by The Dow Jones Industrial Average rose as stocks moved higher on 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.
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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 recovered impressively after being squeezed 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 stocks 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.
The yield on the benchmark 10-year Treasury bill rose seven basis points to 4.06%. Oil rose slowly, with West Texas Intermediate crude gaining fractionally to trade at only about $78 a barrel.
Nasdaq Turns Higher, IBD 50 Delays
The current market uptrend remains under pressure, but stocks showed some resilience on Thursday.
The Nasdaq fought its way out of the red and posted a 0.7% gain. Dexcom (DXCM), a leader in the market for continuous glucose monitoring devices for diabetics, performed well with a gain of 9.5%.
The S&P 500 was also higher, up 0.5%. Take-Two interactive software (TTWO) performed well here, rising 6.1%.
The S&P 500 sectors were mostly positive. Utilities and technology outperformed, while financials lagged.
Small caps managed to fight back, with the Russell 2000 up 0.2%. Growth stocks managed to enter positive territory late, with the Innovator IBD 50 ETF (FFTY) gaining 0.1%.
Dow Jones Today: Salesforce Stock Rockets
The Dow Jones Industrial Average was the strongest major index all day. It reached close, gaining more than 300 points, or 1.1%.
The blue chip barometer received a significant boost from the performance of Sales team (CRM). It broke from a cup-with-handle base to top an entry of 178.94 in strong volume after beating Q4 views. It ended the session up 11.5%. The stock experienced the largest percentage increase since August 2020.
Intel (INTC) and Boeing (BA) also performed well, rising 3.4% and 2.7% respectively.
JPMorgan Chase (JPM) was the biggest underperformer among the Dow Jones Industrials, falling 1%.
Market Rally Phases Bullish Comeback; AI stock rises late
Tesla shares slammed as Investor Day falls flat
One stock that failed to make a comeback was Tesla, which underperformed on the S&P 500. It took a bludgeon after investor day fell short of expectations.
Investors were disappointed after the company failed to unveil a next-generation electric car, with CEO Elon Musk refusing 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 stock plummeted 5.9%, losing ground on its 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.
The stock was hammered despite beating Wall Street views for both revenue and sales in its latest quarterly report. Revenue guidance for the current quarter was below analyst expectations.
Snowflake also announced a $2 billion share repurchase program. The former Leaderboard stock ended the session with an eye-watering 12.4%. It was below the 50-day moving average, a sell signal.
Berkshire Hathaway (BRKB), led by Warren Buffett, owns more than 6 million SNOW shares.
Crypto Bank Silvergate Head Craters
Crypto lending bank Silvergate Capital was decimated in the stock market today, falling 57.7%. There are fears it may eventually go bankrupt after the company revealed it would miss its March 16 filing deadline. This is in addition to the fact that the annual submission of the annual reports is already late.
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 is likely to miss an interest payment on Series A preferred stock, equivalent to a return of more than 5.3%. The crypto bank 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 stock is down more than 97% from its all-time high of 219.75, which it reached in November 2021.
Outside of Dow Jones: Builders FirstSource test point of purchase
Although pimples were hard to find, one brave customer tested an entry.
Builders FirstSource is trading in a buy zone after clearing an 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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