The Nasdaq, leader among equity indexes during the first half of the year, reasserted its dominance on Tuesday. Its nearly 1.7% gain paced a broad rally in the stock market today.
As noted in IBD's current outlook, the stock market has been in a confirmed uptrend since a March 29 follow-through day. On that session, the Nasdaq surged 1.8% in higher volume vs. the prior session in Day 13 of a new rally attempt following the sharp slide in stocks in February to early March.
The S&P 500 was not too far behind, though. A nearly 1.2% gain on Tuesday underscored strength in sectors and industry groups outside tech, including travel, transportation, electrical equipment, residential building, life insurance, airfreight and construction products.
Meanwhile, the Dow Jones Industrial Average looked intent on breaking a six-day slide.
The 30-stock blue-chip gauge gained nearly 0.7% and is close to retaking the 34,000 level. At least seven members of the Dow industrials rose 2 points or more.
Dow Jones stock Nike just missed a 2-point gain. Shares in the athleisure titan rose 1.87 points, or 1.7%, and crossed back above their 200-day moving average. However, NKE stock has yet to retake the 50-day line; leading stocks typically trade above their 50-day lines and lead them higher. Watch for Nike's May-quarter results on Thursday after the close.
Stock market volume was running nearly 15% higher vs. the same time on Monday, a promising sign that institutions deployed more capital to work.
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At the session high of 13,578, the Nasdaq composite held a 29.7% gain since Jan. 1. That towers over a 14.1% advance by the S&P 500 at its session high of 4384.
Meanwhile, long-dated Treasury bonds continued rangebound trading.
The yield on the benchmark U.S. Treasury 10-year note edged up 4 basis points to 3.76%.
Commodities did not participate in the Nasdaq-led upside. WTI crude oil futures dropped 2.3% to $67.78 a barrel. Gasoline futures sank 1%, while gold shaved 0.6% to $1,922.80 an ounce.
Back to stocks, market breadth continued to improve, a good sign for active investors.
According to early data on Thinkorswim, gainers beat losers on the Nasdaq by nearly 900 issues. On the NYSE, rising stocks topped decliners by nearly a 3-1 ratio.
Small Caps Rally With Nasdaq
On the NYSE, volume climbed 1% ahead of Monday's levels, according to early data on the homepage of MarketSmith.
The solid stock market gains followed a raft of positive economic data on durable goods orders, which rose 1.7% in May, month on month. Core orders, rising 0.6%, beat expectations for flat growth.
Meanwhile, the Case-Shiller home prices index fell less than thought. The 20-city unadjusted prices index fell 1.7% year over year. According to Econoday, the consensus forecast called for a 2.3% fall.
However, keep in mind that key inflation news is coming Friday.
The PCE index, the favorite inflation indicator of the Federal Reserve, comes out before the open, and could change sentiment regarding future interest-rate hikes this summer. Right now, bond traders tracked by CME see a 79% probability that the Fed will raise rates another quarter point to a 5.25%-5.5% range at the July meeting.
Almost Matching The Nasdaq
Small caps also did well on Tuesday, nearly keeping pace with the Nasdaq.
The iShares Russell 2000 ETF jumped 1.5% and is trying to hold above a key long-term technical level, the 200-day moving average.
One of the day's biggest movers is airline stocks, which rallied 5% on a price-weighted basis. IBD's airline transportation group is now up 26% for the quarter.
United Airlines conducted a strong breakout after peer Delta Air Lines gave bullish guidance on its Investors Day presentation. Delta jumped 6%.
United Airlines shares rose 5.2% in heavy volume and surpassed a 54.05 buy point in a cup with handle.
The 5% buy zone goes up to 56.75.
Bank of America reportedly raised its price target on UAL shares to 50 from 43. Read more about UAL in this IBD Stock Of The Day feature.
Delta saw its Relative Strength Rating rise to 94 on a scale of 1 to 99. This means DAL stock is now outperforming 94% of all companies in the IBD database over the past 12 months. Typically, great stocks in the market are already showing a high degree of relative strength before they break out of a well-formed base and shoot to new highs.
UAL stock's RS Rating also stands at a lofty 94.
More Airlines Take Flight
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Other companies to watch in the group? American Airlines also coasted past a proper entry point. The stock, rallying almost 6% in above-average turnover, is still in the buy zone after rolling past a 16.72 entry in a five-month cup with handle.
Meanwhile, Alaska Air joined the breakout crowd, rising 4.3% in light turnover. And JetBlue, up 9% in volume running 97% higher than normal, is carving a deep cup entry.
The base's left-side high of 9.35 serves as one buy point, but one could also consider a trendline entry near 8.20 as a potential early entry.
Nasdaq Transport Play
As noted on Tuesday's IBD Live show, Nasdaq-listed truck transport giant Old Dominion Freight surged nearly 7%. The stock powered past a trendline entry of its own near 340. The chart may also be interpreted as a double bottom with a 356.70 buy point.
Volume was running 43% above its average pace over the past 50 sessions.
ODFL has a market value of $39 billion, an Earnings Per Share Rating of 91 and a rising relative strength line.
On the downside, pharmacy giant Walgreens Boots Alliance led stocks falling in heavy volume, as seen in the IBD Stocks On The Move table. WBA gapped 9% lower in volume running six times its usual level. Walgreens issued bearish sales guidance for the rest of fiscal 2023, which ends in August.
Walgreens posted a 4% rise in earnings to $1 a share for the May-ended fiscal third quarter as sales edged up 9%, the biggest increase in seven quarters.
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