The Dow Jones Industrial Average fell, but the Nasdaq and the S&P 500 gained after President Joe Biden unveiled new tax hikes. Tesla was soaring on stock split news despite a Covid shutdown in China. Microsoft was a top blue chip while Walmart also impressed. AMC Entertainment stock exploded higher.
A number of stocks attempted breakouts despite the challenging market action. Vertex Pharmaceuticals, Brown & Brown and Murphy USA all tested buy points.
Volume was lower on both the New York Stock Exchange and the Nasdaq.
Meanwhile, the yield on the benchmark 10-year Treasury note held steady at 2.47%. Oil fell sharply, with West Texas Intermediate crude down around 7% to about $106 per barrel.
Biden Budget Includes Bitter Business Pill
President Biden unveiled his 2023 federal budget Monday and it was far from business friendly.
To help fund the lavish $5.8 trillion package, he is looking to raise the corporate tax rate to 28% from the current rate of 21%.
A so-called Billionaire's Minimum Tax also takes aim at the rich. It aims to levy a 20% minimum tax on the top 0.01% of earners as well as households worth over $100 million.
In addition, the proposed budget also aims to cut some tax breaks for oil and gas producers and processors.
The Biden administration is also seeking to raise spending on defense amid the ongoing Ukraine war. It is looking to increase military spending by around 4% to $813 billion in fiscal year 2023.
The budget also calls for $32 billion for domestic crime fighting, with more than $20.6 billion of this funneled to the Justice Department.
Nasdaq Gains As Tech Stocks Shine
The Nasdaq was faring best out of the major indexes amid strength in tech stocks. It rose 0.7%. Okta was a top performer here, rising nearly 8%
The broader S&P 500 managed to battle out of negative territory as it rose 0.2%. Carnival was shining on this index thanks to a gain of nearly 5%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34786.78 | -74.46 | -0.21 |
| S&P 500 | (0S&P5) | 4553.68 | +10.62 | +0.23 |
| Nasdaq | (0NDQC ) | 14273.60 | +104.30 | +0.74 |
| Russell 2000 | 204.75 | -1.37 | -0.66 | |
| IBD 50 | 39.50 | -0.09 | -0.23 | |
Last Update: 2:54 PM ET 3/28/2022 |
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The S&P sectors were having mixed luck. Technology and consumer discretionary were faring best while financials and energy made the worst losses.
Small caps were bitten by the bears, with the Russell 2000 falling 0.7%.
Growth stocks also struggled. The Innovator IBD 50 ETF, a bellwether for growth stocks, gave up 0.2%.
Dow Jones Falls As Microsoft Stock Pops
The Dow Jones Industrial Average was struggling amid uncertain action. It gave up around 100 points, or 0.2%.
Microsoft was one of the top components after popping almost 2%. The Leaderboard stock is now trying to pull away from the key 200-day moving average.
Big Money has been buying the stock of late as it offers strong all-around performance.
Walmart was also shining on the blue chip index as it followed hot on Microsoft's heels. Chevron fared worst amid falling oil prices. It dipped nearly 2%.
Tesla Stock Soars On Stock Split Despite Covid Shutdown
Tesla stock was soaring after the firm rolled out plans for a potential stock split. It rose nearly 2% and pulled away from its 50-day line. It is shooting for a cup entry of 1208.10.
The EV maker said in an 8-K filing with the Securities & Exchange Commission it plans to make the move so it can pay a dividend to shareholders. The company's annual meeting, where shareholders will get their say on the idea, will likely take place around October.
The last time the firm split its stock was in August 2020. Since the 5-to-1 split Tesla stock has more than doubled.
Wedbush analyst Daniel Ives said the move was to be expected, given robust electric-vehicle demand and the company's buildout of its Berlin and Austin plants.
The enthusiasm over the move dulled reaction to the fact Tesla China has halted production due to another Covid spike, according to a Reuters report. Shanghai officials are locking down the financial hub for four days to carry out mass testing for the virus.
Tesla is a member of the prestigious IBD Leaderboard list of leading growth stocks.
AMC Stock Explodes
AMC stock surged nearly 30% after CEO Adam Aron told CNBC more acquisitions are on the way.
This comes after the firm, which is a movie theater chain turned meme stock, raised eyebrows after it acquired a 22% stake in Hycroft Mining.
Aron said the firm is going to look for "transformation M&A opportunity," but also said the firm will also "grow and improve our existing core theater business."
Despite its surge, AMC remains rooted below its 200-day moving average. It did spike in massive volume however.
Hycroft Mining also exploded, though its near 90% gain sees it trading for around 2.40. The stock's EPS Rating is a weak 46 out of 99.
These Stocks Pass Buy Points
Vertex Pharmaceuticals is currently trading under its entry after earlier passing a flat base buy point of 255.03, MarketSmith analysis shows.
The stock has seen its relative strength charge higher since late November, a positive sign for its breakout attempt.
It has a P-E ratio of 20, which is in line with the S&P 500. This is good, since high P-E stocks have been getting punished of late.
The Leaderboard stock is in the top 8% of stocks in terms of price performance over the past 12 months.
Brown & Brown is actionable after bursting past a flat base entry of 70.85. The RS has just hit a new high, another positive.
All-around performance is excellent while Big Money has been snapping up the insurance stock in recent weeks.
Murphy USA is trading a hair below its buy point after briefly passing a cup-with-handle entry of 195.78.
Earnings are a key strength for the gas station play. It boasts a near-perfect EPS Rating of 98.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
