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Dow Jones Today, Stocks Open Higher Ahead Of Fed; Adobe, FedEx Earnings: Snowflake IPO Set To Debut

Stocks opened on the upside Wednesday, boosted by a record-high reading in homebuilder sentiment, as the market looked toward an afternoon Fed policy announcement. Earnings news prodded FedEx to an early rally, while Adobe reversed lower. Salesforce.com cinched the early lead on the Dow Jones today.

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The S&P 500 climbed 0.4%, while Dow Jones Industrial Average moved 0.5% higher. The Nasdaq rose 0.3%. Small caps took the early initiative, as the Russell 2000 popped 0.6%. Chipmaker Veeco Instruments (VECO) was an early small cap leader, up 15% after an upgrade to buy from Goldman Sachs.

Atop the Nasdaq 100, as Western Digital (WDC) and Micron Technology (MU) each hammered out 3% gains. Premarket leader Adobe (ADBE) reversed its early advance, falling 1.6% after a 25% earnings gain squarely beat fiscal third-quarter expectations, while a 14% rise in revenue squeaked past analyst views. The IBD Leaderboard stock triggered a sell signal after erasing the double-digit gain that followed an Aug. 20 breakout.

FedEx (FDX) rocketed 6.3% higher to lead the S&P 500 after delivering a surprise earnings surge and stronger-than-expected revenue gains in its fiscal first quarter. More than a half-dozen analysts raised their price targets on the stock, including a 300 target from Citi. FedEx shares ended Tuesday with a year-to-date gain of 56%.

Airfreight peer UPS (UPS) jumped into the FedEx slipstream, trading 1.7% higher in premarket action.

Gear up for Wednesday's market action by reading IBD's Investing Action Plan.

In Motion: Tesla, General Motors

Makers of electric automobiles were in motion, as Tesla (TSLA) pulled back 1.9%. Both Deutsche Bank and Credit Suisse hoisting the stock's price target to 400, about 11% below Tuesday's closing price. Tesla stock has rallied 36% over the past five sessions.

General Motors (GM) shares surged 2.6% after the company announced a new family of interchangeable electric vehicle drive units it calls Ultium Drive, which it plans to employ in its next generation of vehicle designs. Ken Morris, GM's vice president of autonomous and electric vehicle programs, said, "making motors, transmissions, driveline components and systems are among GM's best-known competencies, and our manufacturing expertise is proving not only transferable but advantageous as we make the transition to EVs."

GM stock ended Tuesday in a buy range, above a 31.22 buy point.

Dow Jones Today: 3M, UnitedHealth Lead

Adhesives heavyweight 3M (MMM) rallied 1.3% early, after Credit Suisse hoisted the stock's price target to 197, from 179. 3M is in a buy range above a handle buy point at 167.59.

UnitedHealth Group (UNH) also posted an early advance on the Dow Jones today, up 1.3%. Cigna (CI) announced estimates for its rebranded Evernorth services unit to generate $100 billion iin annual revenue. The unit will be a direct competitor to UnitedHealth's Optum division. Cigna shares rose 2.1% in morning trade.

On The Radar: Facebook, Snowflake

On the Nasdaq 100, Facebook (FB) traded down 0.4% after a Wall Street Journal report late Tuesday said the Federal Trade Commission was preparing a possible anti-trust lawsuit against the social media giant before the end of the year. Facebook shares ended Tuesday's session up 21% from a breakout in late May.

Eyes were also on data warehousing software developer Snowflake (SNOW), as the Warren Buffett-backed new issue prepared to launch its initial public offering on Wednesday.  The IPO priced high at $120 a share, raising $3.3 billion and topping forecasts to raise $2.9 billion by offering 28 million shares.


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Some apparel manufacturers staged an early rally with Capri Holdings (CPRI) spiking more than 8% and Tapestry (TPR) notching a 9.2% gain. Deutsche Bank upgraded Tapestry to buy, from hold, with a 21 price target. The moves follow Amazon.com's (AMZN) Tuesday launch of its Luxury Stores addition to its mobile shopping app.

Shares of Amazon, an IBD Leaderboard stock, slipped a fraction in early trade.

