The Dow Jones Industrial Average inched higher but lagged the other major indexes. Famed investor Cathie Wood bought a stock up powerfully in 2023 but sold some Bitcoin plays. Adobe popped after an acquisition deal crumbled. Meta Platforms and Amazon.com fared best among the Magnificent Seven.
There were a number of breakouts amid the positive action. Netflix, Urban Outfitters and Commvault Systems all tested entries.
Nasdaq Gains, Small Caps Lag
The Nasdaq composite fared best out of the major indexes as it rose 0.6%, setting another 52-week mark. Costco Wholesale piled on more gains Monday, adding a 3.4% lift to Friday's 4.5% jump. Nasdaq stocks have rallied for eight straight days.
The benchmark S&P 500 set a new mark for 2023 and closed in on an all-time high as it rose 0.5%. Etsy was a top performer here as it rose 4.7%.
The S&P 500 sectors ended the day mostly positive. Communication services and consumer staples fared best in the stock market today. Real estate and utilities lagged and were the only areas to finish lower.
Small caps lagged amid recent outperformance, with the Russell 2000 closing down fractionally. Growth stocks outperformed, with the Innovator IBD 50 ETF booking a 1% gain.
Dow Jones Today: PG Shines, Boeing Stock Lags
The Dow Jones lagged the other major indexes, though it was also able to claim an eighth-straight day in the black and hit another all-time closing high. It managed to squeeze out a tiny gain of less than a point, but was essentially flat.
Procter & Gamble was the top performer here as it rose nearly 1.5%. It remains below its 50-day and 200-day moving averages, MarketSmith analysis shows.
Walmart turned in an almost identical rise of 1.5%.
By contrast, Boeing lagged as it fell 1.5%. Goldman Sachs also had a tough session as it dropped 1.1%.
Cathie Wood Buys Extended Stock, Sells Bitcoin Plays
Sometimes big-name investors will go where the average trader fears to tread. That was the case with Ark Invest Chief Executive Cathie Wood, who snapped up plenty of Pinterest stock on Friday.
The firm bought nearly 454,000 Pinterest shares for the ARK Innovation exchange traded fund as well as additional shares for the ARK Next Generation Internet and Ark Fintech Innovation ETFs.
By contrast, the firm sold shares of Coinbase Global and the Grayscale Bitcoin Trust across the three Wood funds. ARKK alone jettisoned more than 12,000 shares of Coinbase stock.
Pinterest stock has been on a powerful run thus far this year, rising about 65%. But PINS is also extended, currently sitting about 22% above its 50-day moving average. It is also nearly 31% above its most recent buy point of 28.90.
Purchasing an extended stock increases the likelihood that you could get shaken out in a normal pullback, take a bigger loss than necessary, or reduce your profit potential.
Investor's Business Daily recommends buying stocks with strong earnings and price performance but does not recommend buying extended stocks. Look for leaders in strong industries that are showing superior earnings growth and sales.
Adobe Stock Gains After It Cancels Figma Buy
Outside the Dow Jones index, Adobe stock rallied somewhat after it announced earlier on Monday it had canceled its $20 billion acquisition of Figma, which makes a collaborative design tool.
The companies saw "no clear path" to receiving the necessary regulatory approvals from the European Commission and the U.K. Competition and Markets Authority, Adobe said in a news release.
"Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently," Adobe Chief Executive Shantanu Narayen said in the press release.
But while Adobe has been hit with a $1 billion termination fee, it seems investors welcomed the move. ADBE stock finished the day up 2.5%. It also is bouncing off its key 50-day moving average.
Adobe stock is a member of the IBD Tech Leaders list and has an IBD Composite Rating of 91 out of 99.
Magnificent Seven: Meta, Google Stock Shine
The so-called Magnificent Seven stocks were having a mostly positive start to the week Monday.
The two Big Tech members of that club that also are on the Dow Jones index had mixed fortunes. Microsoft rose 0.5% and remains in a buy zone above a 366.78 entry. But old rival Apple lagged as it fell 0.9%. It is trading in a buy zone above a 192.93 entry.
Meta Platforms was the best performer, rising 2.9%. Exposure to the stock was raised on Leaderboard earlier Monday.
E-commerce giant Amazon.com also impressed with a gain of 2.7%. It now is extended past a 145.86 buy point.
Nvidia rose nearly 2.4%. The Leaderboard stock is extended past a 476.09 entry. Google-parent Alphabet rose by an identical amount.
Meanwhile Tesla dipped slightly, ended the day down 0.6%. TSLA remains below a 278.98 buy point.
Outside Dow Jones: Netflix Stock Clears Entry
While action was not overwhelmingly positive, a few stocks still attempted breakouts.
Streaming stock Netflix is in a buy zone after clearing a consolidation entry of 485, MarketSmith analysis shows. NFLX closed up 3%.
Overall performance is very good here, with its IBD Composite Rating a robust 91 out of 99. The relative strength line is just off highs.
Urban Outfitters tested a cup-with-handle entry of 37.81 on its weekly chart. It is also actionable above a 36.10 entry on its weekly chart. The apparel retailer is in the top 15% of stocks in terms of price performance over the past 12 months. It also boasts a perfect EPS Rating.
Also outside the Dow Jones index, Commvault Systems staged a weekly chart breakout as it cleared a cup base entry of 78.80. It ended Monday sitting in the buy zone.
Earnings and price performance are stout for the database software stock, with per-share earnings rising by 23% in the most recent quarter.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
