The Dow Jones Industrial Average edged higher as Americans voted on Election Day. A number of so-called “Republican stocks” went up, even the Donald Trump SPAC Digital World Acquisition (DWAC) fell. Coin base (COIN) and Riot Blockchain (RIOT) plunged as Bitcoin undercut June bear market lows after Binance moved to buy FTX crypto exchange.
A number of stocks tested buy points amid the largely bullish action, including Albemarle (ALB), BJ’s Wholesale Club (BJ) and Factory (UN).
Volume increased on both Nasdaq and the New York Stock Exchange compared to the same time on Monday. This is positive on a busy day.
The interest rate on the benchmark index for 10-year government bonds fell 9 basis points to 4.13%. West Texas Intermediate crude fell more than 2%, cutting up to $90 a barrel.
Nasdaq Pops, IBD 50 lags
The Nasdaq was off tops but fought off negative pressure to gain 0.2. The S&P 500 was up 0.4 percent.
The S&P 500 sectors were broadly positive, with materials and real estate performing best. Discretionary consumers and communication services lagged the most.
Small caps reversed lower, with the Russell 2000 down 0.5%.
But the Innovator IBD 50 ETF (FFTY), a watch for growth stocks, was the worst performer, falling 0.6%.
Dow Jones Pops: Amgen Shines, Disney Earnings Due
The Dow Jones Industrial Average was the best performer of the major averages, rising nearly 1%. But it also gave up some gains.
Amgen (AMGN) led the index, rising around 5%. Boeing (BA) also shined, as it rose around 2%.
Walgreen Boots Alliance (WBA) slowed, falling 1.4%. But Walt Disney (DIS) was the worst performer ahead of its earnings report as it fell 1.5%
Gains in ‘Republican Stocks’
Research shows that the stock market tends to rise after the mid-term elections. Since 1950, the average one-year return on the S&P 500 after an interim period has been about 15%.
With Republicans expected to take at least partial control of Congress, a number of stocks handpicked by Strategas for its GOP portfolio rose.
Defense play Lockheed Martin (LMT) rose nearly 1% and is currently trading in a buy zone above a 480.09 entry, according to MarketSmith analysis.
Johnson & Johnson (JNJ) reversed higher to gain nearly 1%. It is approaching a cup-with-handle entry of 175.49.
Leaderboard stock Cheniere energy (LNG) is also on the list and rose almost 2% for the day. The natural gas play is trading just below a buy point of 178.72.
Donald Trump stock slides
Digital World Acquisition failed to rally with other Republican stocks. Donald Trump SPAC surged Monday on election speculation.
The future of the firm, which is trying to take the former president’s Trump Media and Technology Group public, remains up in the air. A shareholder vote on whether to approve a deadline extension to complete the merger has been pushed back to 22 November.
After initially failing to hold the vote in September, the SPAC’s sponsor, ARC Global Investments, contributed about $2.9 million to extend the merger deadline to Dec. 8, according to federal filings.
Trump Media and Technology Group’s main product at the moment is the conservative social media site Truth Social, a right-leaning alternative to Twitter.
DWAC stock was off lows for the day, but held down more than 6%. It’s up about 64% so far this month, but has lost nearly 48% for the year. The Donald Trump stock is among the bottom 19% of stocks in terms of stock market performance over the past 12 months.
Coinbase Stock, Bitcoin Rally After Move
COIN stocks and Bitcoin surged before giving up gains and more.
They battled off lows after it emerged that Binance has reached an agreement to buy the FTX crypto exchange.
In a tweet, Binance CEO Changpeng Zhao said they came to the company’s rescue.
“This afternoon, FTX asked for our help. There is a significant liquidity crisis,” he said. “To protect users, we signed a non-binding LOI, intending to fully purchase FTX.com and help cover the liquidity crisis.”
It’s a remarkable turnaround in fortunes for FTX, which is led by CEO Sam Bankman-Fried. Earlier in 2022, it was valued at $32 billion by private investors.
Binance is the world’s largest crypto exchange with 24-hour trading volume.
After briefly turning positive, COIN stock reversed sharply, falling nearly 13% on the day. It continues to trade below all major moving averages. The shares are down over 80% since the start of the year.
Bitcoin also saw losses intensify after lifting from the lows of the day. It was trading just above the $18,000 mark after falling more than 11%. It is at the lowest level for the year.
Other cryptocurrency games struggled. Grayscale Bitcoin Trust (GBTC) plunged nearly 13% while Bitcoin miner Riot Blockchain fell more than 10%, although it was low for the day.
ZeroHedge said in a tweet that the FTX liquidation hit stocks, knocking them off highs.
Outside the Dow Jones: 3 stock sample entries
Albemarle briefly passed a consolidation buy point at 308.34 before reversing. It also managed an early entry of 287.98, just above the November 1 high.
Overall performance is strong, with the stock holding a perfect IBD Composite Rating of 99.
Charlotte, NC-based Albemarle is the world’s largest lithium producer and one of the largest suppliers of lithium for electric batteries. The company already supplies the crucial metal to the EV giant Tesla (TSLA).
BJ’s Wholesale Club tested a cup-with-handle entry at 78.93. The relative strength line just hit a new high, a bullish sign.
Earnings are a key strength for retail. Big money has been buying the stock lately, with the Accumulation-Distribution rating coming in at B+.
Fabrinet is in a buy zone after clearing a buy point for cup with handle at 118.15. It went with strong earnings.
With the current rise in the stock market still under pressure, buying shares now entails additional risk.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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