The Dow Jones Industrial Average sank after President Donald Trump issued a coronavirus stimulus demand, while a bipartisan group got set to release its own proposal for a $908 billion relief bill. Meanwhile EV stock Nio (NIO) sank closer to its 50-day moving average, even as Tesla (TSLA) made good gains. McDonald's (MCD) and Intel (INTC) were the best performing blue chips. A number of stocks managed to stage breakouts, despite the mixed action.
X"Right now, I want to see checks — for more money than they're talking about — going to people," Trump told Fox News Sunday. "I'm pushing it very hard, and to be honest with you, if the Democrats really wanted to do the deal, they'd do the deal." Trump is said to support sending a direct cash payment of up to $2,000 to Americans.
His statement comes as a bipartisan group from both chambers of Congress gets set to release a $908 billion rescue bill Monday. It comes amid ongoing gridlock that led to Senate Majority Leader Mitch McConnell lashing out on the Senate floor last week.
"It doesn't have to be every single word that we hand [congressional leaders] … but this is a clear roadmap for them," Rep. Josh Gottheimer (D-NJ) of the House Problem Solvers Caucus told CNBC.
Meanwhile, the coronavirus pandemic passed a grim new milestone, as total virus-related deaths in the U.S. passed the 300,000 mark. In addition, the cumulative number of confirmed Covid-19 cases in the U.S. reached almost 17 million Monday, according to the Worldometer data tracker.
Nasdaq Leads S&P 500
The tech-heavy Nasdaq outperformed, rising 0.5%, but it closed near session lows. Alexion Pharmaceuticals (ALXN) was the best performer, surging almost 30% on the news that AstraZeneca (AXN) is buying it for $39 billion in cash and stock. Other good performers included Tesla and Incyte (INCY).
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 29860.04 | -186.33 | -0.62 |
| S&P 500 | (0S&P5) | 3647.33 | -16.13 | -0.44 |
| Nasdaq | (0NDQC ) | 12440.04 | +62.17 | +0.50 |
| Russell 2000 | (IWM) | 190.19 | -0.11 | -0.06 |
| IBD 50 | (FFTY) | 40.02 | +0.33 | +0.83 |
Last Update: 4:14 PM ET 12/14/2020 |
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The broad-based S&P 500 did not fare as well, giving up early gains as it slumped 0.4%. Stocks faring worst were Occidental Petroleum (OXY), which gave up more than 8%, and Diamondback Energy (FANG) which fell around 6%.
Volume was slightly higher than Friday, according to early data. Trading rose 1.5% on the NYSE and around 2.4% on the Nasdaq.
The Russell 2000 small-cap index eked out a small gain, up 0.1%.
It was a tough day for several S&P 500 sectors, with most turning in losses. The only ones in the green were consumer discretionary and technology.
Relatively speaking, growth stocks performed very well. This is reflected in the IBD 50 ETF (FFTY) rising 0.8%. The best performers in the IBD 50 index included Digital Turbine (APPS), which gained more than 8%, and Leaderboard stock Advanced Micro Devices (AMD). After a breakout from a double-bottom base, AMD stock is approaching an alternate entry of 96.47.
McDonald's Gain Not Tasty Enough For Dow Jones
The Dow Jones Industrial Average also ended near session lows, down 0.6%. It had gained early, but rising optimism about the Covid-19 vaccine rollout was tempered with worries over more restrictions due to the virus.
McDonald's was the best performer after turning in a gain of around 2.5%. However some of the fast food stock's gains were digested before the end of the session, and it continues to lag its 50-day line. Sentiment was positive after UBS upgraded MCD stock to buy from neutral and lifted its price target to 240 from 230.
Intel was another strong performer, gaining 1.7%. But there were more losers than winners. Walt Disney (DIS) and Chevron (CVX) lagged with losses of more than 3%.
Nio Sinks As Tesla Accelerates
It was another mixed session for EV stocks. Chinese player Nio fell on news of a share offering. It gave up more than 2% and is now close to its 50-day moving average. It has fallen far from its Nov. 24 high of 57.20. Breach of the 50-day line qualifies as a sell signal.
On Monday, Nio said it raised about $2.65 billion in an upsized share offering. It solid 68 million American depositary receipts (ADS) at 39 per share, a 7% discount to Friday's closing price of 41.98.
IBD Leaderboard stock Tesla fared better, as it posted a gain of almost 5%. It remains extended from a 466 buy point after breaking out of a cup-with-handle base. Tesla has a best-possible IBD Composite Rating of 99. Tesla stock is up more than 660% so far in 2020.
Building Stock Among Breakouts
Sterling Construction (STRL) shot above a buy zone after breaking out of a cup-with-handle base Monday, MarketSmith analysis shows. The ideal buy point is 17.35.
The RS line has been making strides since mid-June and, after leveling off in recent weeks, spiked sharply Monday. Its decline had coincided with the establishment of its handle.
STRL stock has a near-perfect IBD Composite Rating of 98. This puts it in the top 2% of stocks tracked. Earnings are a key strength, with its EPS Rating a very strong 97 out of 99.
Sterling Construction engages in heavy civil construction projects in states including Texas, Utah, Nevada, Arizona, California and Hawaii.
Inseego (INSG) broke above its buy zone from a cup base, before slipping back below its 15.35 buy point. The telecom stock, which designs 5G cards and mobile hotspot products, has a strong Composite Rating of 92. Earnings are lagging however.
AutoNation (AN) passed a cup-with-handle buy point of 67.86, but closed below it. It boasts a top notch Composite Rating of 95, with good price and EPS performance.
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