Dow Jones up as stocks struggle; New Cathie Wood Buy rockets on this; Bitcoin Falls Investors Business Daily
The Dow Jones Industrial Average squeezed out a small rally as stocks struggled. New Cathie Wood purchase Twilio (TWLO) soared after the firm announced a layoff. Coin base (COIN) and Riot Blockchain (RIOT) was mixed as Bitcoin fell below a key level. Starbucks (SBUX) bounced.
Meanwhile, a trio of energy stocks flashed bullish signals. Devon energy (DVN), ConocoPhillips (COP) and Northern Oil & Gas (NOG) offered all purchase options.
X
Volume was lower on Nasdaq and the New York Stock Exchange, according to early data.
The interest rate on the benchmark index for 10-year government bonds fell one basis point to 3.41%. West Texas Intermediate crude rose nearly 2% to trade at nearly $89 a barrel.
Stocks in general struggled to make decisive gains after new inflation data. The PPI, which measures wholesale inflation, showed that producer prices fell 0.1% in August compared to the previous month. This was in line with expectations. Wholesale inflation rose 8.7% from a year ago, down from July’s 9.8% increase and matching Econoday estimates.
Nasdaq Up As IBD 50 Shines
The Nasdaq, which was toppled on Tuesday, was the best performer of the major indexes. It turned higher but closed off session highs as it rose 0.7%. Modern (MRNA) was a top performer as it rose 6.2%.
The S&P 500 also made a comeback as it ended the day up 0.3%. Nucor (NUE) plunged 11.3% on disappointing guidance.
S&P 500 sectors were mixed, with energy and consumer confidence the best performers. Property lagged behind the most.
Small caps floundered, but the Russell 2000 eventually managed to squeeze out a 0.3% gain.
Innovator IBD 50 ETF (FFTY) did well due to solid energy exposure. It ended the day up 2.2%.
Dow Jones Today: Chevron Stock, JNJ Lead
The Dow Jones Industrial Average posted some gains, but closed off lows as it rose 0.1%.
Chevron (CVX) was the best performer as energy stocks performed well. The CVX share ended the session up 2.4%.
It just stopped Johnson & Johnson (JNJ), which posted a gain of 2.1%. It was boosted after the firm announced it will buy back up to $5 billion in shares.
Honeywell International (HON) had the worst. The aviation bet was almost down in the session as it fell 2.7%.
Cathie Wood: Twilio Stock Jumps On Cull
Cathie Wood was active in the stock market on Tuesday, adding shares to the holdings of the ARK Innovation ETF (ARKK) even as other investors headed for the exits.
Among the moves, she picked up just over 47,000 shares of Twilio, a purchase that immediately paid off after the stock fell 10% today.
TWLO stock soared after the firm disclosed in an SEC filing that it is laying off 11% of its workforce. The news was cheered by investors.
With the new additional shares, ARKK now has a total of 4,321,544 shares in Twilio stock.
Wood also added to her stock of TuSimple (TSP) and DraftKings (DKNG), where both jump around 6%.
Not all of the famous investor’s Tuesday purchases made such bullish moves, however.
Roku (ROKU) and UiPath (PATH) managed to pull out of the red, but squeezed out marginal gains. Both shares are still below their large moving averages.
The ARK Innovation ETF, which is the signature fund of Cathie Wood, is still down more than 55% so far this year.
Starbucks stock boils above key guidance level
Starbucks shares rose after the firm raised its guidance late Tuesday. It ended the session up 5.5%, close to the day’s high.
SBUX was boosted after outgoing CEO Howard Schultz said the firm expects double-digit growth for revenue and EPS.
It expects earnings per share to grow 15% to 20% annually over the next three years. This was higher than previous guidance. It also offered an improved outlook for global and US same-store sales growth.
Starbucks stock rallied nicely on the news, once again clearing its key 200-day moving average.
Nevertheless, SBUX has a lot of work to do to recoup its losses in 2022, as it is still down more than 20% for the year.
Coinbase shares rise as Bitcoin reverses
Coinbase managed to finish the session strong. It held most of its gains as it rose 4.6%. However, the volume was lower.
The stock, which cut its full-year forecast last month, pulled further away from its moving 50-day moving average. COIN shares are down more than 69% since the start of 2022.
Bitcoin fell below the key $20,000 barrier after reversing lower. It was down nearly 2% in the last 24 hours, according to CoinDesk.
Other cryptocurrency games fell. Grayscale Bitcoin Trust (GBTC) fell 2%, as Bitcoin mining plays Riot Blockchain (RIOT) lost 0.9%.
What to do now when the market tries to come back
Outside the Dow Jones: Three energy stocks are flashing buy signals
A trio of impressive energy stocks made bullish moves on Wednesday.
Devon Energy offered a buying opportunity after it cleared an early entry as well as Monday’s high of 71.57. It also looks at a buy point at 75.37 cup with handle.
In four of the last five quarters, Devon has produced triple-digit revenue growth. Over the past three years, the company has generated an annual average sales growth of 26%.
DVN saw exposure elevated on the prestigious IBD Leaderboard list today. Devon Energy is also a favorite of celebrity investment guru Jim Cramer.
ConocoPhillips is also active after it cleared a cup-with-handle entry of 115.57.
Strong all-around performance is reflected in an IBD Composite Rating of 99. But this is a later, fourth-stage base, which means extra caution is required.
Northern Oil & Gas is also in a buy zone above a cup-with-handle entry at 33.60.
The share is among the top 4% of shares in terms of price development over the last 12 months.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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