Dow Jones Gains As Inflation Report Looms; Cathie Wood Buys These Chip Stocks, Sells Tesla

The Dow Jones Industrial Average shrugged off rising yields as new inflation data looms. Well-known fund manager Cathie Wood bought some chip stocks even as she sold Tesla (TSLA). Warren Buffett stock Occidental Petroleum (OXY) rose after it emerged that  Berkshire Hathaway (BRKB) had raised its stake.


Meanwhile a trio of stocks were testing entries. New Leaderboard stock Rambus (RMBS) passed a trendline, while Medpace (MEDP) and Atkore (ATKR) attempted breakouts.

Stocks held up even as yields spiked following mixed economic data. First-time jobless claims unexpectedly dropped to 239,000 vs. 264,000 in the previous week, Labor Department data showed. Analysts had expected them to rise to 270,000. The labor market continues to look strong.

The Commerce Department’s final estimate of first-quarter GDP rose to 2%, higher than the 1.4% expected by economists. Consumer spending rose 4.2%, the highest quarterly pace since the Q2 of 2021. This is a double-edge sword, for while the economy remains resilient it also strengthens the case for further tightening by the Fed.

Meanwhile, the latest Personal Consumptions Expenditures index data is due tomorrow. This, particularly the core measurement, is the Fed’s favored inflation gauge.

Nasdaq Lags As Small Caps Pop On Bank Boost

The Nasdaq lagged the other major indexes, but was only down 0.2% heading into the close. Micron (MU) trailed most as it dipped around 4% following its earnings report.

The benchmark S&P 500 was turning in a slight gain of 0.2%. Wells Fargo (WFC) was a top performer here as it jumped more than 4%.

The S&P 500 sectors were mixed. Financials and materials were the top performers. Communication services and consumer staples lagged the most.

Small caps were benefiting from a rally among bank stocks after the Federal Reserve said top lenders had performed well in its latest stress test. The Russell 2000 was up 1%.

Growth stocks were almost flat, with the Innovator IBD 50 ETF (FFTY) fractionally positive.

Dow Jones Today: JP Morgan, Goldman Sachs Lead Index Higher

The Dow Jones Industrial Average was faring best out of the major indexes, rising nearly 1%.

It was also bolstered by the performance of financial stocks following the Fed stress test results.

JPMorgan Chase (JPM) was the top performer, followed closely by Goldman Sachs (GS). Both were up more than 3%.

Visa was also having a solid session with a near-3% rise. Walgreens Boots Alliance (WBA) struggled most on the Dow Jones today as it fell nearly 2%, with Intel (INTC) also lagging.

Cathie Wood Buys Chip Stocks, Sells Tesla

Investors are always keen to keep track of fund managers.

Ark Invest head Cathie Wood snapped up a couple of chip stocks even as she sold more Tesla yesterday.

She bought 6,542 shares in Taiwan Semiconductor (TSM) and 4,576 in Advanced Micro Devices (AMD) for her ARK Autonomous Technology & Robotics ETF (ARKQ).

TSM stock is trading in a buy zone above a 98.98 consolidation entry at the moment. AMD stock came close to round-tripping sizable gains from a cup base entry of 102.43, but is currently extended.

Meanwhile, she sold 17,967 shares of Tesla stock from her ARKQ fund and a further 10,401 from her ARK Next Generation Internet ETF (ARKW).

Wood has dumped more than 500,000 shares of the EV stock across her various funds this month.

Warren Buffett Raises OXY Stake

Warren Buffett has not been shy about raising his energy holdings over the past year.

And he’s at it again. His firm Berkshire Hathaway snapped up 2.1 million shares of oil stock Occidental Petroleum between June 26 and June 28, an SEC filing showed.

This helped boost OXY stock. It popped more than 1%, moving back above the 21-day exponential moving average in the process.

Nevertheless, Occidental stock remains stuck in a longer-term downtrend and sits below its falling 50-day line.

Berkshire Hathaway stock was marginally higher. The ultimate Warren Buffett stock is in a buy zone above a cup-with-handle entry of 331.84.

Outside Dow Jones: 3 Stocks Test Entries

Rambus cleared a trendline entry near 61 amid ongoing enthusiasm for the chip stock. RMBS stock has been a mighty performer so far in 2023, rising more than 80%.

Overall performance is strong and its IBD Composite Rating is a perfect 99. The stock won a spot on the prestigious IBD Leaderboard list of top stocks amid the move.

Medical research play Medpace is in a buy zone after clearing a cup-with-handle entry of 231.63. MEDP stock has a perfect EPS Rating of 99, while price performance is also strong.

Atkore cleared a cup base buy point of 154.86 on its weekly chart. This is an early stage base, which means it has a better chance of success.

ATKR is in the top 6% of stocks in terms of price performance over the past 12 months.

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


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