September 25, 2023

Dow Jones Gains Amid Disney TV Shock; Cathie Wood Stock reaches the buy zone as she loads

The Dow Jones Industrial Average closed higher despite a disney (DIS) CEO Bob Iger’s TV bomb. A Cathie Wood stock was in a buy zone after the celebrity investor bought shares. Glowing AI stocks Nvidia (NVDA) cleared a buy point.


A number of stocks passed buy points amid the exuberant action. Leaderboard Shares ASML (ASML) and Holding on (ONON) tested entries while Magellan Midstream Partners (MMP) is a buying zone.

Equities were boosted after more positive inflation news. The producer price index came in views below. This was true for both aggregate and core producer prices.

Meanwhile, initial jobless claims unexpectedly fell to 237,000 versus 248,000 the week before. Economists had expected claims to rise to 249,000. The job market remains impressively strong.

Government bond yields fell again. The 10-year rate fell 10 basis points to 3.76%, while the two-year rate fell 12 basis points to 4.62%. Nevertheless, the yield curve remains inverted.

Nasdaq Rises as IBD 50, Small Caps Jump

The Nasdaq boomed again, the tech-heavy index roared 1.6% higher. IBD Sector Leaders stock Zscaler (ZS) performed best here, with an increase of 5.4%.

The benchmark S&P 500 ended the session up 0.9%. Epam Systems (EPAM) performed remarkably well in the S&P, rising 4.8%.

Both indices closed at their highest levels to date in 2023. Early data showed volume was lower on both the NYSE and Nasdaq.

Sectors of the S&P 500 closed mostly positive. Communication services and technology were the biggest winners. Health and energy were the only laggards in the stock market today.

Small caps participated in the gains, with the Russell 2000 popping 1%. Growth stocks impressed even more, with the Innovator IBD 50 ETF (FFTY) closing 1.6%.

Dow Jones Today: Microsoft Stock Pops, Disney TV News

The Dow Jones Industrial Average trailed the other major indices as it closed with a meager gain of 0.1%.

Disney shares ended the day up 0.4% after Iger spoke about the challenges facing the troubled media giant. Disney is up less than 2% in 2023, trailing the S&P 500 heavily.

He told CNBC “the company faces a lot of challenges, some of which are self-inflicted” and said his TV business “might not be the core of Disney.”

Disney’s portfolio of TV networks, including ABC and ESPN, has long been a major profitability driver for the company. But consumers are increasingly turning to streaming services.

There was more bad news for Disney Thursday after the Screen Actors Guild came forward — American Federation of Television and Radio Artists voted to strike. This means that film and television productions come to a standstill from midnight. They join the more than 11,000 Writers Guild of America members already on strike.

It is the first time since 1960 that two major Hollywood unions have gone on strike at the same time.

Microsoft (MSFT), which is benefiting from the boom in AI stocks, was the best performer on the Dow, gaining about 1.6%. The stock is trading above its major moving averages, according to MarketSmith’s analysis.

Cisco systems (CSCO) also posted strong gains on the Dow Jones today, up 1.6%. Walgreens Boots Alliance (WBA) trailed with a 1.9% decline.

Stocks run with big gains, Nasdaq needs rebalancing

Cathie Wood buys Teradyne as it enters the buy zone

Investors always like to follow the movements of top portfolio managers.

ARK Invest chief Wood added to her holdings of Teradyn (TER) yesterday.

She bought more than 12,000 shares for her ARK Autonomous Technology & Robotics ETF (ARKQ) and more than 3,000 shares for her ARK Space Exploration & Innovation ETF (ARKX).

The move looks inspired at this point as TER just moved into a buy zone above a buy point of 112.06 after finding support at the 21-day exponential moving average.

TER stock is up nearly 33% so far this year. ARKQ’s performance is even better, up nearly 55% in that time frame, while ARKX is up nearly 26%.

Cathie Wood also sold more Tesla (TSLA), this time with more than 20,000 shares in its various funds.

Nvidia stock clears entry amid AI boom

Chip leader Nvidia has had a remarkable run in 2023, up almost 220% so far.

Investors have another chance to climb aboard the freight train on the exchange as it moves past a four-week tight entry of 439.90.

These are usually used as an opportunity to buy additional shares for an existing position. Aggressive investors can also use it as a buying point in a new position.

Shares of Nvidia have soared amid a massive hunger for artificial intelligence stocks. NVDA chips are currently crucial for AI applications.

Analysts see earnings jump 112% in the current fiscal year ending January 2024 to $7.09 per share and shoot up 41% in the next fiscal year.

Beyond Dow Jones: Leaderboard Stocks Test Buying Points

With the market rally continuing to show strength, now is the time to look for stocks that broke out.

ASML is in a buy zone after previously hitting a flat base buy point of 747.13. This is a base in the first stage, a plus, although the volume was mediocre.

All round performance is top notch here, which is reflected in the perfect IBD Composite Rating of 99.

Shoe stock On Holding raced past a cup-with-handle base with a buy point of 33.67, but ended the session just short of the entry. The sneaker game, supported by tennis legend Roger Federer, is up more than 100% so far this year.

Both ASML and ONON are part of the prestigious Leaderboard list of top stocks.

Magellan Midstream Partners is a buy zone. It cleared a flat base entry of 64.42, but the fact that the move came in low volume is a negative.

The petroleum transportation game has seen its relative strength line move higher lately. The company has agreed to be acquired by Oneok (OKAY).

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


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