BREAKING: Futures Fall; Rivian Dives
The Dow Jones surged higher as the stock market rallied on plunging oil prices. Netflix (NFLX) and Amazon.com (AMZN) popped on bullish calls. Amazon also got a late boost on a 20-for-1 stock split.
Travel stocks like Airbnb (ABNB) and Expedia (EXPE) also fared well, though Caesars Entertainment (CZR) stole the show with a double-digit gain. Microsoft (MSFT) was a top blue chip.
A couple of stocks also made breakout attempts amid the bullish action. Both Credicorp (BAP) and Harmony Biosciences (HRMY) tested buy points.
Volatility fell sharply, with the Cboe Volatility Index, or VIX, slipping about 8%. A key flaw for the day’s rally was volume, which fell on both the New York Stock Exchange and the Nasdaq according to preliminary data.
Meanwhile, the yield on the benchmark 10-year Treasury note spiked higher. It rose about 7 basis points to 1.94%. Oil fell sharply from recent elevated levels, with West Texas Intermediate crude tumbling around 11% to about $110 per barrel.
The Nasdaq fared best out of the major indexes, closing up 3.6%. Match (MTCH) impressed with a nearly 13% gain, while Datadog (DDOG) and Moderna (MRNA) also made aggressive upside moves. All three are in downtrends, however.
The S&P 500 also made a stout gain, rising 2.6%. Tapestry (TPR) shone with a gain of 10.6%. Reflecting the slump in oil, Phillips 66 (PSX), ExxonMobil (XOM) and Schlumberger (SLB) were among the index’s worst performers.
The S&P sectors were nearly all green, with technology and financials the top areas. Only energy and utilities closed lower.
Small caps also managed to make a healthy gain, with the Russell 2000 up nearly 3%.
Growth stocks also made up some lost ground. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, gained 3.1%.
The Dow Jones industrials lagged the other major indexes but still posted a strong gain. The Dow rose about 650 points as it gained 2%.
Microsoft was one of the top Dow Jones stocks today, rising 4.6%. It is continuing to consolidate just below its 200-day moving average. Given Microsoft is an IBD Long-Term Leader, a move above here could be used as a risky entry.
Salesforce.com (CRM) was the top stock on the index today as it rose 5.8%. Chevron (CVX) lagged as it fell 2.5%.
Amazon benefited from a bullish note from Barclay’s as it ended the day up 2.4%. However, it has a lot of damage to repair after dropping nearly 18% so far this year.
Barclay’s held its overweight rating on the firm and said it believes upward estimate revisions “are likely” this year.
It said retail margins are “starting to show stabilization” while the company is also focusing on higher-margin areas of its businesses like Amazon Web Services and ads.
After the close it emerged the Amazon board have approved a 20-for-1 stock split. They also authorized a $10 billion stock buyback program. The measures are subject to approval at the firm’s annual shareholder meeting. AMZN stock surged after hours.
Netflix closed off highs but still moved up around 5%. The stock climbed after Wedbush upgraded it to neutral from underperform.
It said NFLX’s “first-mover advantage” and “large subscriber base” give it a “nearly insurmountable competitive advantage” over streaming rivals. Nevertheless, Netflix stock is down almost 40% in 2022.
Other FANG stocks also notched stout gains for the session. Facebook parent Meta Platforms (FB) tacked on more than 4%, while Google parent Alphabet (GOOGL) popped 5%. GOOGL looks to be crafting a new base.
It was a good day overall for travel stocks, with the booking area the best industry group of the day.
Expedia (EXPE) is a top performer here with its 5.4% advance. Investors may want to wait for the stock to build a new base after a January breakout failed.
Airbnb stock also popped. But its gain of nearly 4% still left it shy of the key 50-day and 200-day moving averages.
One of the top performers in terms of travel stocks was casino play Caesars Entertainment. A bullish note from Jefferies and news that CEO Tom Reeg had snapped up 10,000 shares boosted the stock.
It closed well of highs for the day but still gained nearly 11%. The next challenge for the stock will be retaking the key 50-day moving average.
Cruise stocks also did very well, with Carnival (CCL) and Norwegian Cruise Line (NCLH) both gaining nearly 9%.
But both remain marooned below their major moving average.
Why Today’s Market Action Was Ideal; Five Stocks Set Up As Oil Prices Dive
Harmony Biosciences closed just below its buy point after moving past the 45.99 cup entry earlier in the session. Big money has been sinking cash into the biotech stock of late, with its Accumulation/Distribution coming in at A, according to MarketSmith data.
Credicorp, which is the largest financial holding company in Peru, closed in buy range above a cup-with-handle entry of 160.90.
The stock has been making swift progress so far in 2022, rising more than 30%. But earnings are lagging market performance.
Eli Lilly (LLY) is also worth tracking. It was added to the Leaderboard Watchlist as it carves out a new cup base. The buy point is 284. Wall Street sees earnings growth moderating in 2022 before returning to double-digit growth in 2023.
While the market impressed today, it is vital that investors remember the market has been in a correction since Feb. 23. This means that buying stocks now carries much more risk.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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