Stocks opened to tight gains Tuesday, in a mild bounce back from Monday's mixed finish. Investors looked toward a Senate a $1.2 trillion infrastructure spending vote scheduled late this morning. BioNTech reversed sharply lower, despite an analyst price target hike. Kansas City Southern rallied as bidding by Canadian suitors escalated. Meanwhile, Walmart muscled higher above a buy point on the Dow Jones today.
The Dow Jones Industrial Average gained 0.2%. The S&P 500 rose nearly 0.2%, and the Nasdaq Composite rose 0.1%. The hotly debated $1.2 trillion Infrastructure Investment and Jobs Act cleared final procedural hurdles Tuesday. Senate Majority Leader Chuck Schumer scheduled a final Senate vote for 11 a.m. ET.
IBD Leaderboard listing MercadoLibre led the Nasdaq 100, surging 3.7% after its earnings-fueled breakout on Thursday. DocuSign and Zoom Video traded high in the Nasdaq mix. And rebounding China-based names, led by Pinduoduo and JD.com also provided early support.
On the S&P 500, railroad Kansas City Southern popped 7.4%. The Wall Street Journal reported plans by Canadian Pacific Railway to increase its previous $25 billion bid for the Missouri-based company. A subsequent deal with Canadian National Railway had bid $30 billion for KSU.
At the bottom of the S&P 500, SVB Financial Group traded down more than 3% after announcing follow-on stock offering late Monday. IBD 50 stock Moderna dropped 2.6% in opening trade.
Tesla dropped 1.2% on the Nasdaq in early action, after China released official numbers on July electrical vehicle sales. The IBD Leaderboard stock is narrowly above an aggressive buy point formed inside its correction.
Vaccine maker BioNTech reversed early gains and dived 3.5%. JPMorgan boosted the stock's price target to 153, from 137 following the German-based company's second-quarter results on Monday. BioNTech, an IBD Leaderboard stock, has been flashing climax run signals.
Dow Jones Today: Walmart Eyes Strong 2H
Walmart ran at the head of the Dow Jones today, up 1.3%. Shares were boosted by a Bank of America report urging investors to buy the stock ahead of a series of projected positives for the retail giant in the second half of the year.
The note cited "potential Q3 upside from back-to-school sales, return of traffic to vision and auto centers, and continued grocery market share gains as higher-margin in-store categories like Deli and Bakery come back in a 'big way,'" according to investors information site, The Fly.
Walmart stock staged a seven-week rally through Friday, topping a 144.68 entry in a 10-week flat base within a larger consolidation. Shares remain in a buy range through 151.91.
Earnings News: Kornit, Sysco, 3D Systems
Among the biggest earnings-driven moves Tuesday, Arcturus Therapeutics Holdings sailed 25% higher after a mixed second-quarter report late Monday. 3D Systems rallied almost 28% following its above-forecast results. Halozyme Therapeutics pared its early gain to 3%, AMC Entertainment jumped almost 8% after reporting what management called a "transformational" quarter. Organogenesis Holdings scaled up more than 6%.
Kornit Digital opened down 1% after the company released results and announced an acquisition. Restaurant supplies vendor Sysco also reported, rallying 4.5% after turning in a strong fiscal fourth quarter and boosting guidance.
Vital Signs: Oil, Bond Yields, Bitcoin
Crude oil prices bounced, with West Texas Intermediate futures up 1.4% and nearing $67.50 a barrel. WTI prices dropped 4.5% intraday on Monday, rebounding after a test of recent lows from July. Oil prices are up 38.5% since the start of the year.
The 10-year Treasury yield traded up to 1.33%, after settling just below 1.32% on Tuesday. A five-day advance through Monday marked the longest rally in yields since March, after a rebound last week snapped a string of 10 losses in 11 recent weeks.
