The Dow Jones Industrial Average briefly rallied 150 points Wednesday, as Fed chief Powell reassured investors that the Federal Reserve’s easy monetary policies will continue. Apple stock jumped on iPhone news. And Tesla looked to add to Tuesday’s sharp losses.
Tesla (TSLA) looked to add to Tuesday’s 2.5% decline, falling nearly 1% Wednesday morning.
Among the top stocks to buy and watch, PayPal (PYPL), Roku (ROKU), Shopify (SHOP) and Square (SQ) are in or near new buy zones. Meanwhile, IBD 50 stock Global-E Online (GLOB) is trying to break out past a rare buy point.
Microsoft, PayPal and Shopify are IBD Leaderboard stocks. Roku is an IBD SwingTrader stock. PayPal and Square were featured in this week’s Stocks Near A Buy Zone column. Global-E Online was featured as Tuesday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Powell Comments
The Dow Jones Industrial Average rallied 0.2% Wednesday, while S&P 500 gained 0.4%. The tech-heavy Nasdaq climbed 0.6% in morning trade.
Prepared remarks from Fed Chairman Jerome Powell reassured investors that the Federal Reserve’s easy monetary policies will continue.
“At our June meeting, the committee discussed the economy’s progress toward our goals since we adopted our asset purchase guidance last December,” Powell said in comments prepared for testimony before the House Financial Services Committee, which begins at 12 p.m. ET. “While reaching the standard of ‘substantial further progress’ is still a ways off, participants expect that progress will continue.”
His latest comments come on the heels of a hotter-than-expected inflation report Tuesday that saw the consumer price index receive its largest increase in nearly 13 years. Data Wednesday showed producer prices running hotter than expected in June, with a record-setting 7.3% surge.
Stock Market Rally
The S&P 500 touched record highs Wednesday morning, while the Nasdaq is just shy of its own record highs. The Dow Jones industrials are trading just below the all-time high set in early May.
Tuesday’s Big Picture column noted, “Higher volume caused the Nasdaq to add a distribution day. At the same time, the June 15 distribution was erased because the composite climbed more than 5% from that day’s close. Volume also rose on the NYSE, which gave the S&P 500 a fourth distribution day.”
For more stock market commentary, check out IBD’s The Big Picture.
Dow Jones Stocks To Buy And Watch: McDonald’s
Dow Jones restaurant giant McDonald’s is trading above a 238.28 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares were up about 1% Wednesday.
Stocks To Buy And Watch: Global-E, PayPal, Roku, Shopify, Square
Tuesday’s IBD 50 Stocks To Watch pick, Global-E Online, is trading just below a 64.60 buy point in a rare high tight flag. Shares briefly topped the entry amid Tuesday’s 6.1% advance, but ended below the buy point. Shares moved up nearly 3% Wednesday morning.
IBD Leaderboard stock PayPal is in the 5% buy zone past a cup with handle’s 296.11 buy point following last week’s breakout. The 5% buy area goes up to 310.92. Shares rose 0.3% Wednesday and are squarely in buy range.
On June 17, the top payments processor broke out above a 277.96 entry in a cup base and is comfortably above that level. Leaderboard noted the stock’s rising relative strength line is a positive attribute even though it remains off its 2021 high.
According to the IBD Stock Checkup, PayPal stock shows a solid 96 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating identifies stocks with a blend of strong fundamental and technical characteristics.
Square added a handle to a cup base, moving the buy point from 278.23 to 254.88. The stock advanced 0.9% Wednesday.
Roku is trading about 7% away from a cup with handle’s 463.09 buy point. Shares rose 0.9% Wednesday. Roku is an IBD SwingTrader stock.
Shopify is still below a 1,552.33 buy point in a cup with handle, according to IBD MarketSmith chart analysis. Shares edged 0.2% lower Wednesday following Tuesday’s 1.5% gain. Shopify is about 3% away from the buy point after last week’s brief breakout attempt.
Stock Market Earnings: Bank Of America, Citigroup, Wells Fargo
Banking giants Bank of America, Citigroup and Wells Fargo all reported earnings ahead of market open Wednesday.
Bank of America reported mixed Q2 results, sparking a 2% sell-off in morning trade. Shares dropped further below their key 50-day line. A flat base with a 43.59 buy point continues to take shape.
Citigroup topped earnings and sales estimates, as the stock rallied 2%. Shares are about 14% off their 52-week high.
Wells Fargo moved up almost 1% after beating the Street’s estimates. A new flat base offers a 48.23 entry.
Tesla stock reversed from early gains to fall almost 1% Wednesday, on pace to add to Tuesday’s 2.5% sell-off. The electric-vehicle giant looked to continue its rebound from key support at its key 50- and 200-day moving averages. Another strong show of support at these levels would be bullish for the stock’s prospects.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple jumped 2% Wednesday after a Bloomberg report said Apple seeks to increase new iPhone production up to 20% for 2021. Apple “has maintained a consistent level in recent years of roughly 75 million units for the initial run from a device’s launch through the end of the year. The upgraded forecast for 2021 would suggest the company anticipates its first iPhone launch since the rollout of Covid-19 vaccines will unlock additional demand.”
Apple stock hit an all-time high and is extended past the 5% buy zone from a 137.17 entry in a cup base, according to IBD MarketSmith chart analysis.
Microsoft continues to trade solidly above a cup base’s 263.29 buy point. Shares rose 0.5% Wednesday and are extended. The 5% buy zone goes up to 276.45.
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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