News of fresh China tariffs spooked the stock market early Wednesday, but major stock indexes reversed higher in impressive fashion.
XTechnology stocks and small caps led the way. The Nasdaq composite rose close to 1.5% and the Russell 2000 added 1.3%. After falling 2.1% intraday, the Dow Jones industrial average picked up 1%. The S&P 500 gained 1.2%. Preliminary data showed volume on the NYSE and Nasdaq coming in slightly lower than Tuesday's levels.
China, the world's second-largest economy, said it will target $50 billion worth of American products with 25% tariffs.
Boeing (BA) underperformed in the Dow. Shares fell 1% on a weak day overall for aerospace stocks. The aerospace industry is one of many industries in China's cross hairs regarding potential tariffs.
Apple (AAPL) reversed higher in the Dow. Shares rose 1.9% as the tech bellwether finds support at the 200-day moving average. Apple retook its 50-day moving average in higher volume, a buy signal for aggressive traders.
Other technology stocks in the Dow outperformed. IBM (IBM) and Microsoft (MSFT) ended with gains of around 3%.
Homebuilders Rally
In the stock market today, homebuilders turned in solid showings on the heels of strong earnings from Lennar (LEN). Shares jumped 10%. Adjusted earnings smashed expectations and surged nearly 600% from the year-ago quarter. Sales jumped 29% to nearly $3 billion. IBD 50 name LGI Homes (LGIH) bounced off the 50-day moving average as it works on a cup-with-handle base with a 72.10 buy point. Shares vaulted nearly 9% to 71.43.
Other big gainers in the IBD 50 on Wednesday included Floor & Decor (FND). Shares jumped 8% to 56.31. The hardwood flooring retailer continues to perform well after clearing an alternate entry at 51.58.
Ollie's Bargain Outlet (OLLI) outperformed ahead of its earnings report after the close. Shares rose 2.5% to 60.45, but it's extended after a breakout in late November over a 47 buy point.
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