Dow Jones Today, Techs Dominate As Biden Edges Toward 270: Microsoft Upgraded, Apple's Chip Drought - Investor's Business Daily

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Stock futures narrowed early gains only slightly ahead of Thursday open, as resolution of the U.S. presidential race remained elusive. Tech stocks continued to drive the market's advance, unaffected by disappointing weekly jobless claims data and ahead of an afternoon policy announcement from the Fed. Qualcomm and MercadoLibre rallied hard on earnings. And Apple and Salesforce drove the early gains on the Dow Jones today.

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Nasdaq 100 futures rallied 2.2%. Dow Jones futures climbed 1.1% above fair value, with about half of the index rising more than 1%. S&P 500 futures jumped 1.5%. Small caps continued to lag the overall market, with Russell 2000 futures rising 1%.

Chipset maker Qualcomm (QCOM) spiked nearly 14%, leading the Nasdaq and S&P 500, as multiple analysts hustled to raise the stock's price target after a strong third-quarter report and bullish guidance late Wednesday. Shares ended Wednesday in a buy range, but were set to open well beyond that buy range — if premarket gains hold up — on Thursday.

MercadoLibre (MELI) ran 6.7% higher as Barclays raised the stock's price target after the company reported a second-straight quarter of triple-digit earnings gains and an 85% jump in third-quarter revenue late Wednesday. Active users of the Argentina-based online marketplace rose 92%, to more than 75 million. The stock ended Wednesday in a buy range above a 1,269.10 buy point.

A heavy morning of earnings activity drove strong early gains from Hologic (HOLX), Wesco (WCC), Linde (LIN) and others. General Motors (GM) rallied 5%, after reporting a big third-quarter earnings beat and steady month-over-month increases in automobile demand.

Cooler maker Yeti (YETI) headed for a buy point after reporting third-quarter sales and earnings far above consensus views.

Gear up for Thursday's market action by reading IBD's Investing Action Plan.

Dow Jones Today: Apple, Microsoft, Salesforce Lead

Microsoft (MSFT), Apple (AAPL) and Salesforce.com (CRM) all rallied nearly 3% in premarket action on the Dow Jones today.

Oppenheimer upgraded Microsoft stock to outperform, from perform, and slapped on a 2,650 price target. The note said improved relations with China under a Biden presidency would be a positive for the software giant. And an outlook for continued low interest rates boosts the appeal of the company's 3% rate of free cash flow.

Apple rose 2.5%, despite news reports saying the manufacturer was under pressure from a lack of power chips for its iPhones, and was cannibalizing iPad components to prop up output of its iPhone 12 model.

Salesforce.com climbed 2.8%, after announcing it would report its third-quarter results on Dec. 1.

Jobless Claims Steady, Fed Policy Pending

First-time unemployment claims came in at 751,000 for the week ended Oct. 31, the Labor Department reported. That was equal to the department's initial estimate for the prior week, but above the 745,000 claims projected by economists. The department revised its prior week estimate upward, to 758,000, on Thursday.

First-time claims for October fell below the 800,000 level for the first time in seven months.

In addition, markets will have their eye on this afternoon's Federal Reserve policy announcement, as the Federal Open Market Committee wraps up its two-day meeting. No change in target interest rates is expected, but outlooks and stimulus strategy could see some adjustments. The policy announcement is set for 2 p.m., to be followed by a press conference with Fed chief Jerome Powell at 2:30 p.m.

Trump's Path To 270 Narrows, But Still Too Close To Call

As counting continued of early and mail-in votes on Wednesday, Democratic candidate Joe Biden pulled ahead of President Donald Trump in Michigan, which appeared to leave the Republican with no clear path to an Electoral College victory. However, vote tallies have narrowed the gap in Arizona, making the state — and the race for the White House — too close to call.

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Joe Biden Win Looks Less Certain

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In the Senate, Republicans appear set to retain their majority, with at least 50 seats. That makes a divided government the most likely election outcome, a forecast that points to a strong positive for the stock market.

IBD 50 Stocks: ServiceNow, Lam Research Near Buy Points

On the IBD 50 list, Innovative Industrial Properties (IIPR) bolted 6.1% higher after reporting above-forecast third-quarter results late Wednesday. The owner/manager of medical cannabis growing facilities soared 14.5% for the week through Wednesday, but it's not near a buy point.

