Dow Jones rally; Tesla Dives, Leads ‘Race To The Bottom;’ Warren Buffett stock craters

The Dow Jones Industrial Average rose as stocks turned higher on Thursday. Tesla ( TSLA ) took a dive after the investor day event fell flat. Warren Buffett stock Snowflake (SNØ) fell, while cryptobank Silvergate capital (SI) the crater.


A lone stock dared to attempt a breakout amid the challenging broader action. Builders FirstSource (BLDR) managed to clear a buy point after reversing higher.

Shares staged an impressive rally after being pushed down by ongoing strength in the labor market. Initial weekly jobless claims surprisingly fell to 190,000 from 192,000 last week. They were expected to rise to 200,000.

This raised fears that the Federal Reserve may raise interest rates further. But stocks bounced back amid reports Federal Reserve Bank of Atlanta President Raphael Bostic, a non-voting member, said the central bank may be in a position to stop tightening by mid-summer.

The yield on the benchmark index for 10-year government bonds rose by seven basis points to 4.06%. Oil rallied, with West Texas Intermediate crude gaining fractionally and trading at just around $78 a barrel.

Nasdaq reverses higher, IBD 50 lags

The current market rally remains under pressure, but stocks showed some resilience on Thursday.

The Nasdaq battled out of the red to gain 0.7%. Dexcom ( DXCM ), a leader in the continuous glucose monitoring market for diabetics, performed well, up 9.5%.

The S&P 500 also reversed higher, rising 0.5%. Take-Two Interactive Software (TTWO) did well here, rising 6.1%.

The S&P 500 sectors were mostly positive. Tools and technology fared best while the economy lagged behind.

Small caps managed to bounce back, with the Russell 2000 rising 0.2%. Growth stocks managed to enter positive territory late, with the Innovator IBD 50 ETF ( FFTY ) rising 0.1%.

Dow Jones Today: Salesforce Stock Rockets

The Dow Jones Industrial Average was the strongest major index all day. It drifted into the close range to gain more than 300 points, or 1.1%.

The blue chip barometer got a big boost in performance Salesforce (CRM). It broke out of a cup-with-handles base, crossing an entry of 178.94 on strong volume after beating Q4 views. It ended the session up 11.5%. The stock enjoyed its biggest percentage increase since August 2020.

Intel (INTC) and Boeing (BA) also did well, rising 3.4% and 2.7% respectively.

JPMorgan Chase ( JPM ) was the worst laggard among the Dow Jones industrials as it fell 1%.

Tesla shares fell as investor day falls flat

One stock that failed to make a comeback was Tesla, which was the worst performer on the S&P 500. It took a beating after its investor day failed to live up to expectations.

Investors were disappointed after the firm failed to unveil a next-generation EV, with CEO Elon Musk refusing to answer a question about new products.

One analyst who keeps the faith is Adam Jonas of Morgan Stanley. He was impressed by the firm’s aim to offer cheaper electric vehicles and said that “bold efforts at vertical integration are paying off.”

“In a race to the bottom, we seriously question how the competition can keep up,” the analyst, who rates TSLA as overweight with a target of 220, said in a note to clients.

Still, analysts were not overly impressed with Tesla’s presentation and gave mixed reactions. Tesla stock fell 5.9%, losing ground on its 200-day moving average in the process.

Warren Buffett stock dive

Even the biggest investors can suffer painful losses. And this was the case for Warren Buffett after Snowflake plunged on Thursday.

The stock was hammered despite beating Wall Street views for both earnings and sales in its latest quarterly report. Revenue guidance for the current quarter was below analysts’ expectations.

Snowflake also announced a $2 billion share buyback program. The former Leaderboard stock ended the session down 12.4%. It gapped below the 50-day moving average, a sell signal.

Berkshire Hathaway (BRKB), which is led by Warren Buffett, has more than 6 million SNOW shares.

Crypto Bank Silvergate Capital Craters

Crypto lending bank Silvergate Capital was decimated on the stock market today, plunging 57.7%. There are fears it could eventually go out of business after the firm revealed it would miss its March 16 filing deadline. This is in addition to the fact that the annual reports are already late.

Silvergate said it needs more time to complete certain audit procedures. It also said it is “analyzing certain regulatory and other inquiries and investigations.”

The company also disclosed that it is likely to miss an interest payment on Series A preferred stock, equivalent to a yield of over 5.3%. The crypto bank has been badly damaged by the fallout from the FTX scandal when deposits were low in the fourth quarter.

A number of companies, including Coin base (COIN), no longer accepts or initiates payments to or from Silvergate.

The firm was previously a small community bank before entering the cryptocurrency space in an attempt to chase growth.

The stock has fallen more than 97% from its all-time high of 219.75, which it reached in November 2021.

Outside the Dow Jones: Builders FirstSource Tester Point of Purchase

While pimples were hard to come by, one clever customer tested a listing.

Builders FirstSource is trading in a buy zone after clearing an entry at 86.58. The relative strength line has just hit new highs, a bullish sign. Overall performance is very strong, giving it an IBD Composite Rating of 95 out of 99.

Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.


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