The Dow Jones Industrial Average fell as top lawmakers Mitch McConnell and Nancy Pelosi struggled to iron out differences over a coronavirus stimulus package Friday.
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Electric vehicle leader Tesla (TSLA) hit a record high ahead of its S&P 500 debut, while rival Nio (NIO) also rose. Walt Disney (DIS) was among the leading blue chips, while Cadence Design Systems (CDNS) passed a buy point.
Senate Majority Leader McConnell said “talks remain productive,” even as the midnight deadline approaches. A short-term funding measure could be passed to prevent a government shutdown, but it is thought this may be eschewed in a bid to keep the pressure on to get a deal over the line.
“In fact, I am even more optimistic now than I was last night that a bipartisan, bicameral framework for a major rescue package is very close at hand,” he said on the Senate floor.
Senate Minority Leader Chuck Schumer took a bullish stance on talks, saying “none of the remaining hurdles cannot be overcome.” House Speaker Pelosi has also given indications an agreement is close. The senior Democrat told reporters Thursday that progress had been made, and that she was “waiting to hear back.”
Meantime, Covid-19 cases continue to rise globally. In the U.S., confirmed total coronavirus cases have topped 17.6 million, with a death toll near 318,000, according to Worldometer. Global cumulative coronavirus cases are approaching 75.5 million, with almost 1.7 million deaths.
S&P 500, Nasdaq Struggle
The Nasdaq was the best-performing major index once again. However it fell from Thursday’s record highs, slipping around 0.4%. Biggest losers included Dow Jones stock Intel (INTC), which gave up almost 3%, and coronavirus vaccine play Moderna (MRNA). This was despite that the latter firm received a key endorsement for its Covid vaccine.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30096.67 | -206.70 | -0.68 |
| S&P 500 | (0S&P5) | 3697.95 | -24.53 | -0.66 |
| Nasdaq | (0NDQC ) | 12728.07 | -36.68 | -0.29 |
| Russell 2000 | (IWM) | 197.06 | +0.77 | +0.39 |
| IBD 50 | (FFTY) | 41.56 | +0.08 | +0.19 |
Last Update: 11:44 AM ET 12/18/2020 |
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The broader-based S&P 500 also retreated from record highs as it gave up almost 0.7%. Laggards included Cabot Oil & Gas (COG) and health care stock Cigna (CI).
Volume was up compared to the same time on Thursday. Trading rose more than 130% on the NYSE and by over 11% on the Nasdaq. CAN SLIM investors prefer volume to be lower on a down day.
Small caps were a bright spot. The Russell 2000 small-cap index was up around 0.4%.
It was a rough day for the sectors, with even utilities, which had been the only one having an up day, eventually falling into the red.
Growth stocks were managing to hold up relatively well, with the IBD 50 ETF (FFTY) gaining 0.3%. Top performers in the IBD 50 index included Digital Turbine (APPS), which was up almost 4%, and Builders Firstsource (BLDR).
Disney Stock Among Dow Jones Leaders
The Dow Jones Industrial Average was dragged lower almost 0.7%. It has yet to stage a serious rally attempt today.
Walt Disney stock was among the components managing to make gains, rising by around 0.8%. But Dow Inc. (DOW) was the clear standout performer, rising by almost 1.5%.
The index in general was bleeding red, with Intel the worst performer. But Leaderboard stock Nike (NKE) was also faring badly, giving up more than 2%, with UnitedHealth (UNH) close behind. Nike reports earnings today after the close.
Tesla Stock Up Ahead Of S&P 500 Bow
Tesla (TSLA) was in high demand as funds rush in to buy shares on the last trading day before the automaker’s debut on the S&P 500 on Monday.
The IBD Leaderboard stock was up more than 1%, though it retreated from a record high amid the negative action. It remains extended from a 466 buy point after breaking out of a cup-with-handle base. Tesla still has a best-possible IBD Composite Rating of 99. Tesla stock is up more than 670% so far in 2020.
It was a mixed day in general for electric vehicle stocks. Chinese player Nio pulled further away from its 50-day moving average as it gained almost 3%. It is on track for its fourth up day in a row. It remains well shy of its Nov. 24 high of 57.20.
But Nikola (NKLA) hit reverse gear once again, slipping 1.3%.
CDNS Stock Leads Breakouts
Cadence Design Systems broke out from a flat base, albeit in low volume. The ideal buy point is 127.60. It is pulling away from its 50-day line, which is a bullish indicator. The electronic design automation software maker has a best-possible IBD Composite Rating of 99, with earnings a particular standout.
Cloud security stock Mimecast (MIME) surged above a buy zone after breaking out in high volume. The ideal buy point from its consolidation pattern is 50.81, according to MarketSmith analysis. So shares are extended.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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