Stock futures braced for another round of early losses Tuesday, after coronavirus-related deaths rose to more than 500,000 on Monday, and an increase in newly reported coronavirus cases snapped a 41-day decline. However, a $1.9 trillion stimulus plan moved forward in the House, aiming for a mid-March deadline. That helped to lift oil prices and some pandemic recovery plays. Earnings news boosted ZoomInfo, Cadence Design and Air Lease. Home Depot lagged on the Dow Jones today, following its Q4 report.
Dow Jones future traded a fraction above fair value. S&P 500 futures slipped 0.3%, while Nasdaq 100 futures unwound 1.4%.
China-based Trip.com (TCOM) rallied 5.5% to head the Nasdaq 100. Its shares are just out of a buy range above a 12-week cup base. At the bottom of the Nasdaq, Baidu (BIDU), Tesla (TSLA), PayPal Holdings (PYPL) and Zoom Video (ZM) all traded down more than 3%.
Enphase Energy (ENPH) and Tesla traded lowest among S&P 500 stocks. Marathon Oil (MRO) jumped 2% despite reporting mixed fourth-quarter results late Monday. Oil-industry names held eight of the top 10 moves on the S&P 500.
Chevron (CVX) gained on rising oil prices and Boeing (BA) rebounded in early trade after Monday’s slip. That left the Dow Jones today looking set to attempt a repeat of Monday’s scrappy performance, in which a third of its stocks rose more than 1%, countering the profit-taking that drove the broad market lower.
Earnings News: ZoomInfo, Air Lease, Cadence Design
ZoomInfo rallied more than 7% after topping analysts’ fourth-quarter revenue and earnings views late Monday. At least four analysts raised price targets on the stock early Tuesday. Piper Sandler weighed in at the top of the list with a 70 price target. ZoomInfo stock has been volatile, reversing an 11% advance from a Feb. 3 breakout and diving back below the 53.18 buy point — as well as cutting support at its 21-day exponential moving average on Monday.
Technically, the pullback triggered a sell rule, but the pullback stopped short of triggering the automatic stop-loss rule. Tuesday’s premarket action points to the stock retaking the buy point in early trade, a valid buy opportunity. But investors should be sure to mind the shifting status of the uptrend, especially before diving into volatile young IPO stocks.
Air Lease moved up a modest 0.5% after reporting a much smaller than expected slip in fourth-quarter earnings. Air Lease stock ended Monday just above a 46.14 buy point in what IBD MarketSmith analysis pinpoints as a six-week flat base.
Dow Jones Today: Home Depot
Home Depot (HD) pared early losses, but remained down 2.2% on the Dow Jones today, after reporting a strong fourth-quarter earnings and revenue beat late Monday. The company also increased its quarterly dividend 10%, to $1.65 per share.
The drop, if it holds through the open, sets Home Depot stock up to cut below its 10-week moving average.
The stock has been sawing above and below the line since August, forming in the process a 26-week flat base. The base has a 293.05 buy point. Shares ended Monday 6% below that entry.
Stimulus Set For House Floor Vote
In Washington, the House Budget Committee passed President Joe Biden’s $1.9 trillion American Rescue Plan Monday after a 19-16 vote, with Republicans opposing the measure. The move sets the package up for a House floor vote later this week. House Democrats are aiming to have the package ready for the president’s signature before current supplemental unemployment benefits expire on March 14.
Federal Reserve Chairman Jerome Powell is due to address the Senate Banking, Housing and Urban Affairs Committee at 10 a.m. ET.
Bonds, Copper Flat; Oil At 13-Month High
Among other U.S. markets, bonds flattened, with the 10-year yield down 1 basis point at 1.36%. Yields had started 2020 at around 1.8%, down from about 2.7% a year earlier. Oil prices rose, with West Texas Intermediate crude up 0.8% to above $62 a barrel, and at its highest level since Jan. 8, 2020. Europe’s Brent crude benchmark rose to near $66. Copper also paused its rally, with futures trading flat near $4.14 a pound, the highest mark since July 2011.
Bitcoin Dives Below $46k
Bitcoin continued its sharp pullback on Tuesday, sinking below $46,000, rewinding the cryptocurrency to its lowest level since Feb. 11, according to CoinDesk. Bitcoin had climbed to a record high above $58,000 on Sunday.
IBD Leaderboard stock PayPal Holdings dropped 3.9%. PayPal stock has felt some influence from Bitcoin price swings since October, when the company launched a cryptocurrency trading service that deals in Bitcoin. The loss points PayPal stock toward a drop below its 21-day moving average, and a possible test of support at its 10-week line.
Coronavirus Update: 41-Day Decline Ends
As the cumulative death toll from the coronavirus pandemic in the U.S. climbed above 500,000 on Monday, the seven-day average for new Covid-19 cases reported daily in the U.S. and worldwide ticked higher for the first time in 41 days. New cases reported worldwide, averaged across the prior seven days, increased to 360,341 on Monday. That is more than 50% below the high of 745,985, recorded on Jan. 11.
In the U.S., the seven-day average for new reported cases rose on Monday to 69,528, still down more than 72% from the peak of 255,258 reached on Jan. 11, according to Worldometer.
Deaths also ticked higher for a second day. The seven-day average for deaths reported daily rose to 2,042 on Monday. The daily average for deaths reported had fallen for 25 days after hitting a high of 3,447 on Jan. 26.
The Centers for Disease Control and Prevention reports that 75.2 million doses of vaccine have so far been distributed in the U.S. Some 64.177 million doses have been administered, meaning just under 20% of the U.S. population has so far received at least one shot.
Dow Jones Today: Salesforce Earnings
Salesforce stock is climbing the right side of a cup base that formed after a failed November breakout from a double-bottom base. MarketSmith puts the buy point at 271.02, and Salesforce shares were about 10% below that mark at the end of trade on Friday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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