an independent entity on the Hong Kong Stock Exchange. Zoom Video (ZM) and China-based Trip.com (TCOM) each rallied 4%. Trip.com remained in a buy zone above a 37.55 buy point in a 12-week cup base.
Commodities plays crowded the top of the S&P 500 as markets reacted to weather-driven power outages in Texas. Oil stocks held six of the S&P 500’s top early gains.
Auto drivetrain components maker BorgWarner (BWA) punched up more than 7%, after announcing it would acquire Germany’s Akasol in a deal valued at around $917 billion. Akasol makes higher performance lithium-ion batteries for electric vehicles and other applications. BorgWarner stock was poised for an early breakout above a 43.32 buy point in an 18-week cup base.
Gear up for the week’s market action by reading IBD’s Investing Action Plan.
Chips: AMAT Target Hikes, Nvidia Buy Range
Chip sector stocks were on the move in early trade. Applied Materials (AMAT) jumped more than 3% each, leading the Philadelphia Semiconductor Index. Analysts at Stifel, Deustche Bank and B. Riley Securities raised price targets on Applied Materials. The VanEck Vectors Semiconductor ETF (SMH) rallied 1.1%.
Salesforce Leads Dow Jones Today, Palantir Earnings
Salesforce.com (JPM) and Caterpillar (CAT) paced the Dow Jones today, up about 2% each in early trade. A top company manager said the company planned to shift its workforce to full- and part-time work-at-home status following the Covid pandemic, trimmed its real estates costs, the Wall Street Journal reported.
Salesforce stock is climbing the right side of a 14-week consolidation. It reports fourth-quarter earnings Feb. 25.
Palantir Technologies (PLTR) dropped more than 9% after reporting a surprise loss in the fourth quarter. Revenue vaulted 40%, however, to above $322 million. Management’s first-quarter and full-year revenue guidance was above analyst targets.
The IBD Leaderboard stock erased a 30% gain from a January breakout, flashing a sell signal. But the stock had since stabilized at its 21-day exponential moving average.
Hong Kong, Tokyo Rally; NatGas Spikes On Winter Weather
In Washington, Congress flagged intentions to turn its focus to President Joe Biden’s proposed $1.9 billion stimulus effort, after impeachment proceedings against former President Donald Trump wrapped up with a Senate acquittal on Saturday.
European markets struggled up into mixed afternoon trade, after Hong Kong bounced back from a five-day holiday to rally alongside Tokyo’s Nikkei 225. Hong Kong ended with a 1.9% gain, as the city eased its social distancing rules for the first time in three months. The Nikkei notched a 1.3% advance, underscoring Monday’s rally — which sent the index back above the 30,000 level for the first time in more than 30 years.
Oil prices recovered to their highest levels since the start of the pandemic on Monday, as production shut-ins due to winter weather conditions in Texas caused supply concerns. Gasoline and natural gas prices spiked Tuesday, as refinery and pipelines shutdowns, and winter heating demand charged early commodities trade.
West Texas Intermediate oil was up 0.3% to $59.63 a barrel. Brent crude futures jumped above $64 a barrel. Natural gas futures gained 5.6%. RBOB Gasoline futures gained 4.1%.
Coronavirus Update: Deaths, New Cases Continue To Decline
The decline in new coronavirus cases reported in the U.S. continued, with the seven-day average for new cases reported falling on Monday to below 88,000. That marked 35 straight days of declines and put the number at the lowest level since Nov. 2. The seven-day average reached a peak of 255,258 on Jan. 11, according to Worldometer.
Deaths begin trending lower much later than cases reported. The seven-day average for deaths reported daily hit a high of 3,447 on Jan. 26. After 20 straight days of declines, deaths fell to 2,481 on Monday.
The Centers for Disease Control and Prevention reports that 70.057 million doses of vaccine have so far been distributed in the U.S. Some 52.9 million doses, almost 76% of those distributed, have been administered. At Dec. 30, fewer than 11.5 million doses have been distributed, with about 2.1 million shots administered, an 18.2% application rate.
Bitcoin Hits $50K; 500.com Surges On Bitcoin Deal
Bitcoin briefly touched a new high above $50,000 late Monday, with prices up about 3% and trading above $49,000 early Tuesday, according to CoinDesk. Marathon Patent Group (MARA) climbed 10.1%. MicroStrategy (MSTR) jumped 4.5%. MicroStrategy announced a $600 million debt offering in order to finance the purchase of additional Bitcoin.
The Amplify Transformational Data Sharing ETF (BLOK) rallied 8.8%.
China-based 500.com (WBAI) soared more than 75% in early trade. The company announced it would acquire Blockchain Alliance Technologies Holding Co., a Cayman Islands-based Bitcoin mining and services operator.
IBD Leaderboard stock PayPal Holdings (PYPL) swung almost 3% higher. PayPal shares have felt some influence from Bitcoin price swings since early November, when the company launched a cryptocurrency trading service that deals in Bitcoin.
PayPal stock is extended, following a November breakout and a January rebound from 10-week support.
IBD 50: General, Southern Copper Rally
Generac Holding (GNRC) ran ahead of the early IBD 50 list, with a 5.7% advance. Shares ended Friday up 39% from an early January breakout. The manufacturer of emergency power generators has forged a space in the solar energy market, giving the company a broader energy solutions stance.
Southern Copper (SCCO) also rallied, up 4.2% and set to exit a buy range following a rebound from 10-week support.
Dow Jones Today: Walmart Earnings On Deck
There is no earnings activity on the Dow Jones today, with Walmart (WMT) set to turn in the week’s only blue-chip report on Thursday. Home Depot (HD) reports next Tuesday. Salesforce.com bats clean up on the Dow’s December-quarter reporting season on Thursday Feb. 25.
Walmart is in an 11-week flat base with a standard buy point at 153.76. The pattern offers an alternative buy point for more aggressive investors at 150.03.
Home Depot has built a 24-week base with a standard buy point at 293.05, and an early alternative at 285.87.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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