Banking

Dow Jones Jumps 350 Points As Stock Market Rallies Ahead Of Fed

Stocks rallied early Wednesday as the Dow Jones Industrial Average led with a 300-point gain, on track to snap a four-day losing streak.




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The Dow Jones industrials rallied 1%, the S&P 500 rose 0.8% and the Nasdaq added 0.6% in the stock market today. Small caps tracked by the Russell 2000 outperformed, up 1.2%. Volume was higher on both major exchanges vs. the same time Tuesday.

Among exchange traded funds, Innovator IBD 50 (FFTY) advanced 0.5%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) edged 0.1% higher.

Property developer China Evergrande Group said it would make an interest payment on an onshore bond. That helped ease some default fears, which fueled Monday’s brutal stock market sell-off on Wall Street and world markets. The company is still expected to miss a separate payment due on its dollar bonds, which are widely held by international investors.

Traders are also watching the Federal Reserve as it wraps up its two-day policy meeting today. Will policymakers agree to start tapering bond purchases, or will they hold off? After the Fed meeting announcement at 2 p.m. ET, Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34261.98 +342.14 +1.01
S&P 500 (0S&P5) 4389.95 +35.76 +0.82
Nasdaq (0NDQC ) 14838.33 +91.93 +0.62
Russell 2000 (IWM) 220.12 +2.60 +1.20
IBD 50 (FFTY) 50.20 +0.25 +0.50
Last Update: 10:18 AM ET 9/22/2021

The U.S. economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. Most states had relaxed restrictions as vaccinations continued to roll out and cases decreased. But cases are rapidly rising again and mask mandates are returning in some states as the delta variant spreads.

Cumulative Covid-19 cases worldwide have topped 230 million, with more than 4.7 million deaths, according to Worldometer. In the U.S., cases have surpassed 43 million with nearly 697,000 deaths.

Growth Stocks To Watch

Adobe (ADBE) lost 4% in heavy trade as it gapped down below its 50-day moving average for the first time since early June. Shares are still extended from a 536.98 consolidation buy point, but the heavy volume breach of support is a sell signal. The stock had also reached the 20% profit goal before the drop, so investors can still lock in some gains.

Late Tuesday, the desktop software maker reported fiscal Q3 earnings and revenue that modestly beat estimates. It earned an adjusted $3.11 a share on sales of $3.94 billion. Analysts expected $3.01 a share on sales of $3.89 billion, according to FactSet. On a year-over-year basis, earnings rose 21% while sales climbed 22%. Adobe also guided higher for the current Q4.

FedEx (FDX) stock gapped down and dived 8% to a new 52-week low in huge volume. It’s now nearly 30% off its late May highs. After the close Tuesday, the package delivery giant reported fiscal Q1 EPS that missed views as costs to tackle pandemic disruptions to labor and supply chains rose. FedEx also lowered its earnings outlook for full-year 2022.

But Stitch Fix (SFIX) gapped up and soared 16%. Late Tuesday, the personalized online shopping platform reported a surprise fiscal Q4 profit. Stitch Fix earned 19 cents a share vs. analyst forecasts for a net loss of 12 cents, according to FactSet. Sales of $571.2 million topped estimates for $547.8 million.

Despite the big gain, shares remain under pressure. Stitch Fix is more than 60% off its 52-week high, while a Relative Strength Rating of 6 means it’s lagging 94% of all other stocks. That contributes to a 24 Composite Rating (out of 99).

Dow Jones Movers

Boeing (BA), up 3%, was one of the biggest gainers on the blue chip index. It’s still stuck below the 50-day and 200-day lines and is about 23% off its 52-week high. Boeing stock isn’t near a buy point.

Chevron (CVX) also gained nearly 3%. The stock is also trading below its 50-day and 200-day lines. It’s about 14% off its 52-week high. Oil stocks got a boost as light sweet crude prices rose nearly 2% to $71.65 a barrel.

JPMorgan (JPM), Goldman Sachs (GS) and Caterpillar (CAT) advanced more than 2% each.

Disney (DIS), up 1.6%, recovered part of Tuesday’s 4% drop. On Tuesday, CEO Bob Chapek said at a Goldman Sachs investor conference its Disney+ streaming service is facing headwinds in the current quarter. He also gave a lower-than-expected outlook for subscriber increases.

Disney stock broke down through its key 50-day support level this week and is about 15% off its 52-week high.

The few blue chip losers included UnitedHealth (UNH), down 1.1%, and Johnson & Johnson (JNJ), which edged less than 0.1% lower.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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