Dow Jones Rallies 300 Points To Lead Stock Market; Is A New Closing High Next?

Stocks were mixed near midday Monday as the Dow Jones Industrial Average rallied 300 points, on track for a new closing high, but the Nasdaq remained underwater.


The Dow Jones Industrial Average rallied 0.9%, the S&P 500 rose 0.4% and the Nasdaq composite dipped 0.3% in the stock market today. Small caps tracked by the Russell 2000 advanced 0.5%. Volume was mixed, higher on the NYSE but lower on the Nasdaq, vs. the same time Friday.

Though the Dow and Nasdaq wrapped up April with minor losses of 0.3% to 0.5%, they remain near all-time highs. The S&P 500 edged slightly higher last month to close at a new high.

In 2020, tech stocks boosted the Nasdaq to a 43.6% gain — its fifth best year ever. The S&P 500 rose 16.3% in 2020 and the Dow added 7.2%. After a strong start this year and a short correction, the market has rebounded near record highs. Read The Big Picture for more detailed daily market analysis.

The Covid-19 pandemic has roiled the U.S. economy, as nationwide lockdowns have passed the one-year mark. But many states are relaxing restrictions and cases are starting to plateau or decline in some states as vaccinations roll out.

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34191.04 +316.19 +0.93
S&P 500 (0S&P5) 4199.72 +18.55 +0.44
Nasdaq (0NDQC ) 13921.75 -40.93 -0.29
Russell 2000 (IWM) 225.96 +1.07 +0.48
IBD 50 (FFTY) 46.61 -0.01 -0.02

Cumulative Covid-19 cases worldwide are approaching 154 million, with more than 3 million deaths, according to Worldometer. In the U.S., cases have surpassed 33 million with over 591,000 deaths, although the number of new cases in the U.S. has slowed dramatically in many states.

Covid-19 Vaccine Update

As countries rush to vaccinate their populace, Pfizer (PFE) rose 2% and German partner BioNTech (BNTX) soared more than 7%, both in heavy trade. The stocks rallied amid reports that the companies were exploring with India’s government a way to establish an “expedited approval pathway” in the country for the their Covid-19 vaccine.

Pfizer and BioNTech, whose vaccine is one of three with emergency use approval in the U.S., have asked the FDA to authorize their vaccine for people age 12-15.

Pfizer stock is close to a 39.77 buy point of a cup with handle. The base is first stage, which means the stock could have plenty of runway ahead. Stocks tend to make their biggest moves out of such early-stage bases.

BioNTech stock, on track for a fourth straight advance, hit a new high. Shares are sharply extended from a 131.10 buy point of a four-month consolidation. On Friday, BioNTech gained nearly 5% after the company asked European regulators to authorize the Covid vaccine for teenagers.

Moderna (MRNA) and Johnson & Johnson (JNJ), whose vaccines are the other two approved for use in the U.S., advanced a respective 4.4% and 1.4% on Monday.

CNBC reported that Moderna plans to donate 34 million doses of its Covid-19 vaccine to the COVAX global distribution effort. The total agreement for 500 million doses will see most of its deliveries from the company in 2022. Moderna stock is about 1% away from a 189.36 buy point of a cup base.

Dow Jones Winners And Losers

Inside the Dow Jones, Dow Inc. (DOW), Home Depot (HD), Amgen (AMGN) and Walgreens Boots Alliance (WBA), all up more than 2%, were the biggest blue-chip gainers.

Dow continues to work on a seven-week flat base with a 67.37 buy point, according to MarketSmith chart analysis. It’s about 5% away from the entry.

Home Depot gained 2.3% to climb past a 328.77 buy point of a three-weeks-tight pattern. It’s still in potential buy range from the entry.

Disney (DIS) added 0.4% as it builds a flat base with a 203.12 buy point. The media giant’s California theme parks reopened Friday with limited capacity, after being closed since March 2020. Analysts expect earnings to fall 55% to 27 cents a share on 12% lower revenue of $15.8 billion when Disney reports May 13. Disney stock is about 8% away from the entry.

Only three Dow Jones stocks sat out the market rally: Visa (V), Intel (INTC) and (CRM).

Outside The Dow

Oil and gas, transport, retail and gold mining stocks led the upside among IBD’s 197 industry groups. But automaker, airline, software and semiconductor stocks lagged.

In the automaker group, Tesla (TSLA) skidded nearly 4% to test its 50-day moving average line, which it had regained on Friday. The electric-vehicle maker’s stock is working on a new cup with handle with a 780.89 buy point. But it is a late-stage base, which increases the risk of a failed breakout.

On Jan. 25, Tesla stock hit a record high of 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.

Follow Nancy Gondo on Twitter at @IBD_NGondo


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