Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were lower Tuesday following Monday’s stock market surge. Tesla rebounded Monday, while Zoom stock soared on earnings. Nio earnings missed estimates, sparking a sharp fall.
On Monday, the tech-heavy Nasdaq composite jumped 3%, its best day since Nov. 4. The S&P 500 moved up 2.4%, while the Dow Jones Industrial Average traded up 1.95%.
Tesla (TSLA) raced more than 6% higher Monday, snapping a two-day slide.
After the stock market close Monday, Zoom Video (ZM) reported strong quarterly earnings results. Zoom stock surged 10% in extended trade. Meanwhile, Chinese EV leader Nio (NIO) missed earnings estimates late Monday.
Microsoft, Target and Tesla are IBD Leaderboard stocks. RH was Friday’s IBD Stock Of The Day.
Dow Jones Futures Today
Ahead of the stock market open Tuesday, Dow Jones futures and S&P 500 futures fell about 0.35% each vs. fair value. Nasdaq 100 futures lost 0.3% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
U.S. Stock Market Today Overview
Last Update: 5:24 PM ET 3/1/2021
On Saturday, the House passed the $1.9 trillion stimulus plan, including $1,400 stimulus checks for many Americans.
Stock Market Pullback Finds Support
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of March has the Dow Jones Industrial Average, Nasdaq and S&P 500 pulling back from record highs.
Last Thursday, the stock market’s heavy losses marked a character shift for the stock market, and so IBD’s market outlook was downgraded to “Uptrend under pressure.”
But Monday’s big gains are a clear step in the right direction. The Nasdaq reclaimed its key 50-day line, while the S&P 500 and Dow Jones industrials also found support around their 50-day lines. If this rebound continues, look for more top stocks breaking out past correct buy points in heavy volume.
According to Monday’s Big Picture, “Judging by Monday’s action, one could certainly venture that equities still remain an attractive option for global investors. The market also reminded IBD readers for a second straight day that another market — specifically, long-dated U.S. Treasury bonds — still matters greatly.”
Amid the stock market pullback, investors should play more defense than offense. Avoid new breakouts, unless they’re exceptional, and make sure to sell any stock that falls more than 7% below your purchase price. Remember, you don’t have to wait for the 7%-8% loss if the stock is clearly not acting well.
Focus on stocks that show strong relative strength during the current weakness. They could be some of the market’s leaders if the indexes are able to continue their rebounds.
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Bitcoin rebounded Monday, briefly rallying back above $49,500 before paring gains. The price of Bitcoin traded around $48,600 in evening trade, according to CoinDesk.
The price of Bitcoin hit an all-time high on Feb. 21, topping out at $58,332.
The Grayscale Bitcoin Trust (GBTC) ETF tumbled 23.8% last week, but still held above its 10-week support level. The Bitcoin-tracking ETF jumped 6.1% Monday.
Dow Jones Stocks: Visa
Inside the Dow Jones Industrial Average, Visa stock is in buy range past a 211.69 buy point in a cup with handle, according to IBD MarketSmith chart analysis. The 5% buy zone goes up to 222.27.
Shares rose 2% Monday, and are squarely in buy range. The stock ended a two-day losing streak.
Stocks To Watch: RH, Target
Friday’s IBD Stock Of The Day, RH, is closing in on a 524.11 buy point in a flat base. Shares rallied 3.2% Monday.
IBD Leaderboard stock Target is tracing a flat base with a 200.06 buy point, according to IBD MarketSmith chart analysis. Target moved up 1.4% Monday and is about 7% away from the new entry.
Per Leaderboard commentary, “Target is forming a flat base as it tests support at the 50-day moving average. The company reports Q4 results on Tuesday.”
Chinese EV leader Nio reported a per-share loss of 14 cents on revenue of $1.02 billion, missing Q4 estimates on the bottom line but edging past top line forecasts.
Nio was expected to narrow its net loss to 7 cents per ADS from 39 cents a year ago as revenue soars 148% to $1.01 billion.
The company had already disclosed that Q4 2020 deliveries leapt 111% to 17,353 vehicles, growing for the third straight quarter after the pandemic hit in early 2020.
Nio ended Monday more than 25% off its 52-week high following last week’s 16.8% tumble. Shares rallied 8.7% Monday.
The Tesla rival triggered a sell signal from a 57.30 buy point when it fell more than 7% below the entry on Feb. 18.
Late Monday, Nio stock tumbled over 6% in overnight trade.
Zoom earnings soared to $1.22 per share on an adjusted basis, while revenue surged to $882.5 million. Meanwhile, the company issued bullish Q1 and fiscal 2022 outlooks.
The company was expected to earn 79 cents per share on sales of $811.7 million, year-over-year increases of 427% and 331%, respectively.
Zoom stock found support around its long-term 200-day line Monday, closing about 30% off its 52-week high.
Outside of Dow Jones futures, Zoom shares surged about 9% to around 444 a share and are moving up the right side of a new base.
Tesla stock raced more than 6% higher Monday, snapping a two-day losing streak. Shares could be forming a new base, but it’s too early to identify a new entry.
Last week, the electric-auto leader broke down through its key 10-week moving average line, a critical support level.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle. Shares are about 25% off that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple advanced 5.4% Monday. Apple stock remains below its 10-week line, but a strong rebound back above the level would be bullish for the stock’s prospects.
On Feb. 18, Apple stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, Microsoft rose nearly 2% Monday. The stock found support at its 232.96 buy point, and is back in buy range.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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