The Dow Jones Industrial Average rallied strongly as Apple (AAPL) hit a record high. Tesla (TSLA) also popped after CEO Elon Musk lashed out. The controversial Donald Trump SPAC Digital World Acquisition (DWAC) spiked higher.
Investors seem to be betting on the omicron Covid variant being manageable, which could mean current supply chain and inflation woes have hit their peak.
“U.S. stocks are quickly getting their groove back as omicron worries ease as the early (omicron variant) Covid data shows cases remain mild in nature,” Oanda senior market analyst Edward Moya said in a research note.
Nasdaq Jumps As Growth Stocks Surge
All of the S&P 500 sectors made up ground, with technology and consumer discretionary making the biggest gains. Utilities and consumer staples, which are more defensive areas, lagged.
U.S. Stock Market Today Overview
Last Update: 4:06 PM ET 12/7/2021
Small caps were battling back, with the Russell 2000 gaining 2.3%. It faded late though, which caused a rally back above its 200-day moving average to fail. It closed just under the line.
It was growth stocks that were punching the bears hardest on the nose. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, vaulted 4.4%.
Dow Jones Rallies As Apple Stock Hits Record
The Dow Jones Industrial Average lagged the other major indexes but was posted a gain of 1.4% as it rose nearly 500 points.
Apple stock roared to an all-time high as it closed up 3.5%. It is now extended past a cup-with-handle entry of 153.27. The relative strength line is also spiking.
Apple stock was boosted by a price target hike from Morgan Stanley to 200 from 164.
Elon Musk Lashes Out; Tesla Stock Makes Bullish Move
Tesla CEO Elon Musk once again hit the headlines after he lashed out at federal incentives for electric-vehicle adoption.
Musk slammed the $2 trillion social-spending bill touted by President Biden, which could give a tax credit of as much as $12,500 to consumers if they buy an electric vehicle assembled by union workers using U.S.-made batteries.
Tesla vehicles, which are built in nonunion factories, would get a reduced credit.
“Honestly, I would just can this whole bill,” Musk told the Wall Street Journal.
TSLA was also boosted by a UBS research note that said no rival would come close to Tesla in 2022. UBS kept a neutral rating on the stock but raised Tesla’s price target to 1000 from 725.
Tesla stock closed with a gain 4.2%. It is now rebounding off its 10-week moving average, which can be used as an add-on entry. But buying while the market is in a correction is risky, despite the bullish action of the past couple of days.
Tesla remains well above a 764.55 buy point of a cup with handle. The IBD Leaderboard stock is also extended past an alternate entry of 900.50. It previously triggered the eight-week hold rule from this buy point.
Trump SPAC Rockets Despite Probe
The Trump SPAC Digital World Acquisition was popping higher Tuesday. The volatile stock closed at session highs, rising 16.6%. This helped it closed above its 21-day exponential moving average.
It surged despite the fact federal regulators are now investigating the SPAC deal.
Digital World Acquisition disclosed in a filing that it is being probed by the SEC and FINRA. The firm is looking to merge with Trump Media & Technology Group.
It comes after Sen. Elizabeth Warren sent a letter to the SEC urging it to probe the deal.
She questioned whether the company and Trump “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in U.S. Securities and Exchange Commission (SEC) filing and other public statements.”
The firm is looking to launch a social media site called Truth Social and a subscription-based video-on-demand service called TMTG .
DWAC stock is now more than 70% off its record high of 175. Nevertheless, it is still up bigly for the year overall. It remains up almost 390% so far in 2021.
These Growth Stocks Pass Buy Points
Life Storage broke past a new flat base entry point of 140.05, MarketSmith analysis shows. This is part of a base-on-base formation, a powerful chart pattern that has spawned big winners in the past, and is favored by growth investors.
LSI stock is also well above its 50-day line, another encouraging feature.
Life Storage was the IBD 50 Stocks To Watch pick for Monday.
Public Storage is actionable after passing a flat base entry of 341.05. The RS line hit a new high, an encouraging sign.
Earnings are currently lagging market performance, but big money has been snapping up the stock of late.
Data storage stock Silicon Motion Technology held near highs after gapping out of an 18-week consolidation. Accumulation has also been rising for this stock, an important feature to look out for.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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