The Dow Jones Industrial Average started the third quarter in stocks today on a mildly negative note. Amid losses of 1 point or more by at least nine of its 30 components, the Dow industrials finished the session down 0.3%.
XThe Dow, finishing Wednesday at 25,734, remains down nearly 10% since Jan. 1. Boeing (BA), Home Depot (HD), IBM (IBM) and Chevron (CVX) paced the downside among Dow Jones stocks with losses of 1.5 points or more. Only HD shows a solid Relative Strength Rating of 80 or higher among the blue-chip quartet. It is trading near a 248.42 buy point in a 13-week cup with handle.
The blue-chip index lagged the Nasdaq composite's almost-1% gain by a country mile; the S&P 500 rose 0.5%. The iShares Russell 2000 (IWM) exchange traded fund slipped nearly 1%, halting a two-day win streak.
Volume grew on both main exchanges, early data showed.
Gains by movie, automaker, business software, internet retail, travel booking and electric utility stocks led the market upside. Please go to IBD Data Tables to see the full daily price-weighted performance of all 197 industries tracked by Investors.com.
Since April 2, IBD has determined that the market has been in a confirmed uptrend. A solid Day 8 follow-through day by the S&P 500 on that session spurred a change in the current outlook for stocks from "Market in correction" to "Market in confirmed uptrend," the best time to actively build a good watchlist of top-rated growth stocks and buy shares on a powerful breakout.
Please see this Tuesday IBD Big Picture for more details on what to do and what not to do as the second half of 2020 gets under way.
ISM Data: New Manufacturing Expansion
Meanwhile, a solid ISM manufacturing index report of 52.6 for June eclipsed the Econoday consensus view of 49.0 and rebounded sharply from 43.1 the prior month. A figure over 50 denotes expanding factory activity.
This news on Wednesday clearly overshadowed — at least on Wall Street — a dire prediction by Anthony Fauci, head of infectious disease for the federal government, that Covid-19 confirmed cases in the U.S. could top 100,000 daily.
Interestingly, breadth was slightly negative despite the Nasdaq's solid gain.
Falling stocks exceeded rising ones by a narrow 6-5 margin on the Nasdaq, even as the Nasdaq 100 rallied 1.2%. But on the NYSE, winners beat losers by more than 200 issues, or a roughly 10-9 ratio.
The NYSE composite edged fractionally higher.
Innovator IBD 50 (FFTY), which finished the first six months of the year down less than 1%, sneaked into positive territory for 2020. The growth stock-focused ETF rose more than 1.1%, building upon Tuesday's 2.1% advance.
FFTY, which does not exactly mirror the overall price-weighted performance of the IBD 50, rallied 25.7% in 2019.
Through Wednesday's trade, the IBD 50 is now up 15.9% since Jan. 1, smacking a 3.6% loss for the S&P 500, excluding dividends.
Beyond Dow Jones: Will Diabetes Stocks Rule In Q3?
Within the IBD 50, Dexcom (DXCM) continued to work on a chart pattern that increases the possibility of a new breakout. (Please see this new IBD 50 Stocks To Watch piece on the innovator of highly convenient and cutting-edge CGM (continuous glucose monitoring) devices.)
On IBD Live, Alteryx (AYX) garnered a lot of attention. Shares in the data analytics platform surged more than 6% in above-average turnover.
Watch for the stock's Accumulation/Distribution Rating, currently a B-, to potentially improve. The stock is now well extended past a 151.60 entry point in a large cup with handle.
According to IBD Stock Checkup, Alteryx gets a respectable 91 Composite Rating on a scale of 1 (slimy) to 99 (scintillating).
The IBD Composite Rating places important fundamental, technical and fund sponsorship criteria into an easy-to-use single metric. In general, amid the early stages of a confirmed market uptrend, focus your watchlist on companies that show a 90 Composite score or higher.
Daqo New Energy (DQ) also commanded discussion in the Wednesday IBD Live show.
Shares in the expert in silicon wafer production for the solar energy industry powered more than 18% and hit a new all-time high of 89.46. Daqo has now gained more than 10% since clearing an 81.56 buy point in a large, deep cup without handle.
Covid-19 Play
On the downside, Moderna (MRNA) is testing a critical level as shares fell more than 4%.
Volume initially ran as much as 66% above its 50-day moving average but slowed by day's end. Nearly 18 million shares exchanged hands, 21% below usual levels.
As seen on a daily chart, the RNA messenger mechanism tech-based biotech is trying to find institutional buying support at the critical 50-day moving average. IBD and MarketSmith charts show the 50-day line in red.
However, a strong rebound off the 50-day line, or the 10-week moving average on a weekly chart, could deliver a new follow-on buy point. Indeed, Moderna has exuded strength since it cleared a 36.10 buy point in an odd-shaped, six-week, cuplike base on April 15.
Moderna has received a significant pledge of funding from the U.S. government in its mission to create a working Covid-19 vaccine. However, some observers question whether the company will have full ownership of the technology that it will develop. For more on this issue, please read this IBD tech story.
While Wall Street sees the Cambridge, Mass., company losing $1.46 a share in 2020, analysts polled by FactSet also see it logging earnings of 94 cents a share in 2021.
Moderna has a market value of $23.8 billion, squarely in large-cap land. It has 387.7 million shares outstanding and a float of 271.4 million.
Please see the IBD BigCap 20 for ideas on large-cap growth stocks that have the potential to crush the S&P 500.
Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, buy points, breakouts, sell rules and market insight.
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