The Dow Jones Industrial took a dive, with Cisco Systems the worst performer amid acquisition news. A trio of Warren Buffett stocks held near buy points. IPO stocks Arm, Instacart parent Maplebear and Klaviyo had mixed fortunes.
With the market struggling, now is the time to look for stocks holding up near buy points. Manhattan Associates, Dorian LPG and Bunge are all worthy of consideration.
Treasury yields spiked. The 10-year yield soared 14 basis point to 4.49%, while the two-year yield rose 2 basis points to 5.14%. The yield curve remains inverted.
Stocks Fall As Investors Digest Fed, Powell
Stocks continued to struggle in the aftermath of yesterday's Fed meeting, which turned out to be more hawkish than investors hoped for.
Central bankers are anticipating one further quarter-point rate hike this year. Most also now see a much slower path of rate cuts in the next couple of years. Federal Reserve Chair Jerome Powell attributed this to stronger-than-expected economic activity.
In addition, while he said that a soft landing is still possible, Powell said it "may be decided by factors outside of our control."
Meanwhile, first-time claims for unemployment assistance surprisingly dropped to 201,000. This was much lower than the expected rise to 225,000
Oanda senior market analyst Edward Moya said investors are rattled over interest rates that are "not going to come down anytime soon."
"The Fed sees a labor market that is not weakening and the key drivers of inflation are still likely to keep prices elevated," he said in a note to clients. "Today's jobless claims data shows that mass layoffs haven't started yet, which should support consumer spending trends."
Bears Maul Nasdaq As Small Caps Dive
The tech-heavy Nasdaq was pounded by the bears. It lost ground on its 50-day moving average as the index fell 1.8%. Atlassian lagged with a decline of 5.4%.
The benchmark S&P 500 skidded 1.6%, also falling further from its 50-day line. FedEx stood out by popping 4.5% on better-than-expected Q1 earnings, clearing its 50-day line in the process.
The S&P 500 sectors were all in negative territory. Consumer discretionary and real estate lagged most in the stock market today. Health and the defensive utilities area held up the best.
Small caps were also lagging, the Russell 2000 losing ground on the 200-day line as it fell 1.5%. Growth stocks were getting the harshest spanking from the bears, with the Innovator IBD 50 ETF closing down 2.7%.
Dow Jones Today: Cisco Stock Dives Amid Acquisition
The Dow Jones Industrial Average sold off into the close. It closed down 370 points, or 1.1%.
The index was weighed down by the poor performance of Cisco. It was battered following the announcement it is snapping up cybersecurity firm Splunk in a $28 billion deal.
CSCO stock plunged 3.9% and fell below it's 50-day line, triggering a sell signal. Splunk, which is being bought for 157 per share, fared better as it soared 20.8%.
UnitedHealth fared best on the Dow Jones today as it popped 1.8%. In contrast, Dow Inc. lagged as it fell 2.8%.
Warren Buffett Stocks Dig In Near Buy Points
One investor with a track record of excelling during challenging times is Berkshire Hathaway CEO Warren Buffett. A few of stocks held by the firm were digging in near entries Thursday.
Jefferies Financial is holding just below a cup-with-handle ideal entry point of 37.73.
Price performance is Jefferies' strongest suit, and it is in the top 12% of issues in terms of stock market performance over the past 12 months. But its EPS Rating of 47 out of 99 is not ideal.
Mastercard is just below a flat base entry of 405.19, MarketSmith analysis shows. It looks to be getting support at the 50-day line.
Overall performance is very strong, with MA stock holding an IBD Composite Rating of 94 out of 99.
Chemicals stock Celanese is near a flat base entry of 128.50. While it is in the top 9% of stocks in terms of price performance over the last 12 months, its EPS Rating of 35 is poor.
Each of these Warren Buffett stocks are part of the Berkshire Hathaway's portfolio.
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, such as those in the IBD 50.
S&P 500 Marks New Low As Yields Soar; Tesla Forges New Buy Point
Arm Stock Falls With IPOs Mixed
IPO stocks have been struggling after exciting initial pops and they endured mixed luck again Thursday.
ARM stock moved as high as 35% above its IPO price, but has been coming in ever since. The stock closed off lows but still fell 1.4% Thursday. At one point during the session it dipped below its offering price of 51.
Instacart parent Maplebear had slightly better luck, notching a gain of 1.8%. Nevertheless, its early gains have also faded. In addition, it was well lower after hours.
Marketing-automation platform Klaviyo showed resilience after soaring on its IPO debut Wednesday. It rallied out of the red to gain 2.9% gain.
Investor's Business Daily founder William J. O'Neil flagged the risks of IPO stocks in his legendary tome, "How to Make Money in Stocks."
"Many IPOs are deliberately underpriced and therefore shoot up on the first day of trading, but more than a few can be overpriced," he said. "Because IPOs have no trading history you can't be sure whether they're overpriced."
Outside Dow Jones: Three Stocks Show Grit Near Entries
With the stock market struggling now is a good time to building up a robust watchlist. Here are some potential candidates.
Manhattan Associates has formed a cup-with-handle with an ideal entry point of 207.03. The relative strength line remains near highs.
Impressive performance has won MANH stock a place on the IBD Leaderboard Watchlist. It had a rough day, Thursday, though, falling 4.7% as it tests support at its 50-day line.
Dorian LPG sits just below a cup-with-handle buy point of 28.69. The relative strength line just hit fresh heights.
The LPG transportation play is an excellent all-around performer. Its IBD Composite Rating currently sits at 97 out of 99.
Bunge is clear of its short-term and major moving averages as it nears a flat base entry of 116.59.
The food processing and fertilizer play is in the top 10% of stocks in terms of price performance over the last 12 months.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
