The Dow Jones Industrial Average charged higher as the stock market ended a three-week losing streak. Tesla (TSLA) jumped as Elon Musk eyes a new facility. Warren Buffett stock RH (RH) surged on results. Apple (AAPL) closed in on a key benchmark.
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A number of stocks passed buy points. Palo Alto Networks (PANW) passed an early entry while Archer-Daniels-Midland (ADM) and Burger King parent Restaurant Brands (QSR) attempted breakouts.
Volume was mixed, running higher on the Nasdaq but slipping on the New York Stock Exchange according to early data.
The yield on the benchmark 10-year Treasury note edged three basis points higher to 3.32%. West Texas Intermediate crude oil rose nearly 3% to more than $86 per barrel.
Positive signs for the economy helped the market shake off hawkish noises from some senior Federal Reserve officials, according to Oanda senior market analyst Edward Moya.
“Economists are slightly lowering their inflation forecasts and that could mean the Fed won’t have to take rates above 4%,” he said in a note to clients. “Another round of hawkish speak from both the Fed’s Bullard and Waller was not able to derail today’s stock market rally.”
Nasdaq Leads As Small Caps Shine
The Nasdaq fared best out of the major indexes as it rose 2.1%. Cybersecurity stock Zscaler (ZS) was a top performer here, rocketing nearly 22% on earnings.
The S&P 500 also muscled higher, popping 1.5% and rising back above its 50-day line. Dish Network (DISH) impressed here as it rose 8.6%.
The S&P 500 sectors were all positive, with communication services, technology and energy the best gainers. The defensive utilities area lagged.
Small caps shined, with the Russell 2000 up ending the session up 2%.
The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, also impressed, rising 1.9%.
Dow Jones Today: Apple Stock Gains As Salesforce Leads
The Dow Jones industrials lagged the other major indexes but still rose almost 400 points, or 1.2%.
Key component Apple stock is closing in on the key 50-day moving average after gaining 1.9%. It remains well shy of a handle entry of 176.25.
Earlier this week, the company announced its iPhone 14 smartphone family at a media event titled “Far Out.”
But it was Salesforce (CRM) that was the star of the Dow Jones today as it rose 3.6%. Caterpillar (CAT) also impressed as it gained 3.5%.
Tesla Stock Gains As Elon Musk Eyes Move
Tesla stock got a boost on the news it is considering building a lithium processing facility in Texas. The electric-vehicle giant, which is led by Elon Musk, is looking into a facility to refine lithium hydroxide on the Gulf Coast of Texas.
If the project is approved, Tesla says it could start construction by the fourth quarter, with commercial production beginning by the end of 2024.
Tesla stock has formed a consolidation with a 402.73 buy point, according to MarketSmith analysis. It remains a long way from its entry but popped 3.6% for the day.
Adventurous investors may choose to use the retaking of the 200-day line Friday as an entry, though this would be a very aggressive move.
Elon Musk also revealed in a tweet that he has had some “promising conversations” with iPhone giant Apple about using SpaceX’s Starlink system for connectivity.
Warren Buffett Stocks Pops On Earnings
RH, formerly known as Restoration Hardware, jumped following its latest earnings report. It ended the session up 4.4%.
Warren Buffett is a fan of the home furnishings retailer, with his firm Berkshire Hathaway (BRKB) currently holding more than 2 million shares.
The legendary investor has reason to smile after RH posted an earnings report that surpassed Wall Street expectations. EPS of $8.08 came in well above analyst views, while revenue of $992 million also beat.
It wasn’t all good news though, as the firm said it expects Q3 net revenue to be down 15% to 18%. The firm’s CEO, Gary Friedman, said that the economy is now in a recession.
“Anybody who thinks we’re not in a recession is crazy,” Friedman said during the conference call.
Outside Dow Jones: New Leader Passes Entry
With the market rally gaining steam once more, now is a time to be looking for actionable stocks.
Palo Alto Networks popped above a trendline entry near 560. It is also eyeing a higher cup-with-handle buy point of 578.89.
The stock won promotion to the IBD Leaderboard list of top stocks following its bullish move. It rallied in sympathy with rival Zscaler (ZS).
Food processing giant Archer-Daniels-Midland broke past a cup-with-handle entry of 91.54, though it closed just below the entry. This is a third-stage base, which means gains from the next breakout could be limited.
The relative strength line has been moving higher even as the stock formed its handle, a bullish sign. The stock is in the top 6% of stocks in terms of price performance over the past 12 months, while earnings growth has also been strong. Analysts see profits ballooning by 31% in 2022, according to MarketSmith data.
Burger King parent Restaurant Brands tested a cup-with-handle buy point of 61.19, coming within a few pennies of passing the entry. It closed within touching distance, so is one to watch.
The restaurant chain is in the top 11% of stocks in terms of price performance over the past 12 months. It holds a strong Composite Rating of 95.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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