The Dow Jones Industrial Average rallied more than 275 points Thursday, as the House cleared the way for the nearly $2 trillion stimulus bill. Apple stock advanced on Apple car buzz. PayPal surged on strong earnings, while Qorvo and Qualcomm dived. GME stock dived another 27%.
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Among the Dow Jones leaders, Apple (AAPL) was up over 1%, while Microsoft (MSFT) fell 0.4% in today’s stock market. Nike (NKE) is approaching a new buy point amid this week’s bullish move.
Tesla (TSLA) threatened to extend Wednesday’s over-2% drop, falling more than 1% in morning trade. Tesla stock is near a new high.
Chip leaders Qorvo (QRVO) and Qualcomm (QCOM) dived on earnings results, while PayPal (PYPL) jumped to all-time highs in Thursday trade.
Among top stocks in or near buy zones, Farfetch (FTCH), Palo Alto Networks (PANW) and ServiceNow (NOW) are in buy range after recent breakouts.
Short-squeeze target GameStop (GME) tumbled as much as 27% in morning trade, while AMC Entertainment (AMC) slid 8%.
Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. ServiceNow was featured in this week’s Stocks Near A Buy Zone.
Dow Jones Today: Stimulus Update
On Thursday, the Dow Jones Industrial Average traded up 0.9%, while the S&P 500 moved up 0.6%. The tech-heavy Nasdaq composite rallied 0.4% in midday trade.
Late Wednesday, the House voted to clear the way for party-line approval of President Joe Biden’s $1.9 trillion stimulus package. The 218-to-212 nearly party-line vote passed a budget bill that would allow the Senate to pass the relief package with a simple majority.
Among exchange traded funds, Innovator IBD 50 (FFTY) traded up 1% Thursday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) rose 0.2%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved up 0.6%.
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Stock Market Pulls Back, Finds Support
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 finding support near key levels during the current pullback.
Wednesday’s Big Picture commented, “After two straight bullish gains for the S&P 500 and Nasdaq composite, it wouldn’t have been surprising to see some profit-taking Wednesday. That turned out to be the case, as sellers came into the stock market during the final hour trading. The main stock indexes closed with minor changes.”
Due to the recent strength, investors can shift back to an offense stance, with an understanding that there are still good reasons for caution. Look for stocks that are breaking out above new buy points, like Palo Alto Networks and ServiceNow.
Focus on stocks that showed strong relative strength during last week’s sell-off. They could be some of the market’s leaders if the indexes are able to continue their rebounds.
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Dow Jones Stocks: Nike
Dow Jones stock Nike is tracing a new flat base with a 148.05 buy point, according to IBD MarketSmith chart analysis. The stock moved up 0.8% Thursday.
Shares of the retailer recently reclaimed their 50-day moving average line, and are about 6% off their 52-week high.
PayPal Earnings
IBD Leaderboard stock PayPal surged 8% after reporting strong Q4 earnings late Wednesday. PayPal earnings climbed 29% to $1.08 an adjusted share, while revenue rose 23% to $6.12 billion.
PayPal stock is extended after a rebound from its 50-day moving average support level.
Stock Market Earnings: Qorvo, Qualcomm
Top chip stocks Qorvo and Qualcomm both tumbled after reporting earnings after the stock market close Wednesday.
Qorvo reported EPS of $3.08 on revenue of $1.09 billion, beating estimates. Shares declined 5%, falling through their 50-day support level. The stock is about 3% below a 171 buy point in an ascending base.
Qualcomm earnings grew 119% to $2.17 a share, as sales jumped 63% to $8.23 billion. Analysts forecast earnings of $2.10 a share on $8.27 billion in revenue.
Qualcomm stock tumbled over 8% in morning trade. Shares are below their key 50-day line, about 8% below a 161.17 flat-base buy point. The stock triggered the 7%-8% loss-cutting sell rule.
Stocks To Watch: Farfetch, Palo Alto, ServiceNow
New IBD Leaderboard stock Farfetch remains in the 5% buy area above a 65.64 buy point in a consolidation pattern. The buy range goes up to 68.92. Shares lost nearly 2% Thursday morning.
According to Leaderboard commentary, “Farfetch is clearing a narrow consolidation after a solid test of the 10-week moving average and is in buy range. “
Cybersecurity leader Palo Alto Networks is in the 5% buy area past a 375.10 buy point in a flat base. The 5% buy zone goes up to 393.86. Shares dropped 0.7% early Thursday and are just above the new entry.
ServiceNow is in the 5% buy zone above a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis, following Tuesday’s breakout move. Shares moved up 0.1% Thursday morning.
According to IBD Stock Checkup, NOW stock shows a strong 96 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.
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GME Stock Short Squeeze
The GME stock short squeeze faltered again Thursday morning, as shares tumbled as much as 27%. Through Wednesday’s close, GME stock had crashed 71% this week.
Among other short-squeeze targets, AMC stock slid over 10% in morning trade, and remains about 60% off its recent high.
Tesla Stock
Tesla stock looked to extend Wednesday’s 2.1% fall, falling about 1% Thursday morning. Shares are just 4% away from all-time highs.
The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.
On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 83% % above a 466 buy point in a cup with handle amid Thursday’s action.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple rallied over 1% Thursday after reports said the iPhone maker would make an Apple car with South Korea’s Kia. A deal could come Feb. 17 with the electric vehicles launching in 2024, the report added. Initially, Apple and Kia are said to be aiming for 100,000 Apple cars a year.
Shares are again approaching their 138.89 buy point in a cup with handle.
Meanwhile, Microsoft fell 0.4% Thursday morning, easing from all-time highs.
Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is extended past the 5% buy zone that goes up to 239.63.
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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