Dow Jones Rallies As Apple Pops; Schumer Makes Debt Move; Facebook Up

The Dow Jones Industrial Average erased Monday’s loss as Apple (AAPL) and Microsoft (MSFT) popped higher. Senate Majority Leader Chuck Schumer moved to break the debt ceiling gridlock. Facebook (FB) gained, even as whistleblower Frances Haugen testified before a Senate panel.

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Meanwhile a cluster of stocks managed to pass buy points amid the stock market rally. Clearfield (CLFD), Focus Financial Partners (FOCS), EOG Resources (EOG) and Robert Half International (RHI) all staged breakouts.

However Oanda senior market analyst Edward Moya said there are still plenty of reasons to be cautious.

“Turnaround Tuesday might not lead to a substantial rally as Evergrande uncertainty remains, DC drama will last a couple more weeks, Treasury yields are consolidating ahead of Friday’s employment report, and Shanghai markets are closed for Golden Week,” he said in a note to clients.

Chuck Schumer Makes Debt Ceiling Move

Senate Majority Leader Schumer is gunning to hold a debt ceiling vote by Wednesday. Stakes are high, with Treasury Secretary Janet Yellen previously warning Congress it must raise the debt limit by Oct. 18.

Schumer threw down the gauntlet to Senate Democrats in a terse missive.

“Let me be clear about the task ahead of us: we must get a bill to the president’s desk dealing with the debt limit by the end of the week. Period,” he said in his letter to colleagues.

Winning over the support of Senate Republicans remains a major stumbling block. Sixty votes are needed, but the 100 seat Senate is evenly split.

Senate Minority Leader Mitch McConnell last week blocked Democrat efforts to hold a vote to increase the debt limit with just a simple majority of senators.

He has pointed out that Democrats could raise the debt ceiling on their own by reopening the reconciliation process, saying it is “the path they will need to take.”

Nasdaq Gains, Small Caps Lag

The Nasdaq posted the best gains out of the major indexes Tuesday, closing up 1.3%. Netflix (NFLX) was the biggest gainer, rising more than 5%. It came after Cowen reiterated its outperform rating on the streaming giant.

The S&P 500 also squeezed out a solid gain, rising 1.1%. Medical devices stock Abiomed (ABMD) turned in the best gain here, popping nearly 6%.

The S&P sectors were nearly all green, with financials turning in the best gains. Technology was another notable upside mover. Real estate and utilities were the only laggards.

Small caps lagged the other indexes, with the Russell 2000 rising just 0.3%.

In contrast, growth stocks excelled. The Innovator IBD 50 ETF (FFTY) closed with a gain of 1.5%, though this did not make up for Monday’s shellacking.

Dow Jones Erases…