The stock market recovery from the effects of coronavirus continued Thursday after China said it would cut in half tariffs on $75 billion of U.S. goods, signaling its intent to adhere to the recently signed U.S.-China trade deal. Twitter (TWTR) surged on bullish user data, while Boeing (BA) stock soared in the Dow after the FAA announced that Boeing 737 Max jet certification flights would begin within weeks.
XAfter closing below its 50-day moving average last Friday and again on Monday, the Dow Jones Industrial Average continued its powerful comeback, rising 0.3% to an all-time high. The Nasdaq also maintained its strong momentum, gaining 0.7%. The S&P 500, meanwhile, added 0.3%. Only the small-cap Russell 2000 Index slipped into the red, falling 0.3%.
Despite the bullish moves, volume on the NYSE and Nasdaq was lower than Wednesday, according to preliminary data.
Twitter gapped up 15.1%, despite an earnings miss. Wall Street analysts expected EPS of 28 cents a share, but the company reported 25 cents, down 19% from a year earlier. Investors largely ignored the earnings miss and focused instead on Twitter's "average monetizable daily active users," a gauge of its active customer base. It came in at 152 million, compared to forecasts of 148 million.
Twitter stock has struggled since gapping down 21% on October 24, after a major earnings disappointment. Thursday's gain brings Twitter stock back to its level before that major drop.
Good News For Boeing
Boeing rose 3.6% after the Federal Aviation Administration said that international regulators were close to agreement on the fixes needed for Boeing's troubled 737 Max jet. That plane, used by dozens of airlines around the world, was grounded last year after two deadly crashes, which were attributed to plane defects. FAA Administrator Steve Dickson said test flights would begin within weeks, though it's not clear when the plane might be cleared to carry passengers.
After two straight daily rises, Boeing stock recaptured its 200-day moving average line, but still remains well below its 50-day line.
Tesla (TSLA) stock rose 1.9%, one day after plummeting 17.2% following remarks by a Tesla executive that deliveries of its Chinese-made Model 3 electric cars would be delayed by the coronavirus outbreak in Wuhan. The stock broke out of a nearly yearlong cup with handle pattern with a 361.30 buy point in mid-December. It's now more than 100% extended from its entry point in just over a month and a half.
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Stock Market: Chinese Names Continue Strong
Among the IBD 50 list of top growth stocks, Chinese delivery and logistics company ZTO Express (ZTO) leapt 3.7%. The company's in-place Chinese delivery service has risen as quarantines have been put in place around the country to contain the deadly coronavirus's spread. ZTO stock is in a buy zone from a cup base with a 22.66 entry. ZTO has a 96 Composite Rating from IBD, and ranks No. 1 in its industry group.
Other Chinese names continued to move up, including New Oriental Education (EDU), up 1.8%. It's now about 16% extended above a 115.98 buy point from a rare ascending base.
After being up for most of the morning, Chinese online retailing behemoth Alibaba (BABA) closed up 0.3%. With a 95 Composite Rating, the stock is now about 12% above its previous 195.82 buy point from a cup with handle. The stock has repeatedly tested the 50-day moving average this year, but repeatedly moved higher, as it has recently.
Paycom Earnings Disappoint
Of note, IBD 50 name Paycom (PAYC) plunged 9.9% after an earnings miss. The stock has fallen 14% in two days. It was extended, but has now returned to a buy zone over a flat base with a 280.05 buy point.
Leidos Holdings (LDOS) jumped 3.1%. Leidos provides scientific consulting on national security, health and engineering problems. The stock broke out of a cup with handle in late November, but is now about 25% extended.
Among exchange traded funds, the Innovator IBD 50 ETF (FFTY) fell 0.2%.
Meanwhile, on IBD's Big Cap 20 list, drugmaker Regeneron (REGN) jumped 4.8% after handily beating Wall Street views with its Q4 results. It posted EPS of $7.50 a share and revenue of $2.17 billion, vs. expectations of $6.03 a share and revenue of $2.1 billion. Thursday's jump puts Regeneron stock into a buy zone above a cup-with-handle base and a 382.35 buy point.
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