The Dow Jones Industrial Average briefly gained more than 450 points on surging oil prices early Wednesday. The coronavirus stock market rally looked to rebound from Tuesday's sell-off. Dow Jones stock Apple displayed a new buy point.
XDow Jones leaders Apple (AAPL) and Microsoft (MSFT) advanced around 2% each in today's stock market. FANG leader Netflix (NFLX) dropped almost 3% after its first-quarter earnings results. Chipotle (CMG) jumped 9% on strong earnings, while Snap (SNAP) surged 27%. Facebook (FB) advanced 5% on a disclosed stake in an India-based internet company. Tesla (TSLA) rallied 2%, despite an analyst downgrade.
Dow Jones Today: Oil Prices, Small Business Bill
The Nasdaq composite rallied 2.1% in morning trade Wednesday. At around 10:35 a.m. ET, the S&P 500 gained 1.8%, while the Dow Jones industrials moved up 1.6%.
Crude oil futures remained volatile, with oil prices reversing higher Wednesday morning after two straight days of price crashes. The June WTI oil futures contract surged 20% to $13.91 a barrel. Meanwhile, June Brent crude oil prices rallied 6% to $20.50 a barrel. Oil prices jumped after President Trump tweeted that he ordered the Navy to destroy Iranian ships that harass U.S. vessels.
Meanwhile, the U.S. Senate passed a $484 billion coronavirus bill for small businesses and hospitals on Tuesday. The bill heads to the House, which expects to approve it by Thursday. The legislation adds $310 billion into the Paycheck Protection Program. The program, which aimed to aid small businesses suffering from the coronavirus outbreak, ran out of money last week.
Among exchange traded funds, Innovator IBD 50 (FFTY) gained 2.2% Wednesday morning. The ETF of top growth stocks is about 24% off its 52-week high. Meanwhile, the Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) moved up 2.2%, and the SPDR S&P 500 (SPY) ETF gained 1.8%.
Within the current stock market rally, the tech-heavy Nasdaq is down 7.9% year to date through Tuesday's close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 15.3% and 19.3%, respectively, through April 21.
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Coronavirus News: U.S. Covid-19 Cases Top 800,000
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases rose above 819,000. Despite the rising total, the daily number of new cases continues to decelerate with about 26,000 new cases on Tuesday. Peak daily new cases occurred on April 4 with more than 34,000 cases, alongside a peak in testing on that same day.
Confirmed Covid-19 cases worldwide climbed above 2.5 million, with more than 179,000 virus-related deaths. With the daily number of new cases slowing, investors are turning attention to the economic impact of the coronavirus outbreak.
Coronavirus Stock Market Rally
According to IBD's The Big Picture, the stock market continues to rally after hitting lows on March 23. The major stock indexes confirmed a new uptrend on April 6. According to Wednesday's The Big Picture, "Since that follow-through day, the Nasdaq has rallied as much as 9.7% through Monday's peak. After this hefty run, any index deserves a break."
Stocks to watch include the top stocks on the IBD Long-Term Leaders watchlist. IBD Long-Term Leaders focuses on companies with stable earnings growth and price performance.
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Chipotle Earnings
Chipotle stock jumped 9% after the company's stronger-than-expected Q1 results late Tuesday. The company said it had more than $900 million on hand to keep it afloat for "well over a year" as the coronavirus outbreak continues to shut down the restaurant industry.
Shares of the burrito maker are climbing up the right side of a deep cup base. For now, the current buy point is 940.38, but a potential handle would offer a more risk-optimal buy point.
Netflix Earnings
Netflix reported mixed earnings results late Tuesday. Earnings missed analyst targets, while revenues topped. Notably, the company added nearly 16 million new subscribers in the first quarter, easily outpacing company and analyst estimates.
Netflix stock fell almost 3% Wednesday morning, and is about 11% above a cup-with-handle's 383.11 buy point after a breakout on April 13, according to MarketSmith chart analysis. Netflix is an IBD Leaderboard stock. According to Leaderboard commentary, "the stock has emerged as a coronavirus play in the age of social distancing and may end up being a true market leader."
According to the IBD Stock Checkup, Netflix stock boasts a best-possible 99 IBD Composite Rating, placing it in the top echelon of growth stocks. The Composite Rating is designed to help investors gauge the quality of a stock's fundamental and technical metrics.
Snap Earnings
Snap surged 25% after the company reported strong earnings results late Tuesday. The company also withdrew its Q2 guidance due to the coronavirus outbreak. Daily active users jumped 20% to 229 million, beating Wall Street estimates of 225 million.
Snap stock is moving up the right side of a deep base, as the stock looks to retake its long-term 200-day line for the first time since Feb. 26.
Stock Market News: Facebook, Tesla
In stock market news, Facebook stock jumped 5% after the company disclosed a $57 billion investment in Indian internet services company Jio Platforms.
Facebook shares found resistance at their 50-day line this week amid the recent stock market sell-off. Shares are testing that level again early Wednesday.
Tesla stock rallied more than 2% despite a Bank of America downgrade ahead of the stock market open. The analyst downgraded the electric-auto maker from neutral to underperform, lowering the price target from 500 to 485.
Tesla shares may be adding a handle to a deep cup base after sharp losses this week. For now, the proper buy point is 969.09, but the potential handle entry would be 775.05.
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Dow Jones Stocks: Apple, Microsoft
Among the Dow Jones stocks, Apple stock gained about 2% early Wednesday, as it approaches a new buy point in a cup with handle. The new entry is 288.35. But shares are below their 50-day line after Tuesday's 3.1% decline.
Apple shares are about 5% away from the new buy point.
Meanwhile, Microsoft looked to snap a two-day losing streak with a 2% rise Wednesday morning. Shares are about 2% below a 175.10 buy point in a double bottom, according to MarketSmith chart analysis, after last week's breakout.
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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