Stocks jumped at the starting bell, then turned mixed Monday, as the Dow launched into November with another new high. Align Technology (TSLA) and Diamondback Energy (FANG) were early leaders. ON Semiconductor (ON) rallied on earnings. Steelmakers and Harley Davidson (HOG) were mixed after a U.S.-E.U. tariff agreement. And Salesforce.com (CRM) ran high on the head of the Dow Jones today following an analyst price target hike.
XThe Dow Jones futures Industrial Average trimmed is advance to 0.2% on the stock market today. The S&P 500 and the Nasdaq Composite reversed early gains and dropped about 0.1% each.
Tesla (TSLA) climbed 1.7%, as the stock garnered Monday's broadest positive social media commentary on the WallStreetBets channel early Monday, according to SwaggyStocks. The IBD Leaderboard stock triggered the eight-week hold rule by rising more than 20% above a 900.60 buy point in fewer than two weeks following its breakout.
China-based EV makers began reporting October sales. Xpeng (XPEV) rallied almost 2% on a strong monthly report. Nio (NIO) shed its premarket loss and rose 0.3%, after its October sales dived due to production issues.
In earnings news, ON Semiconductor spiked 12% after reporting a solid third-quarter earnings and revenue beat. Ahead of the release, the company announced it had completed its $415 million acquisition of GT Advanced Technologies.
Arista Networks (ANET), Mosaic (MOS) and IBD 50 stock Diamondback Energy (FANG) are due to report during today's afterhours session.
In addition, specialty chemicals maker Albemarle (ALB) gained 1.7% in early action. That stirred a starting bell breakout past a 253.19 buy point in what IBD MarketSmith analysis identifies as an eight-week cup base. On a daily chart, the stock was already in a buy zone above a cup-with-handle base buy point at 244.46.
Moderna (MRNA) dropped 6%, the deepest drop on the S&P 500 and Nasdaq 100. The biotech announced Monday the Food And Drug Administration required more time to review vaccine doses in persons aged 12 to 17 years.
Dow Jones Today: Salesforce, Goldman Sachs Climb
Salesforce.com eased its early gain on the Dow Jones today, rising 0.5% in early action. Morgan Stanley raised its price target on the stock to 360, from 345, while keeping its overweight rating. The note estimated Salesforce's potential market at $255 billion, reinforcing the 20% CAGR growth forecast.
Salesforce stock is extended, up 10% from a late-September breakout.
Goldman Sachs (GS) also perked higher early Monday, up 0.5%. Goldman shares ended Friday less than 2% below a 420.86 buy point in a flat base. The stock rose 9.3% in October, and is ahead 57% since the start of the year.
U.S.-E.U. Steel Deal Twists Steelmakers, Lifts Harley Davidson
Steel stocks opened mixed as the U.S. and European Union agreed during the weekend's G-20 summit to a workaround of trade-war era steel and aluminum tariffs. The agreement allows limited quantities of steel and aluminum into the U.S. without the tariffs. The U.S. had imposed tariffs of 25% on steel products and 10% on aluminum, beginning in January 2018.
U.S. Steel (X) fell 2.5%. IBD Leaderboard stock Nucor (NUE) and Steel Dynamics (STLD) each dropped about 3%. A number of overseas steelmaker rallied. ArcelorMittal (MT) gained 1.4%. Tenaris (TS) rose 1.8%.
Harley Davidson jumped 9% at the starting bell, then pared back to a 7.2% gain. Shares rose following announcement off the trade deal, which included EU regulators reducing import tariffs against Harley and other items such as Kentucky bourbon, back to pre-trade war levels.
Economic News; Global Markets
The market launches into a week of heavy-duty economic news with a pair of manufacturing gauges on Monday. Markit reported its final October purchasing managers eased to 58.4, below the consensus target of 59.2.
The Institute for Supply Management's October PMI came in at 60.8, down from 61.1 in September, but above projections for a 60.3 tally.
Global markets moved generally higher, although China's markets ended Monday sharply lower, after a disappointing read on October manufacturing. In Japan, Tokyo's Nikkei 225 surged 2.6% as the country's Liberal Democratic Party maintained its majority status in elections on Sunday.
Europe's markets traded near their early highs in afternoon action. The CAC-40 in Paris climbed 0.8% and Frankfurt's DAX added 0.6%, while the FTSE 100 in London gained 0.7%.
IBD 50: Cleveland Cliffs, Diamondback Energy
Some of the IBD 50 stocks that remain near buy points in valid bases include Cleveland-Cliffs (CLF), Monday.com (MNDY) and Freedom Holding (FRHC).
Cleveland-Cliffs rose 1.2% early Monday. Shares ended Friday about 10% below a 26.61 entry in a 10-week consolidation.
Freedom Holding, the Kazakhstan-based security brokerage, has been hovering just below a 68.90 entry in a 17-week flat base. The stock has a year-to-date gain of 29.4%, despite spending 33 of the year's 43 weeks in consolidations.
Diamondback Energy is also on Monday's radar, in a buy range ahead of its third-quarter report due out after today's closing bell. FANG shares rose 1.6% early Monday. The buy zone extends to 107.76.
Vital Signs: Oil, Bond Yields, Bitcoin
West Texas Intermediate oil prices snapped a nine-week rally last week, dipping 0.2% to $83.57 — only slightly off from a seven-year high. WTI on Monday rose 1.1% to just above $84 a barrel. The Organization of Petroleum Exporting Countries and partners led by Russia plan to meet Thursday to discuss production quotas.
Time The Market With IBD's ETF Market Strategy
Bond yields edged up, with the 10-year Treasury yield adding 3 basis points to 1.59%. The 10-year yield tumbled from an October high of 1.69% last week, as markets began bracing for a possible shift in the Federal Reserve's bond-buying stimulus strategy.
Bitcoin gained 2% to trade above $61,800, according to CoinDesk. The cryptocurrency traded as high as $66,879 on October 20. It is up nearly 114% since the start of the year.
Nasdaq, S&P 500 And Dow Jones Today
Early action on the Dow Jones today points the index toward a third possible advance as the index rides support at its short-term 10-day moving average. The Dow posted a record weekly record close on Friday, after scratching off a new record high above 35,892 last Tuesday. A four-week advance left the index with a healthy 5.8% gain for October — its best month since March.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The S&P 500 notched a 6.9% gain for the month. The Nasdaq Composite rallied 7.3%. That was the strongest month for both indexes since last November.
The Nasdaq's five-day rally appears to have beaten a brief spate of resistance near the index's early September high. A combination of reaction to September-quarter earnings reports, and to what appears to be progress toward a pair of massive stimulus and social services spending programs in Washington.
A solid four-week rally sets the market up for a possible spell of consolidation. Wednesday's policy announcement from the Federal Reserve or an OPEC decision on Thursday could serve as triggers to a pullback. News regarding negotiations over the spending bills in Washington also remain wild cards.
For now, however, the market's confirmed uptrend status provides investors what they need to know. Well-vetted stocks passing valid buy points are fair game, and investors are free to increase exposure to the market.
You can find Alan R. Elliott on Twitter @IBD_Aelliott
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