The Dow Jones Industrial Average fell more than 175 points before trimming losses midday Friday, as rising U.S.-China tensions outweighed coronavirus vaccine optimism. Dow Jones stock leader Intel fell further below a new buy point, while Alibaba and Nvidia moved in opposite directions after reporting earnings, as the current stock market rally continued.
Tech leaders Apple (AAPL) and Microsoft (MSFT) are near new buy points in today’s stock market. Dow Jones stock leader Intel (INTC) fell 0.5% and is further below a buy point. IBD Leaderboard stock Nvidia (NVDA) rallied more than 2% on earnings. Chinese e-commerce giant Alibaba (BABA) dove 4.5% on earnings results ahead of the stock market open.
Dow Jones Today: Coronavirus Vaccine, U.S.-China Tensions
The Nasdaq composite reverted to early losses, down 0.1% Friday morning. At around 11:45 a.m. ET, the S&P 500 was down 0.3%, while the Dow Jones industrials lost 0.5%.
Early Friday, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said early coronavirus vaccine data from Moderna looked “promising.” Moderna (MRNA) shares jumped 4% in morning trade before paring gains to about 2%. Moderna stock is about 20% off their 52-week high.
Meanwhile, China announced a new national security law aimed at imposing more control over Hong Kong. The move was widely seen as a challenge against the United States. Earlier this week, the U.S. Senate passed a bill that could eventually put at risk the U.S. listings of companies based in China.
The recent actions come less than a month after President Trump said at a White House event — on April 30 — that he could use tariffs to punish China over the coronavirus outbreak.
Among exchange traded funds, Innovator IBD 50 (FFTY) traded up 0.2% Friday morning. The ETF of top growth stocks is about 15% off its 52-week high. Meanwhile, the Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) fell 0.15%, and the SPDR S&P 500 (SPY) ETF dropped 0.3%.
The tech-heavy Nasdaq is once again positive for 2020, up 3.5% through Thursday’s close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 8.7% and 14.2%, respectively, through May 21.
Coronavirus News: U.S. Cases Top 1.6 Million
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 1.6 million Thursday. Despite the rising total, the daily number of new cases is trending lower amid the sharp increase in testing.
Confirmed Covid-19 cases worldwide climbed above 5.2 million, with about 335,000 virus-related deaths. With the daily number of new cases falling, investors in the U.S. are turning attention to the economic impact of the coronavirus outbreak and how fast the country reopens for business.
Stock Market Uptrend
According to IBD’s The Big Picture, the stock market uptrend remains solid despite Thursday’s losses after hitting lows nearly two months ago on March 23. The major stock indexes confirmed a new uptrend on April 2.
Per Thursday’s Big Picture, “With still only one day of institutional selling on the Nasdaq (May 12), the uptrend remains in a bullish mode. Meanwhile, the S&P 500 still only has a couple of distribution days, indicating positive sentiment still outweighs the negative.”
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: Intel Gives Up Buy Point
Among the Dow Jones stocks, chip leader Intel is below a new buy point at 62.23 in a cup with handle after losing the entry on Thursday, according to MarketSmith chart analysis. Intel is one of the top Dow Jones stocks to watch in May. Shares moved down 0.5% Friday morning.
According to the IBD Stock Checkup, Intel stock boasts a highest-possible 99 IBD Composite Rating, placing it in the top echelon of growth stocks. The Composite Rating is a blend of key fundamental and technical metrics to help investors easily gauge a stock’s strengths.
Stock Market News: Alibaba, Nvidia
Chinese e-commerce giant Alibaba dove more than 4% despite reporting better-than-expected earnings and sales results early Friday. Shares fell further below a recent buy point and triggered the 7%-8% loss-cutting sell signal.
On Thursday, Alibaba dropped 2.1% to give up the 216.20 buy point in a cup with handle.
According to IBD Leaderboard commentary, “Nvidia is extended from a 275.50 cup-with-handle buy point as well as an alternate handle entry of 299.10. It’s a three-quarter position on Leaderboard.”
Dow Jones Leaders: Apple, Microsoft
Dow Jones leader Apple stock was up 0.1% early Friday. A new handle offers a 319.79 buy point. Shares tried to break out past that entry on Thursday, but closed below that level.
Shares are extended past the 5% buy zone of a cup-with-handle’s 288.35 buy point, according to MarketSmith chart analysis. The 5% buy range goes up to 302.77. Shares are just 3% off their all-time highs, nearly completing a remarkable recovery from the coronavirus stock market crash.
Tech giant Microsoft moved down 0.3% Friday morning. The software leader is just under a new 187.51 buy point amid a slow-going breakout move above a cup-with-handle’s 180.10 buy point.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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