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Bitcoin traded around $45,500, after swinging as high as $46,691 and as low as $44,803 over the past 24 hours, according to Coindesk. The cryptocurrency pulled back from recent peaks amid the failure of a measure included in the infrastructure spending package that would have limited federal oversight of some aspects of cryptocurrency trading. Bitcoin touched a high above $64,829 in mid-April.
China's Markets Bounce, Europe Mixed
China's markets extended their rebound, as investors swept in to buy up beaten down names, with tech issues leading the bounce. Hong Kong's Hang Seng Index rallied 1.2% and the Shanghai Composite posted a second straight 1% advance. In Japan, Tokyo's Nikkei 225 added 0.2%.
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Among China gauges in the U.S. early Tuesday, the iShares MSCI China ETF (MCHI) climbed 0.9%, and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) advanced 0.9%. Technology tracker KraneShares CSI China Internet ETF (KWEB) jumped 1.7% in early trade.
Europe's markets improved in afternoon trade. The CAC-40 in Paris traded 0.1% higher. Frankfurt's DAX moved up 0.25%. London's FTSE 100 shed its early losses and rose a fraction. The SPDR Portfolio Europe ETF (SPEU) rose 0.1% in early trade, after falling 0.1% on Monday. The ETF is up 0.8% in August, has a year-to-date gain of 14.3%, and is trading just below a 44.06 buy point in an eight-week flat base.
5 Stocks To Watch: Celsius, Wesco, MercadoLibre, Apple, Snap
IBD 50 stock Celsius Holdings reports second-quarter numbers before the market opens on Thursday. The fitness drink maker remains a fraction below a 76.90 entry in a double-bottom base. The chart shows a third-stage pattern, which means its gain from a new breakout may be smaller than in prior breakouts.
Wesco International (WCC) on Friday topped the 113.20 buy point of a flat base after the diversified manufacturer, spun out from Westinghouse Electric in 1994, beat profit estimates late Thursday. It remained narrowly above the buy point, in a buy range and a stock to watch on Tuesday.
Apple remains in a buy zone on the Dow Jones today, after clearing a 145.19 buy point in July. Monday's IBD Stock of the Day, it remains in the buy zone through 152.45.
MercadoLibre climbed 3.5% early Tuesday. The stock is above a 1,755.05 buy point following Thursday's nearly 14% surge. The stock's gap up at the open set the conditions for a breakaway gap buying opportunity. The first five minutes of trading notched a high of 1,755.05, setting the buy point. The buy extends to 1,842.80.
Snapchat owner Snap slipped 1.8% early Tuesday. The stock is trading low in the 5% buy zone past a 73.69 buy point in a consolidation. The 5% buy area tops out at 77.37.
Nasdaq. S&P 500, Dow Jones Today
A modestly mixed session Monday gave the Dow and S&P 500 a break after rattling off new record highs on Friday.
The Nasdaq is riding comfortably above its short-term 21-day moving average, and less than 1% away from cracking the 15,000 barrier. The S&P 500 is also firmly above its 21-day line, just a breath away from new highs and less than 2% from its first move above 4,500.
The chart for the Dow Jones today looks more flattish than that of its peers. The Dow is trading above its 21-day line, in easy striking distance of new highs and holding above the 35,000 mark. But it is still only fractionally above its first move past the 35,000 level in early May.
For more detailed analysis of the current stock market and its status, study the Big Picture.
In that same stretch of time, the Nasdaq has gained 10.1% and the S&P 500 has a 5.8% gain. Still, a number of blue chips are behaving well. Goldman Sachs and Walmart are breaking out. Home Depot, Salesforce.com and Apple are among those trading just below buy points.
Monday's Big Picture article cautioned investors to keep an eye on the market's distribution day count. This tracks selling trends among institutional investors, a precursor to market pullbacks and downturns. The current count stands at an elevated seven days for the S&P 500, five days on the Nasdaq.
It is a caution sign to be aware of, not a danger signal. And the market's overall status remains in 'Confirmed Uptrend.'
Find Alan R. Elliott on Twitter @IBD_Aelliott
