The Dow Jones Industrial Average moved higher even as House Speaker Mike Johnson saw his plan to avert a government shutdown hit resistance. Famed investor Cathie Wood snapped up a plunging stock. Tesla rallied amid a Cybertruck move while other Magnificent Seven stocks such as Nvidia and Apple ended mixed.
A trio of noteworthy names attempted breakouts despite the mixed action. Leaderboard play The Sprott Uranium Miners ETF, PTC and Camtek all tested entries.
Stocks struggled early in the session after Moody's Investors Service on Friday cut its outlook on U.S. debt to negative from stable. The firm cited high budget deficits and political polarization as the reason for the move. While it retained its AAA rating on U.S. sovereign debt for now, future progress on these issues is key.
Johnson Debt Plan Hits Resistance
But there is already trouble emerging after new House Speaker Mike Johnson unveiled over the weekend a two-step plan to avert further government shutdowns. A Nov. 17 deadline now looms large.
"This two-step continuing resolution is a necessary bill to place House Republicans in the best position to fight for conservative victories," Johnson said. He also claimed the bill will stop the "absurd" tradition of "massive, loaded-up spending bills introduced right before the Christmas recess."
The stopgap bill would fund some agencies and programs until Jan. 19 and others until Feb. 2.
His proposal already faces opposition from a group of conservative lawmakers that includes Rep. Marjorie Taylor Greene, R-Ga., and Rep. Chip Roy, R-Texas.
And White House Press Secretary Karine Jean-Pierre said in a written statement that the proposal "is just a recipe for more Republican chaos and more shutdowns."
Yields were mixed. The 10-year Treasury note inched up 1 basis point to 4.64% while the 30-year rose 2 basis points to 4.75%. The five-year yield fell 1 basis point to 4.66% while the two-year dipped 3 basis points to 5.04%.
Nasdaq Falls As Growth Stocks Pop
The tech-heavy Nasdaq gave up slight ground, closing down 0.2%. Electric-vehicle stock Lucid outperformed with a 4.5% gain. Meanwhile, Warner Bros. Discovery fell 2.4% after Guggenheim analyst Michael Morris flagged worries over its lack of National Football League coverage.
The S&P 500 also dipped, slipping 0.1%. DaVita rallied 6.5%, though it remains well off recent highs.
The S&P 500 sectors finished the session mixed. Energy and health fared best on the stock market today. Real estate and utilities were the worst-performing areas.
Small caps closed nominally positive, with the Russell 2000 essentially flat. Growth stocks excelled, though, with the Innovator IBD 50 ETF jumping 0.7%.
Dow Jones Today: Boeing Stock Flies
The Dow Jones was the top performer out of the major indexes. Still, its gain of 55 points, or 0.2%, was modest.
Boeing topped the Dow, though it closed off session highs despite rising 4%. It was lifted after Emirates announced a $52 billion order for 95 Boeing aircraft.
The aerospace giant also got a boost from a Bloomberg report that China may end its commercial freeze on the purchase of Boeing 737 Max jets. The news emerged ahead of the meeting between U.S. President Joe Biden and China leader Xi Jinping at the Asia-Pacific Economic Cooperation in San Francisco this week.
On the flip side, Nike and Intel lagged the most on the Dow Jones today. Nike fell 1.8% while Intel gave up 1.6%,
Cathie Wood Snaps Up Trade Desk Stock After Plunge
Big-name investors often are brave enough to buy on the dip. And famed ARK Invest Chief Executive Cathie Wood certainly showed some courage as it was reported she snapped up a plunging digital ad firm.
Trade Desk fell by as much as 22% on Friday on a post-earnings crash. But that was not enough to stop Wood's ARK Innovation ETF from snapping up just shy of 543,000 shares of the company that same day. Third-quarter earnings and revenue edged Wall Street views, but the company's own outlook came in well below views.
TTD flashed a sell signal Friday by falling away from the 50-day line and plunging below the 200-day moving average, MarketSmith analysis shows. This is a distinctly bearish look. It ended Monday down 0.9%.
Wood's ARKK fund also recently picked up nearly 208,000 shares in Unity Software and sold about 712,000 shares of Leaderboard name DraftKings. Unity jumped 4.3% today while DraftKings rose 1.6%.
While raking around for bargains can be tempting, IBD recommends buying stocks with strong earnings and price performance rather than laggards. Look for leaders in strong industries that are showing superior earnings growth and sales.
Magnificent Seven: Tesla Stock Gains Amid Cybertruck Move
Tesla stock fared best out of the so-called "Magnificent Seven" stocks today. It was up after news that its Cybertruck order agreements now say that buyers cannot sell the vehicle within the first year of ownership without permission from the Elon Musk-led firm.
The document states that Tesla "may seek injunctive relief to prevent the transfer of title of the vehicle or demand liquidated damages from you in the amount of $50,000." It also said Tesla may opt to refuse to sell violators of the agreement any future vehicles.
TSLA stock closed near highs as it rose 4.2%. It managed to close back above its 200-day moving average, a positive sign. It now is up 107% for the year so far.
Nvidia was another of the Magnificent Seven stocks having a solid session. It rose 0.6%. It gained amid the unveiling of its H200 AI chip. The chip can generate output at almost double the speed of its current H100 chip. NVDA shares currently trade in a buy zone above a double-bottom entry of 476.09, MarketSmith analysis shows.
Meta Platforms rose 0.1%, but other Magnificent Seven stocks were lower. Microsoft and Apple lagged the most with near-1% dips. AAPL is well shy of a 198.23 entry while MSFT is in a buy zone above a 366.78 entry. Also, Amazon.com fell 0.7% while Google parent Alphabet skidded 0.4%.
Outside Dow Jones: Three Stocks Test Entries
With the market in a confirmed uptrend, investors should be looking out for breakouts.
The Sprott Uranium Miners ETF is just below its buy point after earlier testing a cup-with-handle entry of 47.77. URNM is in the top 4% of issues in terms of stock market performance over the past 12 months. It is also a member of the prestigious IBD Leaderboard list.
Also, PTC stock is in a buy zone after clearing a consolidation entry of 152.09. The relative strength line hit fresh heights, an encouraging sign. Overall performance for the software stock is strong, with its IBD Composite Rating coming in at 93 out of 99.
Camtek has cleared a consolidation pattern entry of 65.13. This is not ideal though, as earnings are due early tomorrow. Buying now would be risky.
An approach highlighted by Investor's Business Daily is to use options as a strategy to reduce risk around earnings. It's a way to capitalize on the upside potential of a stock's move around earnings, while reducing the downside risk.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
