Dow Jones Jumps Again On Fed Hopes; Twitter Stock Skyrockets As Tesla’s Elon Musk Gives In

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Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally attempt continued on Tuesday as government bond and dollar yields retreated amid hopes the Federal Reserve could delay rate hikes. TWTR shares skyrocketed as Tesla CEO Elon Musk agreed to go ahead with the $44 billion Twitter (TWTR) acquisition.




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Major indices are moving higher but have not yet recaptured key levels or confirmed the new rally attempt.

Mega caps Apple (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOGL) and Amazon.com (AMZN) all made strong gains. But only Microsoft shares closed above the 21-day moving average.

Leading stocks show positive action. Arista Networks (A NET), Enphase Energy (ENPH), Pay location (PCTY), On semiconductor (Open Devon Energy (DVN) are all at or approaching early buying points. If the market rally continues to gain momentum, these stocks should be usable. They all have relative strength lines at or near highs.

Paylocity stocks are on the IBD Leaderboard watchlist and were Tuesday’s IBD stock of the day. The shares of Microsoft and Google are on the IBD Long-Term Leaders list. Enphase, On Semiconductor and DVN stocks are on the IBD 50 list. ENPH shares, Onsemi and Arista Networks are on the IBD Big Cap 20.

The video embedded in this article highlighted Tuesday’s market action and analyzed shares of PCTY, On Semiconductor and Neurocrine Life Sciences (NBIX).

Elon Musk says he will go through with Twitter deal

Musk agreed to go ahead with the $44 billion, $54.20 per share Twitter deal. Attorneys for Musk and Twitter were set to meet Tuesday night in an emergency hearing of the Delaware Court of Chancery to discuss how to close a deal.

The Musk-Twitter saga isn’t quite over yet. Twitter has not accepted Musk’s latest terms, which offer no real guarantees about his purported intention to go ahead with the term. Still, Musk may officially own the social media site in a few days.

The Musk-Twitter trial was set to begin on October 17, with the Tesla CEO having a high chance of losing.

Twitter shares, which had been shut down for much of the session, shot up 22% to 52 as Musk blinked. While TWTR shares traded well below its $54.20 acquisition price, it significantly outperformed Facebook parent company Metaplatforms (META) and snap (SNAP) in recent months.

Twitter shares fell lower in active after-hours trading.

Tesla (TSLA) rose 2.9% to 249.44, a drop from intraday highs of 256.89 after the latest Musk-Twitter news. Investors may wonder if Musk will sell TSLA stock to pay for the Twitter deal, though he has already sold stock using the Twitter deal as the reason. Longer-term, investors in Tesla stocks may fear that Musk’s focus will be further separated from the EV giant if he adds Twitter to his portfolio of companies. Still, past TSLA investors may be happy to get the Musk-Twitter takeover saga.


Tesla vs BYD: Which EV Giant is the Best Buy?


Dow Jones Futures Today

Dow Jones futures fell 0.3% from fair value. S&P 500 futures fell 0.3%. Nasdaq 100 futures fell 0.2%.

Keep in mind that an overnight action in Dow futures and elsewhere does not necessarily lead to actual trading in the next regular trading session.


Join IBD experts as they analyze actionable stocks during the stock market rally on IBD Live


stock market rally

The stock market rally followed Monday’s rally with strong gains on Tuesday, although major indices pulled back from intraday highs.

Australia’s central bank raised interest rates for the sixth straight month, but unexpectedly only by 25 basis points. This followed the resumption of bond purchases by the Bank of England last week as the new UK government’s budget pushed the pound and UK debt soar.

The rally effort gained momentum at 10 a.m. ET after the JOLTS report found job vacancies plummet in August, well below displays. Fed chief Jerome Powell specifically cited vacancies as too high. While openings and layoffs are still high, the trend is Fed-friendly. On Friday, the Ministry of Labor will publish its September jobs report.

The Dow Jones Industrial Average rose 2.8% in trading on Tuesday. The S&P 500 index shot up 3.1%. The Nasdaq composite rose 3.3%. The small-cap Russell 2000 shot up nearly 4%.

Apple shares rose 2.6%, while Microsoft rose 3.4%. Both are members of the Dow Jones, S&P 500 and Nasdaq. Google shares climbed 3% and Amazon rose 4.5%. All added to solid gains Monday, but a lot of repair work is needed.

