The Dow Jones Industrial Average shrugged off rising yields as new inflation data looms. Famed fund manager Cathie Wood bought some chip stocks while she sold Tesla (TSLA). Warren Buffett stock Occidental Petroleum (OXY) rose after it emerged that Berkshire Hathaway (BRKB) had raised its stake.
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Meanwhile, a trio of stocks topped buy points. New IBD Leaderboard stock Rambus (RMBS) passed a trendline entry, while Medpace (MEDP) and Atkore (ATKR) attempted breakouts in weak volume.
Stocks held up even as Treasury yields spiked following mixed economic data. The 10-year yield rose 13 basis point to 3.84% while the two-year yield vaulted 14 basis points to 4.86%, making the yield curve more inverted.
The rise in yields came as first-time jobless claims unexpectedly dropped to 239,000 vs. 264,000 in the previous week, Labor Department data showed. Analysts had expected them to rise to 270,000. The labor market continues to look strong.
The Commerce Department’s final estimate of first-quarter GDP rose to 2%, higher than the 1.4% economists expected. Consumer spending rose 4.2%, the highest quarterly pace since Q2 of 2021. This is a double-edged sword, for while the economy remains resilient it also strengthens the case for further tightening by the Fed.
Meanwhile, the latest personal consumption expenditures index data is due tomorrow. This (particularly the core measurement) is the Fed’s favored inflation gauge.
Nasdaq Lags As Small Caps Pop On Bank Boost
The Nasdaq lagged the other major indexes but fought its way out of negative territory to close flat. Micron (MU) trailed most as it fell 4.1% following its earnings report.
The benchmark S&P 500 muscled its way to a 0.5% gain. Wells Fargo (WFC) was a top performer here as it jumped 4.5%.
The S&P 500 sectors closed mixed, with a bias to the upside. Financials and materials were the top performers. Communication services and consumer staples lagged the most.
Small caps were benefiting from a rally among bank stocks after the Federal Reserve said top lenders had performed well in its latest stress test. The Russell 2000 ended the session up 1.2%.
Growth stocks also made a slight gain, with the Innovator IBD 50 ETF (FFTY) rising 0.4%.
Dow Jones Today: JP Morgan, Goldman Sachs Lead Index Higher
The Dow Jones Industrial Average did the best out of the major indexes. It ended the session up nearly 300 points, or 0.8%.
It was also bolstered by the performance of financial stocks.
JPMorgan Chase (JPM) was the top Dow performer, rising 3.5%. It was followed closely by Goldman Sachs (GS), which popped 3%.
Visa also had a solid session with a 2.8% gain. Walgreens Boots Alliance (WBA) struggled most on the Dow Jones today as it fell 2.4%, with Intel (INTC) also lagging.
Cathie Wood Buys Chip Stocks, Sells Tesla
Investors are always keen to keep track of top fund managers.
Ark Invest head Cathie Wood snapped up a couple of chip stocks as she sold more Tesla yesterday.
She bought 6,542 shares in Taiwan Semiconductor (TSM) and 4,576 in Advanced Micro Devices (AMD) for her ARK Autonomous Technology & Robotics ETF (ARKQ).
TSM stock has receded toward a 98.98 buy point and was little changed Thursday. AMD stock came close to round-tripping sizable gains from a cup-base entry of 102.43, but is currently extended.
Meanwhile, Wood sold 17,967 shares of Tesla stock from her ARKQ fund and a further 10,401 from her ARK Next Generation Internet ETF (ARKW).
Wood has dumped more than 500,000 shares of the EV stock across her various funds this month.
Futures: Rate-Hike Odds Rise With Inflation Data Due; Apple Eyes $3 Trillion
Warren Buffett Raises OXY Stake
Warren Buffett has not been shy about raising his energy holdings over the past year.
And he’s at it again. His Berkshire Hathaway snapped up 2.1 million shares of oil stock Occidental Petroleum from June 26 to June 28, an SEC filing showed.
This helped boost OXY stock. It popped 1.8% Thursday, moving back above the 21-day exponential moving average in the process. Nevertheless, Occidental remains stuck in a longer-term downtrend and sits below its falling 50-day line.
Berkshire Hathaway stock closed the day up 0.8%. It is in a buy zone above a cup-with-handle entry of 331.84, MarketSmith analysis shows.
Outside Dow Jones: 3 Stocks Test Entries
Rambus cleared a trendline entry near 61 amid enthusiasm for the chip stock. RMBS stock has been a mighty performer so far in 2023, rising more than 80%.
Overall performance is strong, and its IBD Composite Rating is a perfect 99. The stock won a spot on the prestigious IBD Leaderboard list of top stocks amid the move.
Medical research play Medpace is in a buy zone after clearing a cup-with-handle entry of 231.63. It finished up 2.6%. MEDP stock has an EPS Rating of 99, while price performance is also strong.
Atkore cleared a cup-base buy point of 154.86 on its weekly chart, ending the session up 2%. This is an early-stage base, which means it has a better chance of success. Atkore is in the top 6% of stocks in terms of price performance over the past 12 months.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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