The Dow Jones Industrial Average recovered Microsoft (MSFT) rose on a merger report. Tesla (TSLA) fell after CEO Elon Musk mocked a prominent investor for shorting the stock. oracle (ORCL) followed an analyst call while the company reported an increase in earnings.
Meanwhile, a trio of big names attempted a breakout. intapp (INTA), WW Grainger (GWW) and biogenic (BIIB) all tested purchase points.
Government bond yields fell. The 10-year yield fell 1 basis point to 3.74%, while the 2-year yield fell 3 basis points to 4.57%. The yield curve remains inverted.
“The upleg in the bull market doesn't seem to be stopping, which means Wall Street seems confident the Fed won't make its 11th straight rate hike this week,” Edward Moya, senior market analyst at Oanda, said in a statement Notice to Customers.
Nasdaq, IBD 50 roar
The Nasdaq significantly outperformed the other major indices, closing up 1.5%. Broadcom (AVGO) and Airbnb (ABNB) were strong here, up 6.3% and 5.7% respectively.
The benchmark S&P 500 also gained, rising 0.9% to close at its highest level since April 2022. carnival (CCL) rose nearly 13% after two upbeat Wall Street calls.
According to initial data, volume was higher on both the Nasdaq and NYSE. This is a bullish sign.
S&P 500 sectors ended on a mixed bullish note. Technology and consumer discretionary were the best performers, while utilities and energy were the worst performers.
Small caps were up slightly, with the Russell 2000 up 0.4%. Growth stocks performed brilliantly, with the innovator IBD 50 ETF (FFTY) up 1.5%.
Dow Jones today: Microsoft rises in merger report
The rally in the Dow Jones Industrial Average gained momentum towards the end. It ended the day up 190 points, or 0.6%.
Microsoft stock ended the session up 1.6% after a Wall Street Journal report said the Federal Trade Commission will block the video game giant's proposed acquisition Activision Blizzard (ATVI).
Citing a person familiar with the matter, the WSJ said the FTC will file an injunction in federal court to prevent the deal from going through. It had already sued to prevent the merger.
This is just the latest snag for the proposed deal, as the UK's Competition and Markets Authority previously decided to block the merger, despite an appeal.
However, MSFT wasn't the strongest performer on the Dow Jones today. intel (INTC) led the uptrend with a 5.5% gain Boeing (BA) rose 2%.
Boeing is the IBD stock of the day after making an entry of 221.33. It was added to SwingTrader on Thursday.
chevrons (CVX) was the worst-performing Dow index, down 1%. Leaderboard Share Foreclosure (CRM) also lagged, down 0.8%.
Tesla shares soar after Elon Musk mocks short sellers
Tesla is experiencing its best winning streak in history. According to Dow Jones Market Data, the stock has now risen for 12 straight days, posting a gain of more than 35% over that period. It's Tesla's longest winning streak and best 12-day streak since February 2023, when the company posted a 36.3% gain.
Tesla CEO Musk has never been a fan of short sellers. And he couldn't help but poke fun at famed investor Bill Miller on Twitter.
Musk posted a laughing face emoji in response to a January video in which the former hedge fund manager revealed a short position in the automaker.
“If it goes up, I'm going to short some more,” Miller said in the video, in which he also said the electric giant was “losing market share now.”
It would have been an expensive deal if he had kept his word. At the time, he claimed Tesla wasn't “worth $380 billion.” In fact, the current market cap has now increased to $778 billion.
Tesla stock, which is currently an IBD leaderboard member, ended the session up 2.2%. It has expanded well from an entry level of 207.79 and is now up 131% since the start of 2023.
Oracle results beat after stock surges on bullish forecasts
Oracle beat earnings forecasts after the market close. The ORCL share had already jumped ahead of the report after an optimistic analyst statement.
Wolfe rated ORCL better than its peers, citing “accelerated revenue growth and margin expansion.” It called for margins to return to the mid 40 percent range in good time. His price target is 130.
The upgrade sent the stock higher, with Oracle ending the session up 6%. ORCL is up 39% so far in 2023.
JPMorgan also raised its Oracle target price to 109 ahead of the report. The company maintained its buy rating.
Oracle's earnings per share came in ahead of expectations at $1.67, while revenue also came in ahead of expectations at $13.84 billion. This sent ORCL stock even higher in extended trading.
“Annual revenue growth was driven by our cloud applications and infrastructure businesses,” said Safra Catz, Oracle's CEO, in a press release. “Both of our strategic cloud businesses are getting bigger – and growing faster. This bodes well for another strong year in fiscal 2024.”
According to Zacks Investment Research, earnings per share were expected to rise 3% to $1.58. Revenue rose 16% to $3.74 billion. That would be possible on the basis of 18% revenue growth for three consecutive quarters.
Oracle has shown impressive relative strength since breaking out of a late March entry of 91.22. ORCL stock has made excellent progress since then, finding support at the 21-day exponential moving average.
It has also been reported that Oracle has invested in AI startup Cohere, which has also attracted investment Nvidia (NVDA).
Outside of Dow Jones: 3 stock test entries
With the market in a confirmed uptrend, this is an ideal time to keep an eye on any breakouts.
Integration Appliance, better known as Intapp, is in a buy zone after breaking a consolidation pattern buy point of 47.04, analysis by MarketSmith shows. This is a first level pattern for the financial software stock, a plus.
The relative strength line also reached new heights. The overall strong performance has earned INTA an IBD Composite Rating of 96 out of 99.
WW Grainger is also vulnerable after overcoming a flat base. The ideal entry point here is 709.21. A particular strength of the building materials sector is earnings, with an EPS rating of a whopping 96 out of 99.
Biogen should be watched after briefly surmounting a flat entry of 319.74. It is now back below the buy point. Overall performance is strong but not ideal, as reflected in the IBD Composite score of 87.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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