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Stock Market Bounces As This Index Beats The Main Averages

The stock market bounced Tuesday in a broad advance in which small caps spearheaded the attack.

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The Russell 2000 jumped 1.2% at the closing bell, outperforming the major indexes. The small-cap gauge, however, remains below its converged 50-day and 200-day moving averages.

Strength in technology and retail helped the Nasdaq lead the major indexes with a 1.1% increase. The S&P 500 climbed 0.9% and is getting quite close to its 50-day moving average, at about 2872.

The Dow Jones Industrial Average added 0.8%. Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, rose 1.1% also. Indexes closed near session highs, a positive sign.

Volume in Tuesday's stock market fell from Monday's totals, according to early figures. Market gains were broad. Advancers led decliners by an 11-5 ratio on the Nasdaq and by better than 11-to-3 on the NYSE.

Some Relief For Huawei

Wall Street expressed some relief after the Trump administration eased restrictions on Huawei Technologies. Some suppliers and customers of the Chinese telecom now have a 90-day delay on restrictions.


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Semiconductors, one of the industries worst hit by the Huawei news, were one of Tuesday's best performing groups. The VanEck Vectors Semiconductor ETF (SMH) rose 2.3%.

IShares U.S. Aerospace (ITA) was another top-performing sector ETF, up 1.6%. Boeing (BA) shares rose 1.7% after reports that U.S. aviation officials believe a bird strike may have contributed to the crash of an Ethiopian Airlines 737 Max jet.

The defensive consumer staples and utility sectors were weakest, posting minor losses or gains.

The Innovator IBD 50 ETF (FFTY) rose 1.3% as leading stocks also got broad participation in Tuesday's advance. Software and other technology companies were the top performers in the IBD 50.

Some IBD 50 stocks are rising from support at the 50-day moving average, including Progressive (PGR), CDW (CDW), Ulta Beauty (ULTA) and NMI Holdings (NMIH). NMI is the subject of today's IBD 50 Stocks To Watch.

While those charts look attractive, remember that the stock market remains in a correction, and buying stocks is highly risky at the moment.

Juan Carlos Arancibia is the markets editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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