The Dow Jones Industrial Average rallied out of the red as the stock market tried to find its footing. New Warren Buffett stock HP exploded higher on the news Berkshire Hathaway has taken a big stake while Tesla raced into the green ahead of its Cyber Rodeo event.
A couple of stocks attempted breakouts despite the mixed action. O'Reilly Automotive and W.W. Grainger both tested buy points.
Volume was lower on both the New York Stock Exchange and the Nasdaq compared with the same time Wednesday.
Meanwhile, the yield on the benchmark 10-year Treasury note rose five basis points to 2.66%. Oil was virtually flat, with West Texas Intermediate crude closing 0.2% lower to $96.03 a barrel.
St. Louis Fed President James Bullard warned Thursday the Federal Reserve is "behind the curve" on interest rates. He suggested the central bank needs to raise its short-term borrowing rate to about 3.5%. Bullard is seen as one of the most hawkish members of the Federal Open Market Committee.
Nasdaq Lags As Growth Stocks Battle Back
The tech-heavy Nasdaq fought its way out of negative territory as it made a stand following the previous day's painful session. It was up 0.3%. Costco Wholesale was shining as it rose 4%.
The S&P 500 was faring best out of the major indexes as it gained 0.6%. Lamb Weston was among the best performers, with a gain of nearly 8%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34635.51 | +139.00 | +0.40 |
| S&P 500 | (0S&P5) | 4508.98 | +27.83 | +0.62 |
| Nasdaq | (0NDQC ) | 13926.79 | +37.97 | +0.27 |
| Russell 2000 | 199.39 | -0.72 | -0.36 | |
| IBD 50 | 36.94 | +0.24 | +0.65 | |
Last Update: 3:04 PM ET 4/7/2022 |
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A slight majority of the S&P sectors were in the green. Health and technology were the best performers. Communication services and real estate were the worst laggards.
Small caps were still trading lower, with the Russell 2000 falling 0.4%.
Growth stocks also managed to rebound. The Innovator IBD 50 ETF, a bellwether for growth stocks, rose 0.7%.
Dow Jones Gains As Merck Stock Leads
The Dow Jones Industrial Average also managed to battle its way out of the red, rising 0.4%.
Merck fared best in the Dow with a gain of more than 2%, while Home Depot followed closely behind.
Visa was the worst performer, falling nearly 1%. Goldman Sachs and Boeing were among the other major laggards.
New Warren Buffett Stock Rockets Higher
HP stock shot higher on the news it is the newest Warren Buffett stock. It powered more than 15% higher in huge volume, though it backed off session highs.
The Oracle of Omaha's company, Berkshire Hathaway, has snapped up nearly 121 million shares in the computer hardware maker. This equates to about 11% of the firm's shares, and was worth about $4.2 billion based on its closing price Wednesday.
Some analysts see the move as a classic value investing play in a low- to no-growth business.
Nevertheless, HPQ stock holds a strong EPS Rating of 93. In addition, Wall Street expects EPS to grow 13% in 2022 and 6% in 2023. With working from home now an established facet of life, there is also potential for upside surprises.
HPQ's parabolic move saw it rise back into its old buy zone from a double-bottom base. The entry was 39.17, but a breakout attempt previously failed.
Berkshire Hathaway was fractionally positive heading into the close. The diversified conglomerate managed to rally out of the red.
Tesla Stock Revs Up Amid Cyber Rodeo
Tesla was whipsawing ahead of its Cyber Rodeo event in Texas. The stock was up just over 1%, though it did manage to reverse higher after earlier falling. The company's Austin-based Gigafactory Texas opened today. This marks the start of Model Y production with a larger battery.
Electrek reported that two versions of Tesla's much-hyped Cybertruck were seen at the factory, as well as some unidentified vehicles. Tesla is a member of the prestigious IBD Leaderboard list of top stocks.
Meanwhile, Tesla CEO Elon Musk saw his Twitter stock lose some value as it fell more than 6%. This made Twitter one of the worst performers on the S&P 500.
Market Holds Key Support, For Now; Tesla 'Cyber Rodeo' On Tap
These Stocks Test Buy Points
O'Reilly Automotive is sitting in its buy zone after breaking out of a cup base, according to MarketSmith analysis. The ideal buy point here is 710.96, seen best in the weekly chart.
The Missouri-based firm operates upward of 5,500 auto parts stores across the U.S. It has been holding above the 50-day moving average in recent weeks and its RS line is spiking near highs.
A possible near-term catalyst for the firm is Q1 earnings, which are expected April 27. Analysts expect the company to earn $7.45 per share, which is nearly 6% higher than the $7.06 per share it reported in the same quarter last year.
Industrial supply stock W.W. Grainger came within a hair of breaking out of a flat base. The ideal buy point is 527.16. It is worth keeping an eye on in case it can make further progress.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
