The Dow Jones Industrial Average surged out of the red despite the 10-year U.S. Treasury yield hitting a multiyear high. Warren Buffett stocks Occidental Petroleum and Chevron bucked the market by driving higher. Leaderboard stock Vertex Pharmaceuticals was hit following a surprise move by the FDA. Intel and Microsoft were the top blue chips.
A couple of stocks are worth adding to one's watchlist amid the current market correction. Penske Automotive and Progress Software are both carving out bullish bases.
Volume was up on both the Nasdaq and declined New York Stock Exchange vs. Friday, according to preliminary data.
Meanwhile, the yield on the benchmark 10-year Treasury note rose 11 basis points to 2.99%. It briefly passed the 3% mark for the first time since 2018 earlier in the session. Oil rose, with West Texas Intermediate crude rising nearly 1% to more than $105 per barrel.
Nasdaq Flexes As Stocks Rally
The Nasdaq showed strength as it ended the day up 1.6%. Align Technologies was a top gainer, rising 6.5%. Beaten down document technology firm DocuSign also impressed with a 6% gain.
The S&P 500 also showed grit by fighting back after falling to a new 2022 low. It closed up 0.6%. Epam Systems was a big winner here, shooting up 8.9%. Epam is a laggard, however, showing an 8 Relative Strength Rating.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33063.61 | +86.40 | +0.26 |
| S&P 500 | (0S&P5) | 4155.58 | +23.65 | +0.57 |
| Nasdaq | (0NDQC ) | 12536.02 | +201.38 | +1.63 |
| Russell 2000 | 186.97 | +2.02 | +1.09 | |
| IBD 50 | 32.36 | -0.09 | -0.28 | |
Last Update: 4:06 PM ET 5/2/2022 |
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The S&P sectors were mixed. Communication services, energy and technology made the best gains while consumer staples and real estate performed worst.
Small caps muscled higher as the Russell 2000 ended the day up 1.1%.
Growth stocks failed to impress, though. The Innovator IBD 50 ETF, a bellwether for growth stocks, fell 0.3%.
Dow Jones Up As Intel, Microsoft Stock Shine
The Dow Jones Industrial Average made the weakest gain of the major indexes. It closed up almost 90 points, or 0.3%.
Intel was the top performer on the Dow Jones today. It rose 3.1%. Its is trading below its major moving averages, according to MarketSmith analysis.
Leaderboard stock Microsoft was another top performer on the index. The IBD Long-Term Leader rose 2.5%.
These Warren Buffett Stocks Pop
A couple of stocks held by Berkshire Hathaway, the investment vehicle for famed stock picker Warren Buffett, advanced.
Occidental Petroleum finished the day up nearly 6%. The oil stock is holding above the key 50-day moving average.
OXY stock is extended past a cup base buy point of 35.85. Energy stocks have been surging so far in 2022 amid the Russia-Ukraine war.
At the last count, Warren Buffett's firm holds 136,373,000 shares in Occidental. They are valued at about $8 billion.
Oil giant Chevron, another Buffett holding, closed up 2%. The stock is currently forming a flat base with a 174.86 buy point.
Berkshire Hathaway held 174,457,766 Chevron shares. This represents 7.9% of its portfolio and is worth almost $28 billion.
Leader Hit After Surprise Move
Vertex Pharmaceuticals was hammered 4.1% lower, though it closed off session lows.
It was punished after the Food and Drug Administration has placed its early-stage clinical trial of its VX-880 treatment for type 1 diabetes on clinical hold.
The treatment is a stem cell-derived, cell replacement therapy. According to the FDA the study was paused due to "insufficient information to support dose escalation with the product."
According to Vertex, there have been no serious adverse events considered related to the treatment.
"We are surprised by the clinical hold placed on the study," Dr. Carmen Bozic, Vertex's chief medical officer, said in a news release. "The results from the first two patients treated with half the target dose establish proof-of-concept by demonstrating that VX-880 can restore glucose-regulated insulin production and improve glycemic control."
RBC Capital Markets analyst Brian Abrahams said in a note to clients that "it would not seem that this hurdle is insurmountable."
Vertex is a member of the prestigious IBD Leaderboard list of top stocks. Earnings are due after the close Thursday, which could give the stock a lift.
Outside Dow Jones: These Stocks Form Bases
When the market is in a correction it is vital that one stays engaged and builds a robust watchlist. Here are a couple of names worth considering.
Outside the Dow Jones industrials, Penske Automotive is forming a consolidation pattern with an ideal buy point of 114.44. It is also offering an early entry at 106.10.
PAG stock made a bullish move last week by passing its 50-day and 200-day moving averages. It spiked after a top and bottom line in Q1. EPS growth of 113% was particularly impressive.
Earnings are a key strength for the franchised car dealerships operator, which is reflected in its near-perfect EPS Rating of 97.
Progress Software has built a large cup-with-handle base. It is shooting for an ideal entry point of 50.81, MarketSmith analysis shows.
EPS growth slowed in the past couple of quarters but its 3-year EPS growth rate is strong at 22%. It is in the top 16% of stocks in terms of price performance over the past 12 months. Big money has been a net buyer of PRGS stock in recent weeks, netting it an Accumulation/Distribution Rating of B-.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
