Dow Jones rises as Nvidia clears entry; Cathi Wood invests in this stock despite its 28% decline
The Dow Jones Industrial Average reversed higher on Monday as a broad-based rally helped it overcome a decline in stocks by index constituents Boeing (Bachelor’s). while, Nvidia (NVDA) cleared a buy point while other Magnificent Seven shares rose apple (Apple) and Amazon.com (Amzn) rose. Cathie Wood, president of Ark Invest, acquired shares to dive.
Many other stocks were liquidating buy points amid the action. Diabetes play Dexcom (dxm) and Golub Capital (GBDC) Both inputs tested.
Nasdaq rises, small stocks jump
Indices are trying to get back into the fray after last week’s market tumble. Things got off to a positive start, with the Nasdaq Composite ending Monday’s session up 2.2%.
Advanced micro devices (AMD) was among the best-performing stocks on the Nasdaq, rising 5.5%. MarketSmith analysis shows that the market is now free of its short-term moving averages. Shares are back above the 20% gain zone from a 122.11 entry after Melius Research upgraded the stock to buy from hold.
The S&P 500 also flexed its muscles, rising 1.4%. American Airlines (AAL) was a star in the benchmark index, rising 7.2%. Morgan Stanley analyst Ravi Shanker upgraded AAL shares to ‘overweight’ from ‘equal weight’ and maintained a price target of 20.
Almost all sectors of the S&P 500 ended the session higher. Technology and consumer discretionary led the stock market’s bullish trend today. Energy was the only area that closed lower.
Small stocks also slapped the bears, with the Russell 2000 rising 1.7%. Growth stocks fared better, with the Innovator IBD 50 ETF (FFTY) up 2.9%.
Treasury yields closed lower. The 10-year Treasury note fell 3 basis points to 4.01% while the 30-year Treasury note fell 4 basis points to 4.16%. The yield on 5-year bonds also decreased by 4 points to 3.97%, while the yield on 2-year bonds decreased by 3 basis points to 4.36%.
Dow Jones Today: Boeing shares fall amid accident
The Dow Jones Industrial Average rose from negative territory to rise 217 points at the close. This equates to a profit of 0.6%.
The Dow Jones Index managed to shake off the negative movement caused by the decline in Boeing shares. British Airways closed at its lowest levels but was still down 8%. It fell after the Federal Aviation Administration ordered the 737 Max 9 to be temporarily grounded over the weekend.
It was reported Monday afternoon that inspections by United Airlines found loose bolts on several Boeing 737 MAX 9 planes following the FAA’s ruling.
The ruling came after part of the plane, a door seal, was torn off the side of an Alaska Airlines 737 plane mid-flight on Friday. Boeing stock found support at the 50-day line but fell below the 10-week moving average, triggering a sell signal.
The index received a boost from the strong performance of a number of its components. Sales force CRM shares jumped 3.9%. Intel Corporation (INTC) shares rose by 3.3%. Both stocks performed better in the Dow Jones today.
Seven Wonders: Nvidia Wipes Incomes, Apple Stock Gains
The so-called “Great Seven” also returned to winning ways on Monday after last week’s withdrawal.
Nvidia stock fared the best as the AI game jumped 6.4% and made a flat entry at 505.48. It is now located near the top of the buy zone. This comes after the company announced on Monday new graphics processors and software to run generative artificial intelligence applications on computers.
Leaderboard stock also got a boost after New Street named it a top pick for 2024. The upside is “significant” even if rival AMD’s bid for a $400 billion market for AI data center chips proves overly optimistic, the research firm said.
E-commerce giant Amazon.com (AMZN) was also strong as it rose 2.7%. It is trading above the buy zone from the entry level of 145.86.
Parent Apple and Google shares the alphabet (GOOGL) also made significant gains. AAPL stock rose 2.4% while GOOGL stock rose 2.3%.
Dow Jones stocks Microsoft (MSFT) and Meta platforms META gained 1.9%. Tesla (TSLA) rose 1.3%.
Three AI stocks are among the best-performing stocks in the S&P 500
Cathie Wood buys Palantir stock
Buying on the dip can be a risky strategy. But that wasn’t enough to scare off Cathie Wood, CEO of Ark Invest, who joined her Palantir Technologies (PLTR) shares on Friday.
Ark Invest’s flagship ARK Innovation ETF (ARKK) has acquired over 777,000 shares. Not only that, the ARK Next Generation Internet ETF (ARKW) bought nearly 154,000 shares. This paid off immediately, as PLTR ended the day up 4.4%.
Palantir is a data analytics software company that offers three platforms. Palantir Gotham is primarily used by government agencies while Palantir Metropolis is used for banks, financial services companies, and hedge funds. Finally, Palantir Foundry is used by corporate clients.
Her recent performance has been far from ideal. At its low on Friday when Ark bought the stock, it was down more than 28% from its recent high of 21.85. Overall performance remains good, with PLTR receiving a strong Composite Rating of 93 out of 99 from Investor’s Business Daily. It is among the top 5% of stocks in terms of price performance over the past 12 months.
Bargain hunting can be tempting for investors, but IBD recommends buying stocks with strong earnings and price performance rather than lagging stocks. Look for leaders in strong industries that are showing superior growth in profits and sales.
Meanwhile, Wood’s company also gave up more Coinbase International (Currency) Stocks. The cryptocurrency market had a remarkable performance in 2023, but is down 8.3% so far in 2024. Ark Invest also bought some shares in Iridium Communications (IRDM) for its fleet of ETFs.
Outside the Dow Jones: Diabetes stocks allow entry
With stocks back in rally mode, it’s time to track stocks that have broken out of the appropriate rules.
MarketSmith analysis shows that DexCom is trading in a buy zone after surpassing the cup-with-handle entry level at 126.37. It ended the session up 4.6%.
The stock jumped after the company reported preliminary fourth-quarter sales that were above expectations and announced a new continuous glucose monitoring device due this summer.
Golub Capital cleared a fixed entry base at 15.38. This is the rule of the first stage, and it is a bonus. The stock rose by 0.7% on Monday.
The investment management stock has a strong overall performance. Price performance is its weakest attribute, although it is still in the top 26% of issues in terms of price performance over the past 12 months.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin For further analysis of growth stocks.
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