The Dow Jones Industrial Average gained as stocks reversed higher Thursday. Tesla took a dive after its investors day event fell flat. Warren Buffett stock Snowflake took a tumble, while crypto bank Silvergate Capital cratered.
A solitary stock dared to attempt a breakout amid the challenging broader action. Builders FirstSource managed to clear a buy point after reversing higher