Stocks opened higher Wednesday, ahead of another round of commentary from Fed chief Jerome Powell. JPMorgan and Goldman Sachs led the big banks firing first shots of the March-quarter earnings season. Bitcoin hammered out new highs ahead of the Coinbase Global initial public offering. And Boeing jumped high on the Dow Jones Industrial Average, after an analyst raised the stock’s price target.
X
The Dow Jones indutrials kicked out a quick 100-point gian, rising 0.3% as Goldman SachsGS rallied 2.9% on earnings. The S&P 500 traded effectively flat on the stock market today.
The Nasdaq Composite gained some stength, rising 0.2%, as NetEase[tickersymb=NTES] and Baidu (BIDU) traded at the top of the index, while Kraft Heinz (KHC), Facebook (FB) and Netflix (NFLX) lost ground.
Mining stocks rallied, as Freeport-McMoRan (FCX) led the S&P 500, bolting 7% higher. The move sent shares near a 37.71 buy point in a double-bottom base. On the IBD 50 list, steelmaker and ore miner Cleveland Cliffs (CLF) rallied 4.9%, moving to retake an 18.87 buy point.
Energy stocks also traded strong as oil prices rose on economic optimism. Oil-related names were six of 10 among the largest early gains on the S&P 500. Miners also showed strength.
IBD 50 stock Lovesac (LOVE) reversed its premarket rally and dived more than 4%, despite scoring a solid fiscal fourth-quarter beat. Bed, Bath & Beyond (BBBY) tumbled 13% after its fourth-quarter report, as revenue came in just below analyst targets. Wells Fargo (WFC) slipped 0.7%, after reporting a first-quarter revenue and earnings beat.
Federal Reserve Chairman Powell is scheduled to deliver a virtual speech to the Economic Club of Washington beginning at 12 p.m. ET.
Dow Jones Stocks: Goldman In Buy Range
Among Dow Jones stocks, Goldman Sachs (GS) rallied 3%, and Boeing (BA) nothced a 1.3% in early trade. Goldman’s first-quarter results, which showed revenue more than doubling and earnings up 498%.
Goldman stock had pulled back Tuesday to reconfirm a test of support at its 10-week moving average. If premarket gains hold up through the open — which they often don’t — it would place shares in a buy range through about 355.
Boeing jumped after JPMorgan raised the stock’s price target to 260, from 230. The report kept the stock’s rating unchanged, at neutral.
Apple (AAPL) shed its premarket gain and drop[ped 0.4%. Evercore ISI added the stock to its Tactical Outperform list, maintaining its outperform rating and 175 price target. The note projected iPhone and services revenue would drive first-quarter results significantly above analyst estimates. Further, current-quarter guidance would be at or above Wall Street’s expectations. Shares are climbing the right side of a 12-week base. Apple reports April 28.
JPMorgan (JPM) shares dipped 1.2%, despite reporting a jump of nearly 500% in its first-quarter earnings. The bank booked as profit $5.2 billion it had previously set aside as a buffer against loan defaults.
Johnson & Johnson (JNJ) continued to drag, down 0.5% early Wednesday. The Food and Drug Administration and Centers for Disease Control on Tuesday halted new doses of the company’s Covid-19 vaccine in order to study some potential risk factors.
Leaders Near Buy Points: Square, Snap
Among stocks near buy points, IBD 50 stock Snap (SNAP) jumped 3.3% in early trade. The social media imaging innovator has recovered nicely above its 50-day moving average, below a 73.69 buy point in a cup base. But the consolidation offers an alternate, early entry at 65.23, less than 2% above where shares traded at Wednesay’s open.
Bitcoin Rallies Ahead Of Coinbase IPO
Bitcoin pounded out more new highs, up more than 1% early Wednesday and briefly trading above $64,800. The cryptocurrency gained more than 17% over the past week, according to CoinDesk.
Cryptocurrencies attracted attention over the past week in anticipation of today’s initial offering of cryptocurrency exchange Coinbase Global. Coinbase will trade under the ticker “COIN.”
CAN SLIM rules advise against jumping into IPOs too early, amid all the initial offering speculation and excitement. It is better to sit and watch the new stock’s chart. Waiting for it to form and breakout from an IPO base helps limit downside risk.
Vital Signs: Oil, Bond Yields
Oil prices rose, with West Texas Intermediate futures topping $61 a barrel early Wednesday. Prices have bobbed within the trading range established in mid-March, below an early-March high at $65.05.
Stock Market ETF Strategy And How To Invest In The Current Uptrend
Bond yields held firm after taking a sharp dive on Tuesday. CBOE data showed the 10-year yield closing at 1.63% on Tuesday, after its largest single-day drop since February. Yields skirted pre-pandemic levels early this month, climbing above 1.76% — the highest level since January 2020. Yields had started 2020 at around 1.8%, down from about 2.7% a year earlier, then dipped in August to record lows around 0.5%.
Small Caps: Russell 2000 +12.9%
Small caps traded ahead of the general market on Tuesday, with the Russell 2000 rising 1%. The iShares Russell 2000 ETFIWM rallied 1.8%.
Database software provider MicroStrategy (MSTR), also an aggressive Bitcoin investor, jumped 4.9% ahead of the Coinbase IPO. MicroStrategy had a 19.3% gain for the week through Tuesday.
The Russell 2000 has lagged the general market significantly this month, up only 0.4% for the month through Tuesday. The index is pulled back in a test of support at its converged 50-day line and 21-day exponential moving average, trading not quite 6% below its record high set in mid-March.
However, small caps are still the market leaders so far this year, with the Russell 2000 showing a 12.9% advance since Dec. 31.
Dow Jones +10%, Nasdaq +7.9%
The Dow and the S&P 500 are each working on their third-straight monthly advance. The Dow is up 2.1% so far in April — on top of a 6.6% blowout rally in March — and has gained 10% since Dec. 31. The S&P 500 has a 4.3% gain in April and is up 10.3% year-to-date.
Meanwhile, the Nasdaq is working on its sixth-straight monthly advance. The gains, however, were incremental — sticking close to 1%. April appears to be breaking that gridlock, with the index so far up 5.7% for the month.
Despite the string of monthly advances, the Nasdaq continues to play catch-up for the year, closing with a year-to-date gain of 7.9% on Tuesday. In addition, the S&P 500 knocked out another new record high on Tuesday. The Dow is trading just off its fresh high notched on Friday.
The Nasdaq remains a bit more than 1% below its record peak from Feb. 16, proving to be just one piece of a market with which it has been difficult to get in synch. But the last three trading sessions hinted at a change in character.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The Big Picture noted on Tuesday that three sessions of late-day rallies, combined with the extinguishing of distribution days “expanded a bullish picture” that is emerging. The picture is challenging, in the midst of much choppy sector rotation.
But database software, cybersecurity and enterprise software industry groups showed clear signs of strength on Tuesday. The database software group has made the strongest move over the past five sessions among the 197 industry groups tracked by IBD, up 10%.
The Invesco QQQ Trust ETF (QQQ) topped a 338.29 buy point on Tuesday and remains in a buy range through 355.20. The leveraged ProShares UltraPro QQQ (TQQQ) is 1% below a similar entry at 111.61.
Find Alan R. Elliott on Twitter @IBD_Aelliott
YOU MAY ALSO LIKE:
Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader
Best Growth Stocks To Buy And Watch
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
