April Webinar RegistrationApril Webinar Registration


Nasdaq Makes Record High, Erases Losses From Coronavirus Scare

The stock market closed sharply higher Tuesday, as the Nasdaq composite made a record high and erased all losses from its coronavirus-related slump.

X

Chinese stocks and semiconductors, which often act as proxies for Chinese shares, led the stock market Tuesday. Reuters reported that China's central bank is likely to lower its key lending rate this month, and cut banks' reserve requirement ratios. The steps are seen as ways to combat an economic slowdown caused by the coronavirus outbreak.

WisdomTree ICBCSS S&P China 500 Fund (WCHN) climbed 4.5%, while iShares MSCI China (MCHI) rose 3.8% and reclaimed its 50-day moving average.

Chip ETFs VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) rose more than 3% and gapped back above their 50-day averages. The chip industry is sensitive to the Chinese manufacturing sector.

The Nasdaq — which has more technology and Chinese representation than other major indexes — rallied 2.1%. The composite made a record high Tuesday. The S&P 500 added 1.5% and continued to bounce off a pullback to the 50-day moving average.

The Dow Jones Industrial Average rose 1.4%. Dow component IBM (IBM) followed through on its breakout past a 149.89 buy point from a cup with handle base.

Volume increased on the Nasdaq and NYSE, according to preliminary data. Advancing stocks led declines by a 5-to-2 ration on the Nasdaq and by 19-to-7 on the NYSE.

Innovator IBD 50 ETF (FFTY) gapped up and ended with a gain of more than 2%. Lumentum (LITE) led the IBD 50 with a 12% surge thanks to quarterly results that beat expectations and a bullish outlook. It was a remarkable day for the IBD 50, with nearly half the stock up more than 3%.

PayPal (PYPL) broke out past the 119.70 buy point of a cup with handle base. But shares closed barely above the entry, and volume was well below average. With a relative strength line lagging, there were reason to consider this a poor breakout. PayPal is on the IBD Leaderboard watchlist.

CyberArk (CYBR) and Floor & Decor (FND) saw similarly weak breakouts.

MercadoLibre (MELI) rose past the 697.32 buy point of a cup with handle. But volume was flat for the Latin America e-commerce leader. The company said it will announce earnings Feb. 10 after the close.

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

YOU MIGHT ALSO LIKE:

After Hours: 3 Key Earnings Movers As Tesla Keeps Running

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

How Trading ETFs Offers Ways To Invest In Sectors Lacking Leading Stocks

IBD Live: Learn And Analyze Growth Stocks With The Pros

MarketSmith's Tools Can Help The Individual Investor