IBD 50 names ServiceNow (NOW) and Lam Research (LRCX) each rose more than 1%. ServiceNow ended Wednesday in a buy range on a rebound from 10-week support. Lam Research was less than 1% below a 382.06 buy point in a cup-with-handle base.

Coronavirus Update: New Cases Hit Record Levels

While the U.S. wrung its hands over the outcome of Tuesday's presidential election, states reported more than 107,000 new coronavirus cases on Wednesday — the highest single-day number on record. The seven-day average for new cases is now above 92,700, a 49% increase over the past two weeks and up 159% from a mid-September low, based on data from Worldometer.

Deaths in the U.S. have trended higher since mid-October. The seven-day average of daily deaths in the U.S. rose from 706 on Oct. 17 to 894 on Wednesday, an increase of around 27%. Average daily deaths have now rebounded to their highest level since early September.

Europe is enacting broad lockdown measures as a second wave of infections has slammed the region. The seven-day average for new cases in the U.K. rose from around 1,300 at the end of August to more than 22,300 on Wednesday. Average deaths during that same period have increased from around 10 to 295. In France , new cases topped 44,000 and deaths rose to more than 400. Spain held its death count to below 200, while new cases soared above 22,000.

Spain's death rate, however, remains among the highest in the world, at 815 deaths per million people, according to data from the European Centre for Disease Prevention and Control. The U.S. and the U.K. are roughly tied, with death rates just above 700 per million people. Brazil's death rate is 757. France's is 592. Germany is seeing 130 deaths per million people.

Dow Jones Today: UnitedHealth, Salesforce, Apple

The stock market's rally attempt panned out, marking one of the quickest market turnabouts on record. The Dow Jones today is sitting on a 5.1% gain so far this week ahead of the starting bell, while the S&P 500 is up 5.3% and the Nasdaq has a 6.2% gain. Small caps have lagged slightly, with the Russell 2000 rising almost 5% through Wednesday's close.

So, in a correction so quick that it left little time for watchlists, how have the Dow Jones stocks performed?

UnitedHealth (UNH) has been the Dow's prime mover, up more than 16% and scoring a breakout as it retook a prior buy point. The likelihood of a more evenly divided House and Senate make partisan projects like healthcare reform more challenging. That, for managed care providers, translates into business as usual. Markets like predictability.

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Did America — And Wall Street — Just Vote For Gridlock?

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Apple climbed 5.6% in three days, a move which leaves it still below its 50-day moving average, where it has hung out since Oct. 22.

Salesforce is up almost 8% and appears set for an attempt to push above its 50-day. Honeywell (HON) rallied 8.5% in an earnings-fueled four-day run-up through Tuesday. The stock closed Wednesday less than 3% below what IBD MarketSmith chart analysis pinpoints as a 184.16 buy point in a long, deep base.

Dow Jones Today: Keeping Up A Defense

Microsoft vaulted 6.9% in the three days through Wednesday, and Nike has a 6% gain. Nike is technically in a buy zone on a rebound from 10-week support, but weak volume thus far has made the follow-on buy a risky bet. Microsoft stock retook support at its 50-day line on Wednesday, but remains about 8% below a 232.96 buy point.  Nike and Microsoft are IBD Leaderboard stocks.

Procter & Gamble (PG) has only gained slightly more than 2%, but is angling to retake a 141.80 buy point.

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For more detailed analysis of the current stock market and its status, study the Big Picture.

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On the downside, Caterpillar (CAT) is the only Dow issue showing a loss for the week, after Wednesday's 7.4% crash erased most of a four-day advance. Investors unwinding infrastructure spending bets on what many had expected to be a Democrat-controlled Senate appeared to cause a large share of the decline.

Overall, the market action this week has looked positive. Both the S&P 500 and the Nasdaq are back above their 50-day lines. But the Dow has yet to retake that level of support. All three indexes remain well below their early September highs, and the Dow is still more than 2% in the hole for the year.

Investors going after leading stocks breaking out past buy points should remain on their guard. A headline-driven market, a still-undecided presidential election and a very active viral pandemic make for a potentially volatile combination.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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