The Dow Jones Industrial Average dove more than 800 points on coronavirus fears early Wednesday, as the record-breaking stock market rally took a breather. Dow Jones stock Apple eased from all-time highs, while Warren Buffett-backed StoneCo gave up recent buy point.
Blue chip stocks Apple (AAPL) and Microsoft (MSFT) lost 1.9% and 2.1%, respectively, in today’s stock market. Dow Jones stock Walmart (WMT) continues to trade below a new buy point. Stocks in or near buy zones include IBD Stock Of The Day StoneCo (STNE), Taiwan Semiconductor (TSM) and IBD Leaderboard stock Netflix (NFLX).
DJIA Today: Stock Market Losses Mount
The Nasdaq composite moved down 2.5% early Wednesday, backing off from Tuesday’s all-time highs. The S&P 500 fell 2.8%, while the Dow Jones industrials lost 2.9%.
Among exchange traded funds, Innovator IBD 50 (FFTY) moved down 3.3%. The ETF of top growth stocks is about 8% off its 52-week high. Meanwhile, the Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) fell 2.4%, and the SPDR S&P 500 (SPY) ETF was down 2.9%.
The 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.
Within the coronavirus stock market rally, the tech-heavy Nasdaq 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 exceeded 2.4 million Wednesday. 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 topped 9.3 million Wednesday, with more than virus-related deaths rising to more than 480,000.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the coronavirus stock market rally remains in an uptrend after rebounding from lows over three months ago on March 23. The major stock indexes confirmed the rebound as a new uptrend on April 2.
Per Tuesday’s The Big Picture, “FAANG stocks continued to show leadership and helped boost the Nasdaq 100-tracking Invesco QQQ Trust ETF to a gain of nearly 0.9% and new all-time highs. At 10,209, with five trading days left in the second quarter, the Nasdaq 100 has a whopping gain of more than 30% for the second quarter.”
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.
Dow Jones News: Walmart’s New Buy Point
Among the Dow Jones stocks, Walmart continues to form a flat base with a 133.48 buy point. Shares fell 1.1% in morning trade.
The retail giant is about 9% away from the new buy point, as it finds support around its long-term 200-day line. But shares are still below their 50-day line.
A big weakness is the stock’s lagging relative strength line. Walmart shares haven’t been participating in the stock market rally since they reached an all-time high on April 20.
Breakout Stocks To Watch: StoneCo, TSMC, Netflix
On Tuesday, IBD Stock Of The Day StoneCo broke out above a 40.27 buy point in a cup with handle amid a 4.7% advance, according to MarketSmith chart analysis. Shares are below the new buy point after Wednesday morning’s 5.9% plunge.
Warren Buffett is a noted backer. His firm Berkshire Hathaway (BRKB) holds 14.17 million shares, which accounts for 8% of all StoneCo stock.
Tuesday’s IBD 50 Stocks To Watch pick, chip leader Taiwan Semiconductor — also known as TSMC — is approaching a new buy point at 58.14. Shares are about 3% below the new buy point amid Wednesday’s 0.9% loss.
IBD Stock Checkup shows that TSMC stock has a 97 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.
FANG stock leader Netflix gave up its 459.07 buy point in a flat base after Monday’s breakout. The 5% buy range goes up to 482.02. Early Wednesday, shares fell 2.3% to drop below the entry.
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 to a full position Monday.”
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple dropped 1.9% early Wednesday after shares surged to new highs Tuesday, topping out at 368.53 a share.
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 eased from record highs early Wednesday with a 2.1% fall. 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.
The blue-chip giant is an IBD Leaderboard stock idea and an IBD Long-Term Leader.