Tech stocks led the market to heavy losses early on Tuesday, ahead of Fed Chief Jerome Powell’s Senate testimony. The $ 1.9 trillion federal stimulus package advanced through the House Monday night, helping to lift oil prices and some pandemic reopening work. The earnings news ignited ZoomInfo and sent Nexstar Media into a buy range. Meanwhile, Home Depot fell on the Dow Jones today, following its fourth-quarter report.
The Nasdaq Composite fell 3.5% on the opening bell as Baidu (BIDU) and Tesla (TSLA) fell more than 11% each in the opening bell. The S&P 500 opened with a loss of 1.4%. Dow industrialists lost more than 200 points, down 0.7%. Procter & Gamble (PG) outperformed the Dow Jones today, up nearly 3%.
Etsy (ETSY), Tesla and Enphase Energy (ENPH) traded lowest among S&P 500 stocks. CBRE Group (CBRE) and Additional storage (EXR) led, with an increase of more than 5% each in earnings news.
Earnings News: ZoomInfo Spikes, Nexstar Explodes
In earnings news, Nexstar Media Group (NXST) and IBD Rating Actions ZoomInfo (ZI) rose after reporting the results Monday night.
ZoomInfo rallied more than 10% after topping analysts’ fourth-quarter earnings and earnings views on Monday night. At least four analysts raised share price targets early Tuesday. Piper Sandler topped the list with a price target of 70. ZoomInfo’s stock has been volatile, reversing an 11% advance from a February 3 breakout and diving back below the 53.18 buy point, in addition to cut support at its 21-day exponential moving average on Monday.
Technically, the pullback triggered a sell rule, but it failed to trigger the automatic stop-loss rule. Tuesday’s pre-trade action points to the stock recovering the buy point in early trading, a valid buying opportunity. But investors should make sure to take into account the changing state of the uptrend, especially before diving into volatile young stocks with recent initial public offerings.
Texas-based television broadcaster Nexstar Media Group was up 4.6% after its healthy fourth-quarter report. The move sent the stock into a buying range above a buy point of 131.10 on a 12-week ascending basis. The buy range goes up to 137.66.
Dow Jones Today: Home Depot breaks support
House deposit (HD) tumbled 5% on the Dow Jones today, despite posting strong gains and fourth-quarter gains on Monday night. The company also increased its quarterly dividend by 10%, to $ 1.65 per share.
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The slide sent Home Depot shares soaring below its 10-week moving average. The stock has been swinging above and below the line since August, forming a 26-week flat base in the process. The base has a buy point of 293.05. Shares closed 6% below that entry on Monday.
Stimulus set for voting on the floor of the house
In Washington, the House Budget Committee approved President Joe Biden’s $ 1.9 billion American Bailout Plan on Monday after a 19-16 vote, and Republicans opposed the measure. The measure prepares the package for a House vote later this week. House Democrats aim to have the package ready for the president’s signature before current supplemental unemployment benefits expire on March 14.
Federal Reserve Chairman Jerome Powell will address the Senate Committee on Banking, Housing and Urban Affairs at 10 am ET.
Bonds, Flat Copper; Oil in maximum of 13 months
Among other US markets, bonds leveled off, with the 10-year yield at 1.36%, a sharp rise from lows of around 0.50% in August. Yields had started 2020 at around 1.8%, down from 2.7% a year earlier.
Oil prices rose, with West Texas Intermediate crude rising 0.5% above $ 62 a barrel, and at its highest level since January 8, 2020. Europe’s benchmark Brent crude index it went up to about $ 66. Copper also halted its rally, with futures trading flat near $ 4.15 a pound, the highest mark since July 2011.
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Bitcoin falls below $ 46,000
Bitcoin recovered some early losses on Tuesday, after sinking below $ 46,000 to touch its lowest level since Feb.11, according to CoinDesk. Bitcoin had risen to a record above $ 58,000 on Sunday.
Among the actions related to Bitcoin, Marathon Patent Group (MARA) sank 15%, while MicroStrategy (MSTR) was trading down 7.4%. Amplify Transformational Data Sharing ETF (BLOK) plunged 10.5%.
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IBD Classification Actions PayPal Stock (PYPL) fell 6.5%. PayPal shares have felt some influence from Bitcoin price swings since October, when the company launched a cryptocurrency trading service that trades Bitcoin. The loss points PayPal shares 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 number of deaths from the coronavirus pandemic in the US surpassed 500,000 on Monday, the seven-day average for new Covid-19 cases reported daily in the US and throughout the world increased for the first time in 41 days. New cases reported worldwide, averaged over the previous seven days, rose to 360,341 on Monday. That’s more than 50% below the high of 745,985, recorded on January 11.
In the U.S., the seven-day average for new reported cases rose Monday to 69,528, still more than 72% from the peak of 255,258 reached on January 11, according to Worldometer.
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Deaths also increased for the second day. The seven-day average of deaths reported daily rose to 2,042 on Monday. The daily average of reported deaths had fallen for 25 days after peaking at 3,447 on January 26.
The Centers for Disease Control and Prevention reports that 75.2 million doses of vaccine have been distributed so far in the U.S. About 64.177 million doses have been administered, meaning that just under 20% of the US population has received at least one injection so far.
Among the related actions, Co-diagnosis (CODX) and Modern (MRNA) were taking early hits, down 4.1% and 1.5%, respectively. No clear news was prompting the movements.
Dow Jones Today: Salesforce Earnings
Long-term leader in IBD Salesforce.com (CRM) will be the last regular season earnings report among Dow Jones stocks. You must report your fourth quarter earnings after Thursday close. Shares of Salesforce fell 2% in early trading on the Dow Jones today.
Shares in Salesforce are climbing on the right side of a cup base that formed after a failed breakout in November 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 the trade on Friday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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