The Dow Jones Industrial Average gained as stocks fought back Thursday. Tesla (TSLA) took a dive after the investor day event fell flat. Warren Buffett Stocks Snowflake (SNOW) tumbled while crypto bank Silvergate capital (SI) cratered.
A lone stock dared to attempt a breakaway amid the challenging wider action. Builders FirstSource (BLDR) managed to clear a buy point after flipping higher.
Equities attempted to recover after being pressured by the continued strong labor market. Initial weekly jobless claims surprisingly fell to 190,000 versus 192,000 in the previous week. They were expected to rise to 200,000.
This raised fears that the Federal Reserve could raise interest rates higher for a longer period of time. But shares fought back amid reports Raphael Bostic, president of the Federal Reserve Bank of Atlanta, who is not a voting member, said the central bank could be able to stop tightening by mid-summer.
Nasdaq Turns Higher, IBD 50 Delays
The market’s current uptrend remains under pressure, but stocks attempted to show some resilience on Thursday.
The Nasdaq fought its way out of the red, gaining 0.4%. Dexcom (DXCM), a leader in the market for continuous glucose monitoring devices for diabetes patients, performed well with a gain of nearly 8%.
The S&P 500 was also higher, up 0.5%. Take-Two interactive software (TTWO) did well here.
The S&P 500 sectors were mostly positive. Utilities and consumer staples outperformed, while financials lagged.
Small caps managed to fight back, while the Russell 2000 rose fractionally. Growth stocks struggled, however, with the Innovator IBD 50 ETF (FFTY) falling more than 1%.
Dow Jones Today: Salesforce Stock Rockets
The Dow Jones Industrial Average was the strongest major index all day. It was up nearly 300 points, or 0.8%.
The blue chip barometer received a significant boost from Salesforce’s performance. It broke out of a cup-with-handle base to top an entry of 178.94 in strong volume after beating Q4 views. It continues to rise about 12%.
The Dow Jones component has been targeted by activist investors Elliott Management, Starboard Value, Third Point and others to improve profit margins. The stock is on track for the biggest percentage increase since August 2020.
JPMorgan Chase (JPM) was the biggest underperformer among the Dow Jones Industrials, falling more than 1%.
Tesla shares slammed as Investor Day falls flat
One stock that struggled to make a comeback was Tesla. It received a bludgeon after investor day fell short of expectations.
Investors were disappointed after the company failed to unveil a next-generation electric car, while CEO Elon Musk declined to answer a question about new products.
One analyst who keeps the faith is Morgan Stanley’s Adam Jonas. He was impressed with the company’s aim to offer lower-cost electric vehicles, saying that “bold vertical integration efforts are about to pay off.”
“In a race to the bottom, we seriously wonder how the competition can keep up,” the analyst, who rates TSLA as overweight with a target of 220, said in a note to clients.
Still, analysts were not very impressed with Tesla’s presentation and reacted with mixed reactions.
Tesla shares fell more than 6%, losing ground on the 200-day moving average.
Warren Buffett stock diving
Even the biggest investors can suffer painful losses. And this was the case for Warren Buffett after Snowflake dove Thursday.
It was hammered despite beating Wall Street views for both revenue and sales in its latest quarterly report.
It was penalized after current quarter revenue guidance fell below analysts’ expectations.
Snowflake also announced a $2 billion share repurchase program.
Former Leaderboard stock fell nearly 9% heading into the close. It was below the 50-day moving average, a sell signal.
Berkshire Hathaway (BRKB), led by Warren Buffett, owns more than six million shares of SNOW.
Crypto Bank Silvergate Head Craters
Crypto lending bank Silvergate Capital was decimated in the stock market today, falling more than 50%. It is feared that it will eventually go bankrupt.
It was hammered after the company revealed it would miss its March 16 filing deadline. This is in addition to the late submission of the annual reports.
Silvergate said it needs more time to complete certain audit procedures. It also said it is “analyzing certain regulatory and other investigations and investigations”.
The company also disclosed that it will likely miss an interest payment on Series A preferred stock, equivalent to a return of more than 5.3%.
It has been badly damaged by the fallout from the FTX scandal as deposits were low in the fourth quarter.
A slew of companies including Coin base (COIN), no longer accept or initiate payments to or from Silvergate.
The company was formerly a small community bank before entering the cryptocurrency space in an effort to chase growth.
The shares are down about 97% from their all-time high of 219.75, which they hit in November 2021.
Outside of Dow Jones: Builders FirstSource test point of sale
While pimples were hard to find, one brave customer tested an entry.
Builders FirstSource is trading in a buy zone after clearing a consolidation pattern entry of 86.58.
The relative strength line has just reached new highs, a bullish sign. The overall performance is very strong, earning it an IBD Composite Rating of 95 out of 99.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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