Dow Jones Extends Gains As This Key Stock Leads; Tesla, Paychex Rally On Nasdaq

Key market indexes rose early Wednesday with the Dow Jones Industrial Average up nearly 100 points to extend its Tuesday rally.

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The Dow Jones industrials, S&P 500 and Nasdaq were up about 0.3% each in the stock market today. Small caps tracked by the Russell 2000 lagged slightly, up 0.1%. Volume was mixed, lower on the NYSE and higher on the Nasdaq, vs. the same time Tuesday.

Among exchange traded funds on Thursday, Innovator IBD 50 (FFTY) climbed 0.2%. The iShares Russell 1000 Growth ETF (IWF) edged 0.1% higher, while Invesco QQQ Trust (QQQ) gave up 0.1%.

Early Friday, the Commerce Department revised its Q3 GDP estimate higher to 2.3% and personal consumption expenditures up to 2%. Economists expected 2.1% GDP growth and a 1.7% increase in personal consumption expenditures, according to Econoday.

The U.S. economy has been struggling to recover from the Covid-19 pandemic, which triggered nationwide lockdowns more than a year and a half ago. A resurgence in cases fueled by the more contagious delta variant had been slowing as vaccinations rise.

But a new coronavirus variant with a large number of mutations is raising concerns. Though much is still unknown about the omicron variant, currently available vaccinations and boosters may offer some protection against the highly transmissible virus.

Globally, Covid-19 cases are approaching 277 million, with over 5 million deaths, according to Worldometer. In the U.S., cases surpassed 52 million with nearly 831,000 deaths.

Growth Stocks To Watch

Paychex (PAYX) soared 5% to a new high in heavy volume. Shares are now well extended past a 118.32 buy point of a cup base. But Paychex stock is in buy range from a rebound off the 10-week line, which offered a 122.56 buy point. The buy range goes to 134.82. Ahead of the open, the payroll services provider reported fiscal Q2 earnings and sales that easily beat views and hiked its full-year guidance.

CarMax (KMX) reversed from an early gain to a 4% drop in fast turnover. That sent the stock back below its 50-day moving average, according to MarketSmith chart analysis. Early Wednesday, the used car retailer reported fiscal Q3 earnings and sales that crushed views as robust demand and pricing for used cars offset higher costs.

Cintas (CTAS) fell 3% in heavy volume to give up its 50-day line, which it had recovered on Tuesday. It remains slightly extended from a 196.48 buy point of a flat base. But the high-volume drop below the 50-day line is bearish action.

Before Wednesday’s open, the uniform rental company reported better-than-expected fiscal Q2 results. Cintas delivered diluted earnings per share of $2.76 on sales of $1.92 billion. Analysts expected $2.65 a share on revenue of $1.76 billion.

Tesla (TSLA) rallied 5% in fast trade after CEO Elon Musk said in a podcast interview with the Babylon Bee that he has sold “enough stock” to reach his plan to sell 10% of his shares. On Tuesday, Musk sold close to 584,000 shares and exercised 2 million more options, according to regulatory filings.

TSLA stock rose more than 4% Tuesday, after closing Monday at its lowest level since Oct. 21. It remains sharply above a 764.55 buy point of a cup with handle. Tesla is an IBD Leaderboard stock.

Also on Leaderboard, Icon (ICLR) and Roblox (RBLX) rose a respective 3.6% and 2%. Icon is close to a 301.82 proper buy point of a consolidation but is in buy range from a 290.01 early entry.

Dow Jones Movers

Caterpillar (CAT), up 2% in heavy trade after gapping above its 50-day line, led the upside on the Dow. Bernstein boosted its rating on the heavy equipment maker to outperform from market perform with a $240 price target. CAT stock, about 18% off its 52-week high, is still stuck below its 200-day line.

Nike (NKE) added 1.2% in fast trade to extend Tuesday’s 6% jump, which ended a six-session losing streak. But it pared its gains. After the close Monday, the athletic shoe and apparel giant reported better-than-expected Q2 results, as the sports apparel retailer continues to cut ties with retail partners in order to focus on its own stores.

Nike stock is shaping a flat base with a 179.20 buy point. It’s about 6% away from the entry.

On the downside, Amgen (AMGN), Intel (INTC) and Verizon (VZ) gave up about 1% each.

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