The Dow Jones Industrial Average rallied after Senate Majority Leader Chuck Schumer made a bullish prediction on the Covid-19 stimulus bill. It was also boosted on comments by Federal Reserve Chairman Jerome Powell. Boeing (BA) was the top blue chip performer, while Apple (AAPL) fell again.
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Among EV stocks, Tesla (TSLA) and Nio (NIO) rallied strongly, while General Motors (GM) also rose. There was also a big move in cyclical stocks, with Mueller Industries (MLI) and Alcoa (AA). Halliburton (HAL) also made a powerful move.
Schumer Bullish On Stimulus, Powell Reassures
House Democrats are aiming to pass their $1.9 trillion coronavirus relief bill Friday. Measures includes a $1,400 direct payment to most Americans, as well as $400 per week jobless benefit supplement.
Schumer has predicted the Senate will approve the bill, and that it will land on the desk of President Biden before March 14. This is despite the fact the Senate is evenly split, with Vice President Kamala Harris acting as a tiebreaker.
“I’ve made a pitch today to our entire caucus and I said that we need to pass this bill, the American people, the American public demands it,” the Democratic majority leader said Tuesday.
Stocks were also boosted after Federal Reserve Chairman Jerome Powell reiterated comments he made Tuesday that inflation and employment remain well below the central bank’s objectives. That means the Fed is likely to continue to buy bonds to bolster the U.S. economy. He also reiterated his intention to maintain ultralow interest rates.
Nasdaq, S&P 500 Rally
The Nasdaq was the worst performing major index, but still rose by around 0.6%. Applied Materials (AMAT) was the top performer, rising more than 4%.
The S&P 500 faring better, rising by around 0.9%. Occidental Petroleum (OXY) was faring best, rising almost 9%.
Volume was lower compared to the same time Tuesday. It fell about 33% on the Nasdaq and by around 21% on the NYSE.
The S&P sectors were having a good day, with most positive. Energy and financials making the best gains.
Small caps were the biggest winners amid the bull charge. The Russell 2000 was up by almost 2%.
Growth stocks were also up, though less noticeably. The Innovator IBD 50 ETF (FFTY) was up around 0.5%. The top performer on the IBD 50 index was MaxLinear (MXL). It gained almost 7%.
Boeing Soars As Dow Jones Rises
The Dow Jones Industrial Average was the top major index, rising around 1.2%. It is well clear of its 50-day moving average.
Boeing stock was the standout performer, rising more than 7%. It is currently building the right side of a 12-week consolidation, according to MarketSmith analysis.
Boeing stock is about 9% away from a 244.18 buy point. But it holds a dreadful IBD Composite Rating of 4 on a scale of 1 to 99. Its EPS Rating rating is its biggest weakness, coming in at worst-possible one out of 99.
Apple stock was among the index laggards. It slipped more than 1%, and lost further ground on its 50-day line. The relative strength line is dipping.
Tesla Stock Strikes Back, Nio Rallies
IBD Leaderboard stock Tesla was rallying strongly, rising about 5%. It comes after the stock managed to regain most of its losses after being down as much as 13% in Tuesday’s session.
It comes after the stock previously flashed a sell signal of its own after slipping below its 50-day moving average. It remains below this key technical benchmark.
Tesla stock still remains well extended from a 466 buy point of a cup with handle.
Its Chinese rival Nio was also having a strong day. It moved toward its 50-day line after rising around 3.5%. A previous breakout from a cup base with a 57.30 buy point failed, and it is now well below this entry point.
GM stock was also up, rising around 1.5%. This saw the stock move away from its 50-day moving average.
It previously broke out from a cup base Jan. 12 on positive EV news. However it has given up ground after a surge, slipping closer to its buy point of 46.81.
These Cyclical Stocks Break Out
There was a move in industrial and cyclical stocks Wednesday, with several passing buy points. Mueller Industries stock broke out of a flat base with a buy point of 39.81.
The relative strength line hit a new high, which is bullish. MLI stock has a Composite Rating of 90, with earnings a key strength.
Alcoa stock emerged from a cup base, passing a buy point of 26.30. The mining stock’s RS line also reached new heights.
Halliburton stock popped through a buy zone after a surging almost 6% The ideal entry point was 20.95. Its RS line is making positive strides.
Halliburton is a SwingTrader stock pick.
Chemical products stock Celanese (CE) is in buy zone after passing a cup base with a proper buy point of 140.19. It has a less than ideal Composite Rating of 71.
Bitcoin Fights Back
Bitcoin fought back Wednesday, briefly climbing back above $51,000 before paring gains. Bitcoin was trading for about $50,000, according to CoinDesk. Bitcoin topped out at $58,332 on Sunday and dived below $45,000 on Tuesday, before recovering.
Grayscale Bitcoin Trust (GBTC) was up more than 7% Wednesday. But this comes after two days of sharp declines.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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