Dow Jones futures tumbled more than 300 points early Wednesday before cutting losses, along with S&P 500 futures and Nasdaq futures, after Tuesday's coronavirus stock market rally jumped on U.S.-China trade news. Warren Buffett-backed StoneCo and Netflix headline these six top stocks in or near buy zones.
XThe coronavirus stock market rally continued its record-setting ways Tuesday, as the Nasdaq composite hit another all-time high. The tech-driven Nasdaq has risen an incredible 19 of the last 22 trading sessions. Meanwhile, the Dow Jones Industrial Average gained 131 points.
Advanced Micro Devices (AMD), Netflix (NFLX), Warren Buffett-backed StoneCo (STNE), Taiwan Semiconductor (TSM), Vertex Pharmaceuticals (VRTX) and Wingstop (WING) are in or near new buy zones. Dow Jones stock leaders Apple (AAPL) and Microsoft (MSFT) advanced to record highs Tuesday.
Apple, Microsoft, Netflix and Vertex are IBD Leaderboard stocks.
Dow Jones Futures Today
The Dow Jones futures fell 1% vs. fair value ahead of the stock market open Wednesday, while S&P 500 futures dropped 0.8%. Nasdaq 100 futures were down 0.5% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
On Tuesday, the Nasdaq composite advanced 0.7%. The S&P 500 moved up 0.4%, while the Dow Jones industrials rallied 0.5%. The major stock indexes were boosted by China trade news and a tweet from President Trump.
Late Monday, White House trade official Peter Navarro told Fox News that the U.S.-China trade deal was "over." Navarro later told the media that his comment was not about the phase-one China trade deal, which remains in place. He said his statement was "wildly out of context" and that he was referring to a loss of "trust" with Beijing.
Then, President Donald Trump tweeted, "The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!"
Among exchange traded funds, Innovator IBD 50 (FFTY) turned unchanged Tuesday. The ETF of top growth stocks is about 7% off its 52-week high.
The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF moved up 0.85% to close at 248.84. Meanwhile, the SPDR S&P 500 ETF (SPY) moved up 0.5% to 312.05.
Within the coronavirus stock market rally, the tech-heavy Nasdaq hit more record highs and is up 12.9% for the year through Tuesday's close. Meanwhile, the S&P 500 and DJIA are down 3.1% and 8.4%, year to date, through the June 23 close.
Coronavirus News
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 2.4 million Tuesday. While daily new cases are rising over the short term, the rise in deaths continues to decline.
The cumulative total of Covid-19 cases confirmed since the start of the outbreak worldwide is approaching 9.3 million Tuesday, with more than 477,000 virus-related deaths.
Coronavirus Stock Market Rally
According to IBD's The Big Picture, the coronavirus stock market rally remains in an uptrend after rebounding from lows three months ago on March 23. The major stock indexes confirmed the rebound as a new uptrend on April 2.
Per Monday's The Big Picture, "The Nasdaq composite climbed 1.1% and closed above 10,000 for the second time this month. The previous time was June 10, right before the composite plunged 5.3% on coronavirus worries. At a close of 10,056 Monday, the Nasdaq is inches away from the record high of 10,086."
Stocks to watch include the top stocks on IBD Long-Term Leaders. The IBD Long-Term Leaders list focuses on companies with stable earnings growth and price performance.
Coronavirus Stock Market ETF Strategy And How To Invest In The New Uptrend
Stocks In Or Near Buy Zones
In the coronavirus stock market rally, six top stocks in or near buy zones include AMD, Netflix, StoneCo, Taiwan Semiconductor, Vertex Pharmaceuticals, and Wingstop.
AMD Stock
One of last week's IBD 50 Stocks To Watch picks, Advanced Micro Devices, is about 8% below a new buy point in a cup with handle at 59.10 after a June 10 breakout failed, according to MarketSmith chart analysis.
But the stock is still testing its 50-day moving average line, a key support level. Shares slid 1.4% Tuesday.
AMD stock ranks No. 7 in the IBD 50. (The IBD 50 is a list of leading growth stocks with strong relative price strength and top-notch fundamentals.)
Netflix Stock
FANG stock leader Netflix is in the 5% buy zone above a 459.07 buy point in a flat base after Monday's breakout. The 5% buy range goes up to 482.02. On Tuesday, shares fell 0.4%.
Netflix is an IBD Leaderboard member. According to Leaderboard commentary, "Netflix is in buy range after breaking out of a flat base in active trading. It was raised from half to 3/4 position on Wednesday and to a full position Monday."
Warren Buffett Backs StoneCo
Tuesday's IBD Stock Of The Day StoneCo broke out above a 40.27 buy point in a cup with handle amid a 4.7% advance. Shares are in the 5% buy zone that runs up to 42.28.
Warren Buffett is a noted backer. His firm Berkshire Hathaway (BRKB) holds 14.17 million shares, which accounts for 8% of all StoneCo stock.
TSMC Stock
Tuesday's IBD 50 Stocks To Watch pick, chip leader Taiwan Semiconductor — also known as TSMC — is within striking distance of a breakout above a new buy point at 58.14, according to MarketSmith chart analysis. Shares are about 2% below the new buy point amid Tuesday's 1.4% gain.
IBD Stock Checkup shows that TSMC stock has a 96 out of a highest-possible 99 IBD Composite Rating, making it one of the top-ranked stocks in the chipmaker industry. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths.
Vertex Stock
Vertex Pharmaceuticals broke out past a 295.65 buy point in a flat base, according to MarketSmith chart analysis. Shares ended Tuesday up 0.9% to close just above the buy point.
The top biotech stock was featured in Friday's IBD Sector Leaders column and is another IBD Leaderboard stock.
Wingstop Stock
Chicken-wing chain Wingstop is still in buy range past a 131.09 buy point in a consolidation after a strong breakout on Friday. Shares fell 0.3% Tuesday and are still in the 5% buy zone, which runs up to 137.64.
Wingstop was featured as Friday's IBD Stock Of The Day.
Top Growth Stocks To Buy And Watch
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple jumped as much as 3.8% Tuesday after multiple price-target hikes before paring gains to 2.1%. Shares hit all-time highs, topping out at 372.38 a share.
UBS boosted its price target from 325 to 400. Deutsche Bank raised it from 350 to 380. Baird upped its price target from 320 to 390.
Shares are well-extended past a handle's 319.79 buy point, which offered an add-on entry. The entry was an opportunity for investors to add to their positions. Meanwhile, shares are above the 20%-25% profit-taking zone from a cup-with-handle's 288.35 buy point.
Software leader Microsoft hit a record high Tuesday with a 0.7% advance. Shares are extended past a cup-with-handle's 187.61 buy point. The 5% buy range goes up to 197.
Bullishly, the stock's RS line is at new highs after a sharp rally in recent trading sessions. The RS line measures a stock's price performance vs. the broad market.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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