Stocks traded mixed in quiet action during the first hour of the regular session Thursday, one day after a pivotal rally spurred a boost in Investor’s Business Daily’s suggested exposure to stocks. However, individual companies including Deere (DE) and Dillard’s (DDS) fell on the stock market today due to disappointing quarterly reports.
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At around 10:15 a.m. ET, the Nasdaq composite and the S&P 500 edged 0.2% higher. Both raced to all-time highs on Wednesday following an inflation report that showed U.S. consumer prices did not continue to accelerate.
The Dow Jones Industrial Average breached the 40,000 mark as it lifted 0.3% after rallying 0.9% on Wednesday. It’s aiming for its 11th rise in 12 sessions. The popular blue chip index has gained 6% so far in 2024.
But the Dow Jones transportation average, which lagged the major indexes on Wednesday, fell 0.4%.
Stock Market Today: Magnificent Seven Rallies As Deere, Dillard’s Fall
Five of the “Magnificent Seven” megacap techs rallied, boosting the Nasdaq 100 tracker, the Invesco QQQ Trust (QQQ) a fraction. But smaller stocks cooled off. The Russell 2000 eased nearly 0.3%.
Meanwhile, farm equipment supplier Deere sank 3% to 401.65 in heavy turnover. The stock tried to pass a 414.80 buy point within a long, winding base. Deere shares are trying to gain buying support at a key technical level on its chart, the 50-day moving average.
Deere beat reduced top- and bottom-line views but issued a soft outlook.
Dillard’s fell 1.6% to 448.64 in heavy volume. Earnings fell 6% to $11.09 a share on a 4% dip in sales to $1.55 billion. The department store chain, primarily located in the South, nevertheless is building a new base with a 476.48 buy point.
Insurance Sector Leader A New Buffett Holding
On the bullish side of the stock market, insurance giant Chubb (CB) became the latest major Warren Buffett holding, according to filings with the Securities and Exchange Commission. Chubb shares jumped more than 5%.
One of the day’s early big movers, Chubb rose more than 4% and hit a session high 270.16. Shares also catapulted above a 260.58 proper buy point in a nine-week flat base. The 5% buy zone from 260.58 goes up to 273.61.
The company has enjoyed stout profit gains amid an industry that has sharply raised premiums. Chubb’s earnings have grown 17%, 58%, 108% and 23% vs. year-ago levels in the past four quarters.
However, Wall Street expects the firm, now based in Switzerland, to see a 4% decline in earnings this year to $21.67 a share.
Retailer Breaks Out In Stock Market Today
Also, Walmart (WMT), the discount retailing titan, added fuel to the bullish story in stocks with solid growth in same-store sales as well as in other segments such as digital ads and global e-commerce revenue.
Walmart blasted past the top of a mild double-bottom chart pattern that showed a 60.89 entry point. Earnings in the April-ended fiscal first quarter jumped 22% to 60 cents a share on a 6% pickup in total sales.
Growth investors generally should prefer companies in the large-cap and megacap arena that can grow their profits at a faster rate than sales. This implies firm pricing power or the ability to reduce costs, boosting margins.
China Stock Market Laggard
Elsewhere, China electric-vehicle maker Li Auto (LI), a true laggard so far this year, lopped off another 3% after announcing an 18% staff cut.
Li Auto, a former highflier after the pandemic stock market bottom in April 2020, dropped 2.6%. Shares remain pinned below their falling 50- and 200-day moving averages on the stock market today, a bearish sign.
Li hosts a terrible Relative Strength Rating of 12 on a scale of 1 to 99. In general, favor those growth leaders in the stock market with an RS Rating of 90 or higher.
After the close, the stock market will pay close attention to earnings from Applied Materials (AMAT), with a Relative Strength Rating of 92 and salvaged car auctioneer Copart (CPRT) and its 81 RS score.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
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