Dow Jones up on election day; These ‘Republican stocks’ are increasing; Bitcoin, Coinbase Dive

The Dow Jones Industrial Average pulled back from peaks as Americans voted on Election Day. A number of so-called “Republican stocks” went up, but Trump’s SPAC Digital World Acquisition (DWAC) fell. Coin base (COIN) and Riot Blockchain (RIOT) plunged as Bitcoin fell towards June market lows after Binance reached an agreement to buy the FTX crypto exchange.

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A number of stocks tested buy points amid the largely bullish action, including Albemarle (ALB), BJ’s Wholesale Club (BJ) and Factory outlet (UN).

Volume increased on both Nasdaq and the New York Stock Exchange compared to the same time on Monday. This is positive on a busy day.

The interest rate on the benchmark index for 10-year government bonds fell 9 basis points to 4.13%. West Texas Intermediate crude fell more than 2%, cutting up to $90 a barrel.

Nasdaq Pops, IBD 50 lags

The Nasdaq was off tops as it rose 0.5%, the same as the S&P 500.

The S&P 500 sectors were mostly positive, with technology and health care performing the best. Energy was the only laggard.

Small caps also advanced, with the Russell 2000 up 0.6%.

The Innovator IBD 50 ETF (FFTY), a watch for growth stocks, returned just 0.4%.

Dow Jones Pops: Amgen, Boeing Shine

The Dow Jones Industrial Average was the best performer of the major averages, rising nearly 1%. But it also gave up some gains.

Amgen (AMGN) led the index, lifting almost 6%.

Boeing (BA) also shined, adding around 2%. Walgreen Boots Alliance (WBA) slowed, falling 1%.

Gains in ‘Republican Stocks’

Research shows that the stock market tends to rise after the mid-term elections. Since 1950, the average one-year return on the S&P 500 after an interim period has been about 15%.

With Republicans expected to take at least partial control of Congress, a number of stocks handpicked by Strategas for its GOP portfolio rose.

Defense play Lockheed Martin (LMT) rose 1% and is currently trading in a buy zone above a 480.09 entry, according to MarketSmith analysis.

Johnson & Johnson (JNJ) reversed higher to gain nearly 1%. It is approaching a cup-with-handle entry of 175.49.

Leaderboard stock Cheniere energy (LNG) is also on the list and rose almost 2% for the day. The natural gas play is trading just below a buy point of 178.72.

Donald Trump stock slides

Digital World Acquisition failed to rally with other Republican stocks. Donald Trump SPAC surged Monday on election speculation.

The future of the firm, which is trying to take the former president’s Trump Media and Technology Group public, remains up in the air. A shareholder vote on whether to approve a deadline extension to complete the merger has been pushed back to 22 November.

After initially failing to hold the vote in September, the SPAC’s sponsor, ARC Global Investments, contributed about $2.9 million to extend the merger deadline until Dec. 8, according to federal filings.

The Trump Media and Technology Group’s main product at the moment is the conservative social media site Truth Social, a right-leaning alternative to Twitter.

DWAC shares fell almost 3%. It’s up 62% so far this month, but has lost about 45% for the year. The Donald Trump stock is among the bottom 19% of stocks in terms of stock market performance over the past 12 months.

COIN stocks and Bitcoin surged before giving up gains and more.

They battled off lows after it emerged that Binance has reached an agreement to buy the FTX crypto exchange.

In a tweet, Binance CEO Changpeng Zhao said they came to the company’s rescue.

“This afternoon, FTX asked for our help. There is a significant liquidity crisis,” he said. “To protect users, we signed a non-binding LOI, intending to fully purchase FTX.com and help cover the liquidity crisis.”

It’s a remarkable turnaround in fortunes for FTX, which is led by CEO Sam Bankman-Fried. Earlier in 2022, it was valued at $32 billion by private investors.

Binance is the world’s largest crypto exchange with 24-hour trading volume.

After briefly turning positive, COIN stock reversed sharply, falling nearly 11% on the day. It continues to trade below all major moving averages. The shares have fallen almost 80 percent since the start of the year.

Bitcoin also saw losses intensify after lifting from the lows of the day. It was trading just below the $19,000 mark, down about 4%.

Other cryptocurrency games struggled. Grayscale Bitcoin Trust (GBTC) plunged almost 12% while Bitcoin miner Riot Blockchain fell almost 8%, although it was low for the day.

ZeroHedge said in a tweet that the FTX liquidation hit stocks, knocking them off highs.

Outside the Dow Jones: 3 stock sample entries

Albemarle briefly passed a consolidation buy point at 308.34 before reversing. It also managed an early entry of 287.98, just above the November 1 high.

Overall performance is strong, with the stock holding a perfect IBD Composite Rating of 99.

Charlotte, NC-based Albemarle is the world’s largest lithium producer and one of the largest suppliers of lithium for electric batteries. The company already supplies the crucial metal to the EV giant Tesla (TSLA).

BJ’s Wholesale Club tested a cup-with-handle entry at 78.93. The relative strength line just hit a new high, a bullish sign.

Earnings are a key strength for retail. Big money has been buying the stock lately, with the Accumulation-Distribution rating coming in at B+.

Fabrinet is in a buy zone after clearing a buy point for cup with handle at 118.15. It went with strong earnings.

With the current rise in the stock market still under pressure, buying shares now entails additional risk.

Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.

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