Tech stocks led the market into sharp early losses Tuesday, ahead of Senate testimony from Fed Chief Jerome Powell. The $1.9 trillion federal stimulus package moved forward in the House late Monday, helping to lift oil prices and some pandemic reopening plays. Earnings news ignited ZoomInfo, and sent Nexstar Media into a buy range. Meanwhile, Home Depot swung low on the Dow Jones today, following its fourth-quarter report.
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The Nasdaq Composite unwound 3.5% at the starting bell as Baidu (BIDU) and Tesla (TSLA) dropped more than 11% each at the starting bell. The S&P 500 opened to a 1.4% loss. The Dow industrials shed more than 200 points, down 0.7%. Procter & Gamble (PG) topped the Dow Jones today, rising nearly 3%.
Etsy (ETSY), Tesla and Enphase Energy (ENPH) traded lowest among S&P 500 stocks. CBRE Group (CBRE) and Extra Storage (EXR) led, up more than 5% each on earnings news.
Earnings News: ZoomInfo Spikes, Nexstar Breaks Out
In earnings news, Nexstar Media Group (NXST) and IBD Leaderboard stock ZoomInfo (ZI) rose after reporting results late Monday.
ZoomInfo rallied more than 10% after topping analysts’ fourth-quarter revenue and earnings views late Monday. At least four analysts raised price targets on the stock early Tuesday. Piper Sandler weighed in at the top of the list with a 70 price target. ZoomInfo stock has been volatile, reversing an 11% advance from a Feb. 3 breakout and diving back below the 53.18 buy point — as well as cutting support at its 21-day exponential moving average on Monday.
Technically, the pullback triggered a sell rule, but it stopped short of setting off the automatic stop-loss rule. Tuesday’s premarket action points to the stock retaking the buy point in early trade, a valid buy opportunity. But investors should be sure to mind the shifting status of the uptrend, especially before diving into volatile young stocks with recent initial public offerings.
Texas-based television broadcaster Nexstar Media Group popped 4.6% after its healthy fourth-quarter report. The move sent shares into a buy range above a 131.10 buy point in a 12-week ascending base. The buy range runs to 137.66.
Dow Jones Today: Home Depot Breaks Support
Home Depot (HD) crumbled 5% on the Dow Jones today, despite reporting a strong fourth-quarter earnings and revenue beat late Monday. The company also increased its quarterly dividend 10%, to $1.65 per share.
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The drop sent Home Depot stock up to cut below its 10-week moving average. The stock has been seesawing above and below the line since August, forming in the process a 26-week flat base. The base has a 293.05 buy point. Shares ended Monday 6% below that entry.
Stimulus Set For House Floor Vote
In Washington, the House Budget Committee passed President Joe Biden’s $1.9 trillion American Rescue Plan Monday after a 19-16 vote, with Republicans opposing the measure. The move sets the package up for a House floor vote later this week. House Democrats are aiming to have the package ready for the president’s signature before current supplemental unemployment benefits expire on March 14.
Federal Reserve Chairman Jerome Powell is due to address the Senate Banking, Housing and Urban Affairs Committee at 10 a.m. ET.
Bonds, Copper Flat; Oil At 13-Month High
Among other U.S. markets, bonds flattened, with the 10-year yield at 1.36%, up sharply from lows around 0.50% in August. Yields had started 2020 at around 1.8%, down from about 2.7% a year earlier.
Oil prices rose, with West Texas Intermediate crude up 0.5% to above $62 a barrel, and at its highest level since Jan. 8, 2020. Europe’s Brent crude benchmark rose to near $66. Copper also paused its rally, with futures trading flat near $4.15 a pound, the highest mark since July 2011.
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Bitcoin Dips Below $46,000
Bitcoin recovered some early losses Tuesday, after sinking below $46,000 to touch its lowest level since Feb. 11, according to CoinDesk. Bitcoin had climbed to a record high above $58,000 on Sunday.
Among Bitcoin-related stocks, Marathon Patent Group (MARA) tanked 15%, while MicroStrategy (MSTR) traded down 7.4%. The Amplify Transformational Data Sharing ETF (BLOK) slumped 10.5%.
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IBD Leaderboard stock PayPal Holdings (PYPL) dropped 6.5%. PayPal stock has felt some influence from Bitcoin price swings since October, when the company launched a cryptocurrency trading service that deals in Bitcoin. The loss points PayPal stock toward a drop below its 21-day moving average, and a possible test of support at its 10-week line.
Coronavirus Update: 41-Day Decline Ends
As the cumulative death toll from the coronavirus pandemic in the U.S. climbed above 500,000 on Monday, the seven-day average for new Covid-19 cases reported daily in the U.S. and worldwide ticked higher for the first time in 41 days. New cases reported worldwide, averaged across the prior seven days, increased to 360,341 on Monday. That is more than 50% below the high of 745,985, recorded on Jan. 11.
In the U.S., the seven-day average for new reported cases rose on Monday to 69,528, still down more than 72% from the peak of 255,258 reached on Jan. 11, according to Worldometer.
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Deaths also ticked higher for a second day. The seven-day average for deaths reported daily rose to 2,042 on Monday. The daily average for deaths reported had fallen for 25 days after hitting a high of 3,447 on Jan. 26.
The Centers for Disease Control and Prevention reports that 75.2 million doses of vaccine have so far been distributed in the U.S. Some 64.177 million doses have been administered, meaning just under 20% of the U.S. population has so far received at least one shot.
Among related stocks, Co-Diagnostics (CODX) and Moderna (MRNA) were taking early hits, down 4.1% and 1.5%, respectively. No clear news was driving the moves.
Dow Jones Today: Salesforce Earnings
IBD Long-Term Leader Salesforce.com (CRM) will be the last regular-season earnings report among Dow Jones stocks. It’s due to report its fourth-quarter earnings after the close on Thursday. Salesforce shares fell 2% in early trade on the Dow Jones today.
Salesforce stock is climbing the right side of a cup base that formed after a failed November breakout from a double-bottom base. MarketSmith puts the buy point at 271.02, and Salesforce shares were about 10% below that mark at the end of trade on Friday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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