The Dow Jones Industrial Average rallied, with Apple (AAPL) and UnitedHealth (UNH) being top performers. Tesla (TSLA) spiked as CEO Elon Musk confirmed layoffs and issued a warning. Bitcoin bounced back above the $20,000 level following last week’s meltdown.
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There was no breakout activity following challenging recent action. But Dollar General (DG) is worth watching after it bullishly pushed toward a buy point.
Volume was higher on both the Nasdaq and the New York Stock Exchange vs. the same time Friday. This is not comparable though due to quadruple witching.
Meanwhile, the yield on the benchmark 10-year Treasury note rose seven basis points to 3.31%. West Texas Intermediate crude rose more than 1% to trade at nearly $111 per barrel.
Nasdaq Jumps As Growth Stocks Surge
The Nasdaq was fighting back gamely after last week’s spanking. The tech-heavy index gained almost 3%. Lucid Motors (LCID) was a top performer as it surged nearly 10%.
The S&P 500 was also in rally mode, rising by almost the same amount as the Nasdaq. Diamondback Energy (FANG) was a standout here as it gained nearly 8%.
The S&P 500 sectors were all positive. Energy and technology were among the best-performing areas.
Small caps also gave the bears a bloody nose. The Russell 2000 popped almost 2%.
Growth stocks also impressed, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, up more than 3%.
Dow Jones Today: Apple Stock Pops
The Dow Jones Industrial Average was also having a strong session as it surged more than 700 points, or 2.4%. It is back above the key 30,000 level.
Apple stock was one of the best performers, rising 3.5%. Nevertheless, painful recent action means it remains rooted below its 50-day moving average, according to MarketSmith analysis.
But it was UnitedHealth that was turning in the best gain on the Dow Jones today. It rose more than 7%.
Tesla Stock Surges As Elon Musk Confirms This Move
Tesla stock was soaring after CEO Elon Musk confirmed the carmaker is looking to cut 10% of its workforce Tuesday.
“Tesla is reducing its salaried workforce by roughly 10% over the next probably three months or so,” the eccentric executive said at a Bloomberg event.
While he still expects his company’s hourly workforce to grow, he said the firm had grown “a little too fast in some areas.”
The news bolstered TSLA stock, which pulled away from the lows of its current consolidation. It was a top performer on both the Nasdaq and S&P 500.
Nevertheless, it remains a far way from a potential entry of 1,208.10, MarketSmith analysis shows. The former Leaderboard stock sits about 10% below its 50-day moving average.
Musk also said that a recession “is inevitable at some point.”
“As to whether there is a recession in the near term, that is more likely than not,” he added.
Musk also gave an update on his mooted takeover of Twitter (TWTR). He highlighted three “unresolved matters” that need to be addressed: fake accounts, securing debt financing and getting shareholder approval.
Twitter stock was up about 2% Tuesday afternoon.
Bitcoin Bounces After Shellacking
Bitcoin was rallying following a severe sell-off. Whether this was just a dead cat bounce remains to be seen.
It was trading for just over $21,000 as it gained nearly 6% in the past 24 hours, according to CoinDesk.
The cryptocurrency has been rocked as investors fled to the exits as they shed risky assets from their portfolios.
“Surging borrowing costs, margin calls, and excessive leveraged speculation helped accelerate the selling pressure over the past two weeks,” Oanda senior market analyst Edward Moya said in a note to clients. “The entire cryptocurrency market is seeing some buyers emerge as the selling pressure may have been overdone.”
Bitcoin plays such as Riot Blockchain (RIOT) and Coinbase Global (COIN) popped. Bitcoin miner RIOT rocketed nearly 12%, while cryptocurrency exchange COIN rose almost 13%.
Both stocks remain miles off their all-time highs, though. Both are also stuck beneath their major moving averages.
The Grayscale Bitcoin Trust (GBTC) was also in rally mode, jumping nearly 11%.
Outside Dow Jones: Dollar General Surges Toward Entry
With the market still in the grip of a correction, investors should be seeking watchlist candidates.
Dollar General is a good candidate as it surged toward a cup-with-handle base with a buy point of 240.07 on Tuesday.
The RS line is looking strong in recent weeks and has just hit fresh heights.
Shares of the discount retailer are now pulling away from the key 50-day moving average. DG stock fell 1.1% to 230.80 last week but is now looking strong.
With recession looming, even Dollar General shoppers are having to tighten their belts. U.S. consumers, the backbone of economic growth, are not as optimistic these days as they usually are.
Dollar General has struggled to top the sales and earnings growth rates it posted during the pandemic. Nevertheless, the company boosted its outlook for the year in its latest quarterly report as shoppers continue to look for deals to mitigate inflation pain.
DG stock sites near the summit of the Retail-Discount & Variety industry group. Dollar Tree (DLTR) and BJs Wholesale (BJ) are also among the group’s highest-rated stocks.
Dollar General got some airtime toward the end of Tuesday’s IBD Live show on Zoom.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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