Dow Jones Soars 300 Points; Stock Market Rallies As It Watches For Stimulus Deal

Economy & Business
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2021-01-28

Despite stalled stimulus talks, stocks extended gains midday Monday with the Dow Jones Industrial Average now up 300 points as Apple (AAPL) stock rallies. 

House Speaker Nancy Pelosi said Sunday that coronavirus aid stimulus talks have stalled. She called the White House’s $1.8 trillion proposal “wholly insufficient” in a letter to House Democrats.

The Dow Jones index, which wrapped up September with a 2.3% loss, has climbed back above its 50-day moving average. On Sept. 30, the IBD stock market outlook was upgraded to “confirmed uptrend” from “market in correction.”

Apple gapped up and leapt nearly 5% to move well off its 50-day moving average, ahead of Tuesday’s expected launch of its 5G iPhone. Shares are about 60% extended from a 72.15 buy point of a cup with a handle. They are now working on a new consolidation with a 136.08 entry, according to MarketSmith chart analysis.

Other blue chip winners included Intel (INTC), Microsoft (MSFT), Goldman Sachs (GS) and Walgreens Boots Alliance (WBA), up more than 1.5% apiece. Intel is still 23% off its 52-week high and remains below its 200-day moving average.

Microsoft, which retook its 50-day line on Friday, is working on the right side of a new shallow base with a 232.96 buy point. The software giant is an IBD Leaderboard and IBD Long-Term Leader stock.

Automakers, software and internet stocks led the upside among IBD’s 197 industry groups. But solar, hospital and oil and gas stocks lagged.

Today's Vocabulary

1. analysis (n)
the study of something in detail

2. shallow (adj.)
having only a short distance from the top to the bottom

3. proposal (n) 
a suggestion, sometimes a written one

4. consolidation (n) 
the process of becoming or being made stronger and more certain

5. lagged (v)
to move or make progress so slowly that you are behind other people or things

6. wholly (adv) 
completely

7. stalled (v) 
to delay taking action or avoid giving an answer in order to have more time to make a decision or get an advantage

QUESTIONS
  1. Who is Nancy Pelosi?

  2. How does Nancy Pelosi describe White House’s $1.8 trillion proposal?

  3. When was the IBD stock market outlook upgraded?

  4. At what percentage does Apple leap from its 50- day moving average?
DISCUSSION
  1. Are you interested in stocks and shares? Why?

  2. How risky is it to invest in tech stocks?

  3. Would you prefer to invest in Apple or Amazon?

  4. Do you think you’d be a cautious or adventurous investor?

  5. Who do you think suffers most when stock prices fall?