The Dow Jones Industrial Average held the bulk of its 500-point jump in afternoon trades Tuesday amid talk from a Federal Reserve official about a sharp drop in inflation. Other indexes surged as well, prompting 30 stocks to stage breakouts, including e-commerce giant Amazon.com.
At a speech in Detroit, Chicago Fed President Austan Goolsbee observed that inflation may fall at its fastest pace in 40 years. Easing supply-chain constraints and increased productivity could help inflationary trends point downward. The Fed official also said that in 2023, the economy may beat its 1982 record of a 4% drop in the consumer price index.
Meanwhile, the CPI showed inflation remained unchanged during October when compared with September, as per Econoday. On an annual basis, it cooled off to 3.2% after September's 3.7%, moving closer to the Fed's goal of 2%.
Economists had predicted monthly inflation of 0.1% and 3.3% on an annualized basis. Core inflation, excluding food and energy, also ticked lower to a monthly increase of 0.2% and annual increase of 4%. Both were down from September and below economist views of 0.3% and 4.1%.
Indexes Soar On Higher Volume
It all helped Dow Jones stocks to a 1.4% gain, while the S&P 500 surged nearly 2% on the stock market today. The Nasdaq soared more than 2% as the tech-heavy index got a lift via rallies among the so-called Magnificent Seven stocks. And the small cap Russell 2000 outdid them all, soaring 4.9% in recent action.
At the same time, volume on the New York Stock Exchange jumped by nearly 52% compared with Monday's action. Nasdaq exchange volume jumped nearly 20%. On the NYSE, advancers outnumbered decliners by 10-to-1 while on the Nasdaq that ratio was 4-to-1.
The Innovator IBD 50 exchange traded fund climbed 2% and gapped up to its 50-day moving average. And the yield on the benchmark 10-year Treasury note dropped off sharply by 16 basis points to 4.46%
Amazon Among 30 Stocks Breaking Out
IBD's MarketSmith showed that 30 stocks were breaking out into buy zones by Tuesday afternoon. Among them was Amazon, which edged into a buy zone from a consolidation and an entry of 145.86. Shares were just above the buy point in recent action. The e-commerce leader is on track to close at a record $1.5 trillion in valuation, last seen in April 2022.
Leading the way, however, were two homebuilders, Toll Brothers and Pulte Group. Toll was up more than 8% while Pulte gained more than 7%. Toll Brothers surged past a buy point of 82.39, from a cup with handle. Pulte also broke out of a cup with handle, and its buy point was 84.25.
Investment asset management firm KKR gapped up and broke out of consolidation at a buy point of 64.77. The stock shows its relative strength line at new highs.
Among health care stocks, Ensign has broken out of a symmetrical cup base with a buy point of 104.04.
Also making strong moves were two heating and air-conditioning providers, Limbach Holdings and Comfort Systems USA. Limbach bounded more than 7%, stretching into a buy zone with an entry of 37.71. Comfort was up more than 5%, rising above a buy point of 191.27 with its relative strength line at a new high.
Financial software maker Guidewire Software climbed more than 4%, breaking out of a flat base with a buy point of 95.88. And MercadoLibre, a stock on the IBD 50, also made a strong move of 3.5%, enough to push it well past a buy point of 1,398.59.
Dow Jones Stocks
Among Dow Jones stocks, Home Depot held most of its gains after results. Same-store sales fell for the fourth straight quarter, but the hardware and home construction parts supplier reported declines in revenue and earnings that were better than estimates. Shares gapped up above the 50-day moving average and were clearing the 200-day line.
Health care names lagged on the Dow, however. United Health, Johnson & Johnson and Merck fell in the afternoon.
Dow component Apple joined other Magnificent Seven stocks in a rally, up 1% in recent action.
Also among the Magnificent Seven, Tesla jumped more than 5% on reports that the company raised prices for its Model Y and Model 3 cars by 2,500 yuan and 1,500 yuan respectively. China sales fell 34.2% in October, however. China vehicle insurance registrations, an indicator of sales, fell nearly 10% for the week ended Nov. 12. TSLA stock is approaching its 50-day moving average.
Also in that group, Meta rose amid news of a new partnership with Amazon. Users of Facebook and Instagram will now be able to link their accounts to Amazon accounts. Meta is in a buy zone with an entry of 326.20.
Outside Dow Jones: The Earnings Movers
Among earnings movers, On Holding pared some losses but remained below the 50-day line even after topping Wall Street estimates. Electric-vehicle play Fisker dived 20% after its report. Computer software company Cellebrite pared some gains after it reported earnings of 5 cents per share, a reversal from a loss of 1 cent in the prior-year quarter. Shares are near a buy point of 8.29.
Solar power player Beem Global added to early gains and rose more than 15% on earnings. Sales increased 149% from the prior year. And a net loss of 26 cents per share showed an improvement from a loss of 67 cents over the same period. The stock is retaking the 50-day line.
Also outside Dow Jones stocks, used-car seller Carvana surged more than 15% after reports said that it had started offering same-day delivery to some customers in Atlanta.
Finally, information-technology player Super Micro Computer rebounded from its 50-day line as the company announced its participation in several investor conferences in late November and early December.
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