Dow Jones Rallies As Nvidia Clears Entry; Cathie Wood Loads Up On This Stock Despite 28% Plunge

The Dow Jones Industrial Average reversed higher Monday as a broad rally helped it overcome the stock plunge by index component Boeing (BA). Meanwhile, Nvidia (NVDA) cleared a buy point while fellow Magnificent Seven stocks Apple (AAPL) and Amazon.com (AMZN) rose. And Ark Invest chief Cathie Wood snapped up a diving stock.

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Several other stocks were clearing buy points amid the action. Diabetes play DexCom (DXCM) and Golub Capital (GBDC) both tested entries.

Nasdaq Soars, Small Caps Jump

Indexes are trying to battle back after last week’s market stumble. Things are off to a positive start, with the Nasdaq composite ending Monday’s session up 2.2%.

Advanced Micro Devices (AMD) was among the top performers on the Nasdaq as it popped 5.5%. It is now clear of its short-term moving averages, MarketSmith analysis shows. Shares are back above the 20% profit zone from a 122.11 entry after Melius Research upgraded the stock to buy from hold.

The S&P 500 also flexed its muscles, powering 1.4% higher. American Airlines (AAL) was a star in the benchmark index as it soared 7.2%. Morgan Stanley analyst Ravi Shanker upgraded AAL stock to “overweight” from “equal weight” and maintained a price target of 20.

S&P 500 sectors nearly all finished the session higher. Technology and consumer discretionary led the upside in the stock market today. Energy was the only area to close lower.

Small caps also slapped the bears, with the Russell 2000 gaining 1.7%. Growth stocks fared even better, with the Innovator IBD 50 ETF (FFTY) soaring 2.9%.

Treasury yields closed lower. The 10-year Treasury note fell 3 basis points to 4.01% while the 30-year dipped 4 basis points to 4.16%. The 5-year yield also fell 4 points to 3.97% while the 2-year skidded 3 basis points to 4.36%.

Dow Jones Today: Boeing Stock Dives Amid Accident

The Dow Jones Industrial Average rallied out of negative territory to climb 217 points by the close. This equates to a gain of 0.6%.

The Dow managed to shake off negative action spurred by a plunged in Boeing stock. BA closed off lows but still dived 8%. It fell after the Federal Aviation Administration ordered the temporary grounding of the 737 Max 9 jet over the weekend.

It was reported Monday afternoon that United Airlines inspections had found loose bolts on several Boeing 737 Max 9 aircraft following the FAA’s ruling.

The ruling came after a section of the plane, a door plug, was torn off the side of an Alaska Airlines 737 midflight on Friday. Boeing stock got support at the 50-day line but fell below its 10-week moving average, triggering a sell signal.

The index got a boost from the strong performance of a number of components. Salesforce (CRM) jumped 3.9% while Intel (INTC) rallied 3.3%. The two stocks fared best on the Dow Jones today.

Magnificent Seven: Nvidia Clears Entry, Apple Stock Gains

The so-called Magnificent Seven were also back to winning ways Monday after last week’s drawdown.

Nvidia stock fared best as the artificial intelligence play jumped 6.4% and cleared a 505.48 flat base entry. It now sits near the top of a buy zone. It comes after the firm announced Monday new graphics processors and software for running generative AI applications on PCs.

The Leaderboard stock also got a boost after New Street named it as a top pick for 2024. The research firm said the upside is “significant” even if rival AMD’s pitch for a $400 billion market for AI data center chips proves overly optimistic.

E-commerce giant Amazon.com (AMZN) was also strong as it rose 2.7%. It is trading above its buy zone from a 145.86 entry.

Apple stock and Google parent Alphabet (GOOGL) also made stout gains. AAPL rose 2.4% while GOOGL vaulted 2.3%.

Dow Jones stock Microsoft (MSFT) and Meta Platforms (META) both gained 1.9% while Tesla (TSLA) rose 1.3%.

Three AI Stocks Among S&P 500’s Top Performers

Cathie Wood Buys Palantir Stock

Buying on the dip can be a risky strategy. But that was not enough to scare off Ark Invest Chief Executive Cathie Wood, who piled into Palantir Technologies (PLTR) stock on Friday.

Ark Invest’s flagship ARK Innovation ETF (ARKK) snapped up more than 777,000 shares. Not only that, the ARK Next Generation Internet ETF (ARKW) bought nearly 154,000 shares. It immediately paid off, with PLTR ending the day up 4.4%.

Palantir is a data analytics software company offering three platforms. Palantir Gotham is used primarily by government agencies while Palantir Metropolis is for banks, financial services firms and hedge funds. Finally Palantir Foundry is used by corporate clients.

Its recent performance has been far from ideal. At its low on Friday when Ark bought the stock, it had fallen more than 28% from its recent high of 21.85. Overall performance remains good, though, with PLTR boasting a strong Composite Rating of 93 out of 99 from Investor’s Business Daily. It sits among the top 5% of stocks in terms of price performance over the past 12 months.

Bargain hunting can be tempting for investors but IBD recommends buying stocks with strong earnings and price performance rather than laggards. Look for leaders in strong industries that are showing superior earnings growth and sales.

Meanwhile, Wood’s firm also jettisoned more Coinbase Global (COIN) stock. The cryptocurrency play had a remarkable run in 2023, but is down 8.3% so far in 2024. Ark Invest also bought some shares in Iridium Communications (IRDM) for its fleet of ETFs.

Outside Dow Jones: Diabetes Stock Clears Entry

With stocks back in rally mode now is the time to be tracking stocks breaking out of proper bases.

Diabetes play DexCom is trading in a buy zone after breaking out past a cup-with-handle entry of 126.37, MarketSmith analysis shows. It ended the session up 4.6%.

The stock jumped after the firm announced preliminary fourth-quarter sales that were above expectations and announced a new continuous glucose monitor due this summer

Golub Capital has cleared a flat base entry of 15.38. This is a first-stage base, which is a bonus. The stock notched a 0.7% lift Monday.

The investment management stock boasts strong all-around performance. Price performance is its weakest attribute, though it remains in the top 26% of issues in terms of price performance over the past 12 months.

Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.

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