Stocks dropped at the starting bell, then trimmed losses on Wednesday, as the market extended the pause in its uptrend. New coronavirus cases continued to decline. Bitcoin briefly punched to new record highs above $51,000. China-based stocks were in motion, with and staking early leads. Earnings news sent Cornerstone Demand and Agilent past buy points. Meanwhile, regulatory filings from Berkshire Hathaway, Greenlight Capital and others gave early action a shake, and sent Chevron and Verizon to the top of the Dow Jones today.


The Dow Jones Industrial Average trimmed its opening loss to 0.2%, the S&P 500 eased to a 0.5% drop. The Nasdaq Composite dropped 1.2%, the narrowed to a 0.9% decline on the stock market today. Baidu (BIDU) and Synopsis (SNPS) traded at the bottom of the Nasdaq 100, while Apple (AAPL) moved 1% lower. (JD) once against staked out the top of the Nasdaq 100 with a 3.8% advance. The online apparel retail giant said on Tuesday it would spin off its logistics unit as a separately traded entity on the Hong Kong Stock Exchange.

Small caps tracked the overall action, with the Russell 2000 down 0.7% in early trade. Cornerstone Demand (CSOD) led the index, up 16% and scoring a breakaway gap breakout on earnings news.

Dow Jones Today: Buffett Buys Chevron, Verizon

Blue chips received an early stir from Warren Buffett’s Berkshire Hathaway (BRK.A), which reported trimming 887 million shares of Apple stock and adding 146.7 million shares of Verizon (VZ), and 48.5 million shares of Chevron (CVX). The regulatory filing also reported dropping Berkshire’s entire stake of JPMorgan (JPM).

Consequently, Chevron and Verizon topped premarket action on the Dow Jones today, up about 3% each. Apple shares dropped 1.4%, lagging at the bottom of the Dow.

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Berkshire also reported increasing its holdings in Dow Jones stock Merck (MRK) by 28%, along with other drugmakers Abbvie (ABBV) and Bristol-Myers Squibb (BMY). Merck gained 1.6% in early action.

Earnings: Agilent, CornerStone Score Breakaway Gaps

Among the names rising on earnings news early Wednesday, Garmin (GRMN) flattened its early gains after a solid fourth-quarter earnings beat early Wednesday. Tower Semiconductor (TSEM) rose 1.8%, and natural gas producer EQT (EQT) added 1.2%. A late Tuesday report sent Kornit Digital (KRNT) up more than 12%.

Israel-based SolarEdge (SEDG) backed down 1% after reporting lesser-than-expected declines in fourth-quarter revenue and earnings. The stock had triggered the automatic sell rule, erasing a gain from a December breakout and pulling back to its 50-day moving average.

Software developer Cornerstone Demand rallied more than 18% after a stronger-than-forecast fourth-quarter performance. The move sent shares well past what IBD MarketSmith analysis charts as a 46.92 buy point in a six-week cup base. Teh gap up moves sets up a breakaway gap buying opportunity, with a buy point at 53.55.

Web developer (WIX) jumped 1.6% after reporting above-forecast fourth-quarter earnings and revenue. The stock ended Tuesday 14% below a 319.44 buy point in a 28-week base.

Bio-research leader Agilent Technologies (A) gained 4.7% in early action. It reported a 31% earnings gain and a 14% rise in revenue for its fiscal first quarter. Second-quarter guidance was mixed, however. Shares jumped beyond a buy range above a flat base buy point at 120.44. That also set up a breakaway gap, with a buy point at 133.10.

January Retail Sales Surge

Stocks showed little response to Commerce Department data showing a surprise jump in January retail sales. Sales surged 5.3% during the month, vs. a 0.7% slip in November and multiples above economist projections for a 1.1% increase. Minus vehicles, sales rose 5.9%. Subtracting gas and autos, sales jumped 6.1%, trouncing expectations for a 0.5% rise.

The 10-year yield dipped 2 basis points to 1.29%, holding just below a one-year high. Oil prices eased, with West Texas Intermediate dippinb below $60 a barrel and Brent crude trading just below $64. Copper eased, after notching its highest mark in almost a decade.

Coronavirus Update: Declines Accelerate

The decline in new coronavirus cases reported in the U.S. continued, with the seven-day average for new cases reported falling on Tuesday to below 83,000. That marked 36 straight days of declines and put the number at the lowest level since Oct. 31. The seven-day average reached a peak of 255,258 on Jan. 11, according to Worldometer.

Deaths began trending lower much later than cases reported. The seven-day average for deaths reported daily hit a high of 3,447 on Jan. 26. After 21 straight days of declines, deaths fell to 2,270 on Tuesday.

The Centers for Disease Control and Prevention reports that 71.657 million doses of vaccine have so far been distributed in the U.S. Some 55.22 million doses, almost 77% of those distributed, have been administered. At Dec. 30, fewer than 11.5 million doses had been distributed, with about 2.1 million shots administered, an 18.2% application rate.

Bitcoin Approaches $52,000

Bitcoin rallied as high as $51,693 early Wednesday, with prices up about 5% and holding well above $51,000, according to CoinDesk. The cryptocurrency has gained 76% since the start of the year, following an increase of nearly 300% in 2020.

Among Bitcoin-related stocks, Marathon Patent Group (MARA) climbed 8.4%. MicroStrategy (MSTR) reversed and slipped 1%. The Amplify Transformational Data Sharing ETF (BLOK) rallied 2.8%.

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China-based (WBAI) soared more than 17% in early trade. The stock gained 35% on Tuesday, after the company announced it would acquire Blockchain Alliance Technologies Holding Co., a Cayman Islands-based Bitcoin mining and services operator.

IBD Leaderboard stock PayPal Holdings (PYPL) fell 0.4%. PayPal shares have felt some influence from Bitcoin price swings since early November, when the company launched a cryptocurrency trading service that deals in Bitcoin. PayPal stock is extended, following a November breakout and a January rebound from 10-week support.

IPOs: Miniso, FuboTV

On the IPO front, Miniso Group Holdings (MNSO) clawed up 4.1% and FuboTV (FUBO) notched a 4% gain. A public filing from Comcast (CMCSA) showed in Tuesday the broadcast giant had taken a 9.3% stake in FuboTV, a sports streaming venue that has also expanded into online sports wagering.

After Tuesday’s close, Japan’s Nomura announced an 8.8% stake in the company. A filing from hedge fund Greenlight Capital also showed FuboTV among its new purchases in the fourth quarter. Greenlight was also a pre-IPO investor in the New York-based outfit. FuboTV went public in October at 28.

FuboTV shares are rising off a test of support at their 21-day exponential moving average. The stock has formed its first base, a severe cup-with-handle with a buy point at 57.57. Shares ended Tuesday 33% below that buy point, and up almost 55% from their initial offering price.

Dow Jones Today: Walmart Earnings On Deck

There is no earnings activity on the Dow Jones today, with Walmart (WMT) set to turn in the week’s only blue-chip report early Thursday. Home Depot (HD) reports next Tuesday. (CRM) is aggressively climbing the right side of a 15-week cup base before it wraps up the Dow’s December-quarter reporting season on Thursday Feb. 25.

Walmart is in an 11-week flat base with a standard buy point at 153.76. The pattern offers an alternative buy point for more aggressive investors at 150.03.

Find Alan R. Elliott on Twitter @IBD_Aelliott


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