The Dow Jones Industrial Average hit session highs Thursday midday amid Senate Majority Leader Mitch McConnell’s stimulus comments, rising more than 175 points to again top the 30,000 level. Tesla stock raced higher on an analyst upgrade. Hot IPO stocks CrowdStrike and Snowflake surged on earnings.
Tesla (TSLA) advanced more than 3% early Thursday on an analyst upgrade, approaching Monday’s record high. Hot IPO stocks CrowdStrike (CRWD) and Snowflake (SNOW) reported earnings late Wednesday. CrowdStrike soared 15%, while Snowflake reversed from early losses to surge 11%.
Dow Jones Today: Coronavirus Stimulus
On Thursday, the Dow Jones Industrial Average gained 0.5%, while the S&P 500 moved up 0.2%. The tech-heavy Nasdaq composite rallied 0.6% in midday trade.
Midday Thursday, Senate Majority Leader Mitch McConnell said he has seen “hopeful signs” that Congress can reach a coronavirus stimulus deal before the end of the year in comments made on the Senate floor.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 37.6% for the year through Wednesday’s close. Meanwhile, the S&P 500 is up 13.6%, while the DJIA is up 4.7% year to date, through the Dec. 2 close.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 14.3 million on Thursday. Total virus-related deaths rose past 279,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 65.0 million Thursday, with more than 1.5 million virus-related deaths.
Coronavirus Stock Market Rally
November became a key month for the stock market, after IBD’s The Big Picture noted the market had returned to a new uptrend following a bullish follow-through day on Nov. 4.
Wednesday’s Big Picture commented, “The stock market turned in another fine performance Wednesday, overcoming a weak open and ending mixed and little changed. But below the surface, several highflying recent IPOs took big hits … .”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then 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. Fair Isaac (FICO) is the most recent addition to the list, added on Nov. 13. Shares are extended after they cleared resistance around 450.
Dow Jones Stocks: Apple
Dow Jones stock leader Apple is trading just above an aggressive entry at 122.09 after Tuesday’s breakout move. Shares moved down 0.25% Thursday morning.
Another aggressive entry exists at 125.49 while the conventional buy point, for now, is 138.08, according to MarketSmith chart analysis.
The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 67.7% advance through Wednesday.
Stock Market Earnings: CrowdStrike, Snowflake
CrowdStrike swung to a profit in the October quarter, topping views, while revenue also beat Wall Street estimates. The company earned an adjusted 8 cents a share, while revenue jumped 86% to $232.5 million.
The stock soared 16% to regain a 154 buy point in a cup base. On Wednesday, the stock triggered the 7%-8% loss-cutting rule from the entry.
Snowflake surged over 13% after the company’s Q3 results. Snowflake reported a loss of $1.01 per adjusted share versus a $1.92 loss in the year-earlier period. Overall revenue jumped 119% to $159.6 million, while Snowflake reported product revenue up 115%, to $148.5 million.
On Wednesday, the hot IPO stock triggered a round-trip sell signal from a 301.10 buy point in a cup with handle. Investors should sell to avoid taking a loss when a stock gives up the entirety of a double-digit gain.
Snowflake was removed from IBD Leaderboard on Wednesday. According to Leaderboard commentary, “Snowflake was removed from Leaderboard, where it had been a quarter position. Shares slid below the 301.10 buy point though they bounced back above it. The stock has now erased a gain of more than 10% from the entry, which is a round-trip sell signal.”
Stocks In Or Near Buy Zones: Facebook, PayPal
FANG stock Facebook continues to trace a cup with handle, which shows a 297.48 buy point, according to MarketSmith chart analysis. Shares fell 0.8% Thursday morning and are about 4% from the entry. A key flaw is the stock’s lagging RS line.
According to IBD Stock Checkup, FB stock boasts 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.
PayPal gave up its 215.93 buy point in a cup base Wednesday with a 1.8% drop. Shares moved up 1.1% Thursday morning and are back at the entry.
Tesla Stock Jumps On Upgrade
IBD Leaderboard stock Tesla raced more than 3% higher early Thursday after Goldman Sachs upgraded Tesla stock from neutral to buy with a 780 price target. Shares are just shy of Monday’s record highs. On Monday, Tesla stock set a record high at 607.80 before reversing lower.
On Nov. 18, shares broke out above a 466 buy point in an awkward cup with handle and are about 20% from the buy point.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved down 0.1% Thursday. Shares are again testing the 50-day support level.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 36.6% through the Dec. 2 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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