Retail Sales Slow, Builder Sentiment Hits Record

Stock markets across Asia ended mixed on Wednesday with benchmarks in China booking mild losses. Europe's markets turned mixed in afternoon trade, with London's FTSE 100 down 0.4% and Frankfurt's DAX fighting to hold a narrow gain.

For U.S. markets, the Federal Reserve policy announcement at 2 p.m. ET, followed by a press conference with Chairman Jerome Powell starting at 2:30 p.m., could mark an inflection point in the day's market action. The Fed has made no bones about leaving interest rates untouched, probably for a period of years, so no news is expected on that front.

But views on the economy, further guidance on inflation targets, and potential shifts in stimulus strategies could all spur stock market reactions.


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Retail sales growth slowed by half in August, according to the Commerce Department, which reported a 0.6% gain in overall sales for the month. That was down from July's 1.6% rebound, undercutting economist views for a 0.9% increase. Sales minus automobiles and gasoline were only slightly better, up 0.7%, vs. views for a 1.1% rise.

Builder sentiment jumped in September, with the National Association of Home Builders reporting its Housing Market Index rose to 83 for the month. That was highest reading in the index's history, up from July's reading of 78 and surpassing estimates for another 78 tally. Fast-rising lumber prices were the primary red flag on the horizon, as Coavid-driven home improvement demand and wild fires in the west pinch lumber supplies.

Homebuilder stock responded with early gains: DRHorton (DHI), Toll Brothers (TOL) and PulteGroup (PHM) all rose more than 2%. IBD Leaderboard stock LGI Homes (LGIH) gained 1.3%.

The Energy Information Administration's oil inventories update at 10:30 a.m. could receive added attention this week, due to production shut-ins caused by Hurricane Sally, a Category 2 storm, plowing into the Alabama coast and Florida panhandle Wednesday morning.  The price of West Texas Intermediate oil traded up 2.6%, to $39.29 a barrel.

Coronavirus Update: Active Cases Peak

The number of deaths in the U.S. from Covid-19 topped 200,000 in the 24 hours to Wednesday morning. The total count of persons infected since the onset of the pandemic climbed above 6.78 million, according to Worldometer data. The total count includes persons who have died as well as those who have recovered.

The number of persons currently infected in the U.S., called active cases, peaked on Sept. 1 at just below 2.57 million. Worldometer has reported some back and forth in the numbers, but shows the tally of active cases generally trending lower following that peak.

It is the longest sustained decline in active cases since the May 30 to June 16 period. During that period, active cases declined 6.9% to a low on June 4 before starting to rise again. The number of active cases rebounded to above the 1.16 million level on June 16.

On Tuesday, the number of active cases was just below 2.52 million, down 1.8% from the Sept. 1 peak.

The number of deaths occurring each day in the U.S. peaked early in the pandemic, with 2,748 Covid-related deaths reported on April 21. The daily death count trended lower until about June 4 or 5, then started to climb again. The numbers then hit a second, lower peak, with 1,850 deaths occurring on July 30. The general trend following July 30 has been a moderate decline, with Worldometer showing 1,197 deaths reported on Tuesday.

Dow Jones Today: Tuesday's CAT Factor

The S&P 500, the Russell 2000 and the Dow Jones today are all looking to extend their advance to a fourth day. The Dow closed essentially flat on Tuesday, lagging well behind the other benchmarks, particularly the Nasdaq's 1.2% rally.

Caterpillar (CAT) and JPMorgan (JPM) were Tuesday's big drags on the Dow, each ending with losses of more than 3%.


For more detailed analysis of the current stock market and its status, study the Big Picture.


Caterpillar reported machine sales fell 20% in the three-month period to the end of August. That jibed with three-month declines through June and July. But global resource industry sales declined 27% to the end of August, vs. a 19% fall-off through the end of July.

However, Wells Fargo raised its price target on the stock to 160, from 140, after industry surveys pointed to modest quarter-over-quarter improvements in third-quarter demand.

JPMorgan tumbled after reporting a rise in net credit losses in August. In addition, Bloomberg reported the bank sent some workers home after an equities trader tested positive for Covid-19.

At the top of the Dow, Salesforce.com (CRM) and specialty chemicals maker Dow (DOW) each jumped 2% on Tuesday. Salesforce is consolidating, well extended after a May breakout from its bear market base.

Dow is up a bit more than 10%, after clearing a handle buy point at 46.17 on Sept. 1.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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