The Dow Jones Industrial Average gained momentum in the stock market today while Google stock triggered a key buy signal. Investor sentiment turned largely positive on news that economies are quickly reopening and progress is being made on a potential coronavirus vaccine.
XStock Market Today
Investors showed increased optimism as economic activity appears to be recovering faster than expected. This includes an increase in economic activity such as restaurant bookings, hotel spending and airline activity across parts of the U.S. and elsewhere in the world.
In afternoon trading on Tuesday, the Dow Jones rose 2.7%. The S&P 500 gained 1.8% while the Nasdaq was up 0.8%. Volume was heavier on both the Nasdaq and NYSE exchanges vs. the same time on Friday.
Currently, the S&P 500 remains roughly 12% off its 52-week high while the Dow Jones remains 15% off its 52-week high. The Nasdaq, which has been strongly outperforming both, remains roughly 4% from prior highs.
As noted on Tuesday's IBD Live episode, there's been a strange divergence between the major benchmarks in recent weeks as the Nasdaq has strongly outperformed the other indexes. No matter what, such a divergence has to resolve itself. Right now, it seems the Dow and S&P 500 are catching up to the Nasdaq's bullishness, which is a promising sign.
As such, the S&P 500 reclaimed its 200-day moving average this morning and is now trading back above the key 3,000 price level. As of now, the benchmark is on track to close just above that key area.
The stock market has been in a confirmed uptrend since the S&P 500's follow-through day on April 2. Read The Big Picture for further detailed analysis on daily market action.
Dow Jones Today
On the stock market today, the Dow vaulted as much as 700 points in afternoon trading as it reclaimed its key 25,000 price area.
On Tuesday, 29 of the 30 Dow Jones components rose while 15 of the components rose more than 3%. Among the Dow's biggest winners were financial firms Goldman Sachs (GS), JPMorgan (JPM) and American Express (AXP), which gained 8.6%, 7.7% and 6.4%, respectively.
Meanwhile, Microsoft (MSFT) was the only Dow stock trading lower. The stock is now back inside a valid 5% buy zone off a double bottom base with 175.10 entry. The buy zone tops out at 183.85. Microsoft also can be considered to be above the 180.10 buy point of a cup with handle.
Stocks On The Move
Among exchange traded funds, Innovator IBD 50 (FFTY) fell 0.3% Tuesday.
Meanwhile, stocks on the move included Dropbox (DBX), Inphi (IPHI) and GSX Techedu (GSX), which rose 5.6%, 4% and 5.1%, respectively.
Stocks to watch heading into the close Tuesday include StoneCo (STNE). Shares of StoneCo have been on a tear, trading roughly 6.7% higher on the stock market today. StoneCo is set to report earnings after the market closes. According to IBD data, analysts expect an EPS decline of 18% year over year to 14 cents a share on revenue of $120.4 million.
Investors should be well positioned at this point with several good stocks in your portfolio since the bottom of the crash. However, if you don't have enough stocks in your portfolio at this time and feel the need to build up your exposure, Google stock is giving investors a strong opportunity.
The internet giant and FAANG group member gapped up in heavy volume Tuesday morning, clearing the 1,415.63 buy point from a cup-with-handle base. Google parent company Alphabet (GOOGL) is currently an IBD SwingTrader stock.
Shares of Alphabet rose 2% but tapered off gains in afternoon trading to about 1%. According to MarketSmith chart analysis, the stock is now trading inside its 5% buy zone that tops out at 1,486.30. Alphabet's base declined 34% during the coronavirus stock market crash, which is much less than many other growth stocks did.
Shares of Alphabet maintain a strong 96 out of a best-possible 99 Composite Rating, and a Relative Strength Rating of 86. In the afternoon Tuesday, volume weakened, but the stock's relative strength line remained near its all-time high.
Follow Fox on Twitter at @foxonstocks for more market insight and Dow Jones commentary.
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