The Dow Jones Industrial Average was lagging in a mixed session Wednesday that saw the other major indexes make gains. Alibaba (BABA) stock surged on news its fintech arm, Ant Group, reached a deal with Chinese regulators. Meanwhile, Boeing (BA) was the best performing blue chip, while GameStop (GME) was fighting back after two brutal down days.
Amazon (AMZN) edged higher and Google parent Alphabet (GOOGL) surged after both reported earnings. Among electric-vehicle stocks, Tesla (TSLA) reversed lower as Chinese rival Nio (NIO) and General Motors (GM) made gains.
Meanwhile, the coronavirus pandemic is continuing to rage, with the cumulative number of confirmed Covid-19 cases in the U.S. passing the 27 million mark Wednesday, according to the Worldometer data tracker. Total virus-related deaths in the U.S. passed the 450,000 mark.
Nasdaq, S&P 500 Gain
The Nasdaq was the best performing major index, but its weak gain was just over 0.1%. As well as Alphabet, the other top performer was Pinduoduo (PDD), which gained more than 7%.
The S&P 500 turned in an even weaker gain of almost 0.1%. Top performers included Avery Dennison (AVY), which rose more than 6%, and Devon Energy (DVN). Video game maker Electronic Arts (EA) was a major laggard, falling almost 7% after reporting earnings.
Volume was lower compared with the same time on Tuesday. It dipped by almost 9% on the Nasdaq and tumbled more than 25% on the NYSE.
U.S. Stock Market Today Overview
Last Update: 11:54 AM ET 2/3/2021
Sectors were struggling, with a majority in the red. Energy and communication services were faring best, while real estate was the biggest laggard.
Small caps were clubbed lower, with a weak early rally attempt failing. The Russell 2000 fell around 0.6%.
Growth stocks were also having a tough day, with the Innovator IBD 50 ETF (FFTY) falling around 0.6%. Dynatrace (DT) was the star performer on the IBD 50, gaining more than 12% after reporting strong earnings.
Boeing Stock Gain Not Enough For Dow Jones
The Dow Jones Industrial Average was the worst performing major index as it managed to turn in a loss of almost 0.2%. It stalled a move to pull away from its 50-day moving average.
Boeing stock was the best performing component, gaining almost 2%. BA stock is climbing back toward its own 50 day line, and is aiming to gain for the third day in a row.
Microsoft (MSFT) was another noteworthy performer, gaining almost 1.5%. It is now well clear of a 232.96 buy point as it gained more than 3%. It broke out from a consolidation last week, according to MarketSmith analysis. An early entry also existed at 227.28.
Microsoft stock has a strong IBD Composite Rating of 95. It’s up almost 9% so far in 2021.
Amgen was the biggest laggard, falling more than 3% on a disappointing fourth-quarter report. While it beat on earnings, it served up weak guidance.
GameStop Stock Strikes Back
GameStop stock was fighting back after falling sharply on Monday and Tuesday. It managed to squeeze out a gain of almost 4%, though it was off highs.
This will not be enough to save the momentum trade, as it is still down more than 70% so far this week. It is well off last week’s high of 483.
Despite the fall, GME stock retains a perfect Relative Strength Rating of 99, helped in part by a 400% gain last week.
It has been swinging wildly due to coordinated trading by retail investors using the WallStreetBets Reddit chat room. Other targeted stocks were also gaining. Cinema chain AMC (AMC) rose 7%, while BlackBerry (BB) rose more than 1%
Alibaba Stock Makes Bullish Move
Alibaba stock was up more than 5%. It bullishly pulled away from its 50- and 200-day moving averages. It is now building the right side of a 15-week consolidation pattern. Alibaba is an IBD Long-Term Leader.
The stock was boosted on the news that founder Jack Ma’s Ant Group will be turned into a financial holding company. It comes after the firm struck a deal with Chinese regulators. All of the firm’s businesses are expected to be put into the holding company. This includes technology offerings such as blockchain and food delivery.
Amazon Stock, GOOGL Stock Mixed On Earnings
Amazon stock was mostly flat after falling 1.3% intraday. Shares are trading below a buy point at 3,552.35, after forming a consolidation pattern.
Late Tuesday, Amazon reported a 118% earnings gain and a 44% revenue advance, blowing past Wall Street targets. Founder Jeff Bezos announced he would hand off his Chief Executive role to cloud services chief Andy Jassy, adopting the new title of executive chairman. A half dozen analysts hiked their price targets for AMZN stock to above 4,000.
It was a much better day for Google parent Alphabet. It gapped up out of a flat base buy zone, MarketSmith analysis shows. The ideal buy point was 1843.93 and the initial breakout was on Jan. 20.
It came after the firm’s fourth-quarter earnings and revenue crushed estimates as its core search advertising business rebounded amid the coronavirus pandemic.
Tesla Stock Stalls As Nio Stock Rises
IBD Leaderboard stock Tesla had been rallying after last week’s struggles, but the move looks set to stall. It fell by almost 2%. Tesla’s pullback saw it trigger an 8% sell rule from a high-tight-flag pattern.
Tesla stock still has a best-possible IBD Composite Rating of 99. Its stellar stock market performance is key. While it has given up some gains, it still is up more than 21% so far in 2021.
Chinese rival Nio managed to turn in a gain of almost 4%. It could look to build a new base with a 67.09 buy point. A previous breakout from a cup base with a 57.30 buy point failed and it fell into loss-taking zone.
Auto giant General Motors also rose, gaining more than 4%. GM stock is once again closing in on a profit-taking zone after breaking out from a cup base on positive EV news. The buy point was 46.81.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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