The major stock indexes rebounded Wednesday afternoon, as positive commentary from Fed Chairman Jerome Powell offset China trade concerns. Among the Dow Jones stocks, Disney (DIS) broke out.
XThe company announced its new streaming service, Disney+, has already hit 10 million sign-ups since launching on Tuesday. Tesla (TSLA) jumped nearly 2% at the stock market open after announcing a new gigafactory in Germany but reversed lower.
Dow Jones Moves Higher As Powell Testifies
China-trade stumbling blocks emerged around midday, causing stocks to dip for a while. China is balking at committing to specific amounts of agricultural purchases, the Wall Street Journal reported.
But stocks climbed earlier as Powell spoke in front of the Congressional Joint Economic Committee. He said current monetary policy is likely to remain in place, lowering the odds of a further rate cut this year.
Stocks rallied on the news, as Powell's testimony suggested the Fed sees sustained expansion of economic activity, a strong labor market, and inflation near the 2% objective.
The Dow Jones Industrial Average advanced 0.3%, while the S&P 500 was up less than 0.1%. The Nasdaq was barely negative. Volume was mixed, tracking lower on the NYSE but higher on the Nasdaq vs. the same time Tuesday, according to unconfirmed data.
Disney Stock Breaks Out, Tesla In Buy Range
Disney announced that the Disney+ streaming service has signed up more than 10 million users since its Nov. 12 launch. This outpaced Wall Street expectations for 8 million subscribers by year-end. Disney's stock was up more than 7% on the news, while rival Netflix (NFLX) shares were down 3%.
Disney stock surpassed a 147.25 buy point. The stock could also be interpreted as breaking out of a double-bottom base with a buy point at 140.18, but the stock is now out of the 5% buy zone from that entry. The double-bottom base is not very symmetrical, but the breakout seems to be supported by strong price and volume action. The stock was added to IBD SwingTrader and Leaderboard on Wednesday.
Electric-auto maker Tesla late Tuesday announced a new gigafactory in Germany. The factory will be the first Tesla manufacturing facility in Europe. The stock rose nearly 2% on the news before reversing lower. It remains in a 5% buy zone. Earlier this week, Tesla stock rose above a 340.94 buy point off a cup with handle. The 5% buy zone tops out at 357.99.
Software Stocks, Gold Miners Lead The Stock Market Today
Among IBD's 197 industry groups, those leading today's gains include gold miners, enterprise software firms and automakers.
The VanEck Vectors Gold Miners (GDX) rose 0.6%, though the ETF has stayed below the 50-day line since late September. IBD 50 stock Kirkland Lake Gold (KL) rose 2.6% and is nearing a potential 51.18 buy point. The base is late stage, however.
Software IPOs gained some early attention this morning, as Datadog (DDOG) vaulted nearly 17% in strong volume. The developer of cloud-based data analytics and IBD's Stock Of The Day announced third-quarter results that beat expectations. The company's revenue soared 88% year over year to $95.9 million, well past estimates for $84.7 million. Datadog broke even vs. views for a 14-cent loss.
The stock is slightly extended from a 38.07 buy point of a double-bottom base. But it could also offer a higher buy point at 41.54, off the prior high.
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