The price of crude oil in the US shot up 3.5% to $86.52 a barrel. OPEC+ is meeting on Wednesday, with reports that the cartel could cut production by 1 to 2 million barrels per day.

Gasoline futures were up 6.8%, signaling further gains at the pump. Natural gas futures were up 5.7%.

The 10-year yield fell 3 basis points to 3.62%, after falling 15 basis points on Monday. For a second consecutive day, 10-year yields found support on the 21-day rising line.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) gained 3.4%. The iShares Expanded Tech-Software Sector ETF (IGV) was up 3.8%, with MSFT stocks being a major IGV holding company. The VanEck Vectors Semiconductor ETF (SMH) rose 4.3%.

SPDR S&P Metals & Mining ETF (XME) rose 3.8%. US Global Jets ETF (JETS) rose 7.1%. The Energy Select SPDR ETF (XLE) added 4.3%. The Health Care Select Sector SPDR Fund (XLV) gained 2.3%.

As a result of more speculative story stocks, ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) both rose 7.6%. Tesla stocks are a major holding in Ark Invest’s ETFs.


Five best Chinese stocks to watch right now


Stocks near buying points

ANET shares rose 4.3% to 120.81 and recaptured the 200- and 50-day lines, although volume was low. A decisive move above the 50-day line would likely break a short downtrend. Arista shares are working to a buy point of 132.97 from a consolidation over a much longer basis.

ENPH stock rose 0.6% to 288.55, but fell from 297.67 intraday. At its peak, Enphase stock recaptured its 50-day and 21-day lines and broke a brief downtrend.

PCTY shares rose 3.55% to 252.33, rebounding from its 50-day line in strong volume. Paylocity stocks are right at a trendline entry, with a move above the Sept. 28 high of 253.26 as a possible specific trigger point. The human resources software maker is in consolidation with a buy point of 276.98, according to MarketSmith’s analysis.

ON shares jumped 6.4% to 68.92 and recaptured the 50-day line, although trading was modestly below average. With a little more strength, Onsemi could erase a trendline within a new consolidation next to an earlier, deeper base.

DVN shares gained 5.7% to 69.07, a 50-day rally as it operates at a head-to-head and a buy point of 75.37. Devon stock comes to a trendline within the handle.


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Market rally analysis

The attempted rally in the stock market continued to climb, with a second strong gain for the major averages. The composite Dow Jones, S&P 500 and Nasdaq moved above their 10-day moving average and closed close to their 21-day lines. Still holding the lead, the small-cap Russell 2000 recaptured the 21-day.

All indices still have some distance to reach their declining 50-day and 200-day moving averages, with the mid-August peaks yet another key area of ​​resistance.

Megacaps like Apple stocks are doing their part this week, but still have a long way to go.

However, leading stocks outperform the major indices, with several stocks breaking out, flashing early entries or getting into position for potential entries.

The stock market was demonstrably ready for a rebound. The decline in government bond yields and the dollar clearly contributed to this week’s gains in equities. But if yields and the dollar resume their upward trend, the market rally could quickly spiral out of control.

As stocks rise in hopes that the Fed will slow the pace of rate hikes, markets continue to price in a fourth 75 basis point hike in November and a half-point move in December.

Tuesday was day two of a rally for the Dow, S&P 500 and Nasdaq. A follow-up day could come later this week to confirm the new uptrend.

Some might argue that the Russell 2000 and S&P MidCap 400 had “follow-through days” on Tuesday. It is a positive sign, but will not lead to a change in the direction of the market. Why? There is a low success rate for FTDs that do not include the Dow Jones, S&P 500 and Nasdaq.

A confirmed market rally could be just the start of a tradable bear market rally versus a long-term uptrend. The 50 day and 200 day lines would be important levels to watch after an FTD.


Time the Market with IBD .’s ETF Market Strategy


What to do now

The stock market rally is gaining momentum, with some leaders flashing buy signals. Investors could take a number of pilot positions in certain stocks or broad-market ETFs. But anyone who gets in early should be ready to jump out just as quickly if the market recovery falters.

There is still nothing wrong with being almost or all cash.

But it is definitely a time to work on your watchlists and pay close attention to the market. Look for quality stocks that are usable or nearly so.

Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.

Follow Ed Carson on Twitter at @IBD_ECarson for stock updates and more.

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The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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