Stock Market: Dow Soars 600 Points; Nasdaq Moves Higher Despite AstraZeneca Coronavirus Vaccine News
Stock Market Rally
The Dow Jones Industrial Average is erasing some of its losses after an intense selloff experienced on Wall Street yesterday. The Nasdaq Composite, a tech-savvy index, plunged 4.77% yesterday.
Tesla’s TSLA stock took most of the beating, with its share price plunging 21%, the biggest one-day loss in Tesla’s trading history. The S&P 500 stock index continued its losses yesterday and fell 2.78%. The Dow declined 632 points yesterday, moving the index lower by 2.25%.
Coronavirus Potential Vaccine Trial Halts
Traders are concerned that AstraZeneca’s coronavirus vaccine trial has been halted because one person involved in the trial has become ill. The patient is expected to leave the hospital today. According to FT, the trial may resume next week.
The fear is that if we hear similar news from other pharma companies that are holding coronavirus vaccine trails, then it means we may not see a coronavirus vaccine as early as anticipated.
Global Stock Market Today
Stocks in Asia took a heavy beating today. The Shanghai index declined by 1.86%. The HSI stock index also moved lower by 0.63%, while the Korean Kospi fell 1.09%. The Japanese Nikkei Index declined by 1.04%.
Dow Index and S&P 500 Index: Market Breadth
The U.S. stock market’s breadth experienced some serious weakness yesterday. Nineteen of the Dow Jones stocks traded above their 200-day moving average, three fewer than the previous day.
Four stocks of the Dow Jones Index increased in value, and 26 shares of the Dow index moved lower. Disney DIS stock advanced higher by 1.67% and was the biggest gainer for the Dow, while Salesforce CRM stock dropped 5.27%, the biggest drag for the Dow Jones industrial average index.
The S&P 500 stock breadth also confirmed that bulls lost more ground yesterday. 57% of the shares traded above their 200-day moving average. This represents a change of -4% from a day earlier.
The information technology sector led the index lower, and all 11 sectors closed lower.
General Motors GM stock contributed the most significant gain, soaring 7.93%. Apache stock was the most considerable drag for the index; it fell by 10.7%. The S&P 500 stock index is up 7.5% during this quarter.
Dow Jones and S&P 500 Today
The Dow is trading higher by nearly 500 points. Earlier today, futures were trading in negative territory. However, bargain hunters have finally stepped in and pushed the Dow higher. Investors are hoping that the U.S. stock market will bounce after the heavy selloff that we have seen over the past few days.
The Dow Jones futures have broken below the 50, 100 and 200-day simple moving average (SMA) on a 4-hour time frame. The Dow’s price really needs to move back above the 200-day SMA; otherwise, it is highly likely that we may continue to see more pain for the index.
As for the daily time frame, the Dow Jones Industrial Average Index’s price is in a battle with the 50-day SMA, a critical price level. A bounce from here will confirm that bulls are still in control of the price; however, if the price stays below this average, the bulls are likely to lose control.
The chart below shows the Dow Jones’s price chart on the left side and the S&P 500 price chart on the right side.
The S&P 500, the broader representation of the U.S. equity market, is firmly trading above the 200-day SMA on a daily time frame as shown in the chart above. The index has bounced from its 50-day SMA, which is a bullish sign.