The Dow Jones Industrial Average surged 1% after Senate Majority Leader Chuck Schumer struck a debt ceiling deal with Republicans. UnitedHealth (UNH) was the top blue chip. Leaderboard stock Tesla (TSLA) surged following an Elon Musk tweet. He later revealed the firm is moving its headquarters to Austin, Texas.
But while current action is encouraging, the market remains in a correction. This makes buying and holding stocks more risky. Starting out with a smaller pilot position is a wise strategy in some cases.
Schumer Takes McConnell Debt Ceiling Deal
Stocks were buoyed after Senate Majority Leader Chuck Schumer made a debt ceiling deal with Republican counterpart Mitch McConnell.
“It’s our hope that we can get this done as soon as today,” Democrat leader Schumer said on the Senate floor.
The deal sees the borrowing limit raised by $480 billion. This is what the Treasury Department says is needs to meet obligations until Dec. 3.
Treasury Secretary Janet Yellen had warned the U.S. would run out of cash by Oct. 18 if Congress failed to raise the ceiling.
Nasdaq Rallies, Small Caps Lead
The Nasdaq was the top major index of the day, posting a gain of 1.1%. The S&P 500 also fared well, rising 0.8%, though it pared gains.
U.S. Stock Market Today Overview
Last Update: 4:10 PM ET 10/7/2021
S&P 500 sectors were nearly all green, with consumer discretionary, materials and technology among the best areas. Utilities was the only laggard.
Small caps outperformed the other indexes after several days of losses. The Russell 2000 surged 1.6%.
In contrast, growth stocks also outperformed. The Innovator IBD 50 ETF (FFTY) closed up 1.1%.
Dow Jones Today: UnitedHealth Leads, Microsoft Stock Gains
The Dow Jones industrials closed off highs, but still rose more than 300 points. They finished with a gain of 1%.
UnitedHealth stock fared best, rising nearly 3%. Leaderboard stock Microsoft also rose, up 0.6%.
The software stock is forming a new flat base but is currently well shy of the ideal buy point of 305.94.
Tesla Stock Rises Musk Tweet; Firm To Move HQ
Cash was flowing into Tesla stock late. While it closed off highs, it finished with a gain of 1.4%.
The stock rose after Tesla CEO Elon Musk tweeted an update on the rollout of the latest edition of Tesla’s Full Self Driving driver assist software.
“FSD Beta 10.2 rolls out Friday midnight to ~1000 owners with perfect 100/100 safety scores,” he said. “Rollouts will hold for several days after that to see how it goes.”
Musk also said that if this “looks good,” beta will gradually roll out to owners with 99 scores and below.
He later revealed that the EV firm will be moving its headquarters to Austin, Texas from its current base in California’s Silicon Valley. He made the announcement at the company’s annual shareholder meeting, which was held in the Austin area.
Tesla is currently building a vehicle assembly plant outside of Austin on a property close to the city’s airport.
Tesla stock climbed Wednesday after the firm decided to yet again hike prices amid ongoing chip shortages.
The Model 3 Standard Range+ price rose $2,000 to $41,990, while the Performance model price increased $1,000 to $57,990. The Model Y Long Range and Performance now each cost $1,000 more at $54,990 and $61,990.
The Leaderboard stock rose 1.4% to close at 793.61.
These 3 Stocks Offer Buy Points
U-Haul parent Amerco cleared a 677.44 buy point Thursday. It is trading above its short-term moving average, which is a bullish indicator. The stock closed up almost 4%, and remains inside the buy zone.
The recent IBD Stock Of The Day operates a fleet of 176,000 trucks, 126,000 trailers and 46,000 towing devices.
U-Haul is the nation’s largest “do-it-yourself” moving company. It has seen demand spike as Americans working from home amid the Covid pandemic flee crowded cities for suburbs and satellite cities.
Endava closed past the top of its buy range after passing an entry point of 143.60. The growth stock consolidated for seven weeks.
DAVA stock currently boasts a very strong relative strength line, which is a key metric to focus on in uncertain markets.
The stock currently heads the technical services industry group, which has been outperforming of late.
Atlassian stock is currently rebounding off the key 10-week moving average. This serves as a buying opportunity. Its ideal buy point here is 374.88, but it is actionable up to 412.37.
TEAM stock is currently trading above its short-term moving averages, but investors will want to see the relative strength line pick up again.
The collaboration software stock was the IBD 50 Stocks To Watch pick for Thursday.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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