Dow Jones Rallies After Omicron Stock Market Rout; Moderna, Tesla Rival Surge

The Dow Jones Industrial Average briefly rallied 350 points Monday before cutting gains, as the major stock indexes rebounded from the stock market sell-off on Friday that was fueled by concerns over the newly identified omicron coronavirus variant. Vaccine maker Moderna and Tesla rival Li Auto surged after the open, while electric-vehicle stocks Rivian and Tesla bounced after Friday’s losses.


Among the Dow Jones leaders, Apple (AAPL) traded up over 2% in Monday’s morning action, while Microsoft (MSFT) moved up 1.9% in today’s stock market. Nike (NKE) is back below a recent buy point after another breakout attempt.

Electric-vehicle leader Tesla (TSLA) rallied over 5% Monday. EV peer Rivian (RIVN) rose about 3.5%, while Lucid Motors (LCID) gained 1.8%. Chinese EV leader Li Auto (LI) bolted higher after delivering earnings, while Xpeng Motors (XPEV) raced over 4% higher.

Among the top stocks to buy and watch, Amazon (AMZN), Nucor (NUE), Pioneer Natural Resources (PXD) and Zim Integrated Shipping (ZIM) are near new buy zones. Investors should keep in mind that current market uncertainty is not conducive to new buys.

Microsoft, Nucor and Tesla are IBD Leaderboard stocks. Amazon was featured in last week’s Stocks Near A Buy Zone story. Pioneer was Tuesday’s IBD Stock Of The Day. And Zim was spotlighted in last week’s IPO Leaders story.

Dow Jones Today: Omicron Variant

After the stock market open Monday, the Dow Jones Industrial Average rallied 0.35%, while the S&P 500 moved up 1%. The tech-heavy Nasdaq composite climbed 1.6%.

Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.5% Monday, while the SPDR S&P 500 ETF (SPY) gained 1.3%.

Elsewhere, crude oil prices jumped over 6%, while the 10-year Treasury yield rallied to 1.56%. European markets were also squarely higher. London’s FTSE 100 rallied 1.3%. France’s CAC 40 gained 1.2%, while Germany’s DAX rose 0.8%.

On Sunday, Canada, Australia, the Netherlands and Austria reported their first cases of the omicron variant, the recently identified strain of coronavirus apparently spreading out of South Africa. Other countries, including the U.S., imposed new travel restrictions. Starting Monday, the U.S. banned entry of anyone present in South Africa, Zimbabwe and six other southern African nations over the last two weeks. It remains unclear whether the omicron variant is more deadly or infectious than previous strains.

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Stock Market Rally

The stock market rally faltered Friday, as the major stock indexes sold off sharply on re-emerging Covid-19 fears.

On Friday, The Big Picture commented, “Following news over the Thanksgiving holiday that scientists are monitoring a new, fast-mutating variation of the coronavirus emerging from South Africa, stocks of all stripes gapped down at the open Friday. Judging by the half-day session’s close, the stock market expressed more caution than confidence in the short term.”

For daily stock market commentary, be sure to check out IBD’s The Big Picture.

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Dow Jones Stocks To Buy And Watch: Apple, Nike

Apple ended a nine-day rally with a 3.2% loss on Friday, dropping back into a buy range above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. The 5% buy zone tops out at 160.93. Apple shares rose over 2% Monday.

Dow Jones retail leader Nike is about 4% below its cup base’s 174.48 buy point amid a four-day losing streak. NKE shares rose 1.5% Monday.

Stocks On The Move: Moderna, Pfizer, BioNTech

Vaccine maker Moderna jumped 10% Monday, aiming to add to Friday’s 20.6% surge. Despite the big gain, MRNA shares closed Friday more than 30% off their 52-week high.

Friday’s IBD Stock Of The Day, Pfizer (PFE), rallied about 2% after Monday’s open, set to add to Friday’s breakout past a 51.96 cup-base entry. Partner BioNTech (BNTX) jumped more than 5% in morning trade.

Stocks To Buy And Watch: Amazon, Nucor, Pioneer, Zim

Amazon remains about 7% below its 3,605.55 buy point in a cup with handle, according to IBD MarketSmith chart analysis, following Friday’s 2.1% decline. AMZN shares gained 1.5% in Monday’s early trade.

IBD Leaderboard stock Nucor has been trying to break out past a 119.42 buy point out of a cup-with-handle base, but fell sharply below the entry during Friday’s market rout. Shares closed Friday about 4% below the entry. The steelmaker gained 1.7% Monday.

Tuesday’s IBD Stock Of The Day, Pioneer Natural Resources, continues to build a flat base with a 196.74 buy point despite Friday’s 4.5% loss. Shares on Friday recovered from lows to close narrowly above their key 50-day moving average. The oil producer traded up 4.5% after Monday’s open.

IPO Leader Zim Integrated shares are building a cup-with-handle base with a 60.19 buy point, according to IBD MarketSmith chart analysis. The stock moved up 2.9% Monday.

Join IBD experts as they analyze leading stocks in the current stock market uptrend on IBD Live

EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian

Li Auto dipped 0.7% on Friday, holding in a cup-with-handle base that shows a 34.93 buy point. Ahead of Monday’s open, the company reported strong sales results. Shares surged over 10% in response in morning trade, opening above the entry.

Xpeng Motors is extended past its 48.08 buy point in a choppy cup base following last week’s sharp gains. XPEV shares rose about 4% Monday.

Lucid Motors shares traded up nearly 2% Monday, looking to rebound from Friday’s 1.6% decline. LCID stock remains far extended past a 28.49 buy point in a cup-with-handle base.

Hot initial public offering Rivian rose about 3% Monday following Friday’s 2.4% fall.

RIVN shares closed Friday about 37% off their post-IPO highs. The decline is a potential positive for investors remaining disciplined and waiting for an IPO base to form before considering a purchase. The recent weakness is the start of Rivian’s first base formation, but the last two weeks of price action weren’t very constructive given the sharp losses.

Tesla Stock

Tesla stock rallied over 5% Monday, on pace to bounce after Friday’s 3.05% skid. Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Friday about 13% off its 52-week high.

TSLA shares remain sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730. The chart also showed an alternate entry at 900.50.

Dow Jones Leaders: Microsoft

Among Dow Jones stocks, software giant Microsoft moved up 1.9% Monday, looking to bounce after Friday’s 2.4% decline.

On Oct. 18, Microsoft stock broke out past a flat base’s 305.94 buy point. The 5% buy zone topped out at 321.24, so the stock is extended.

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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By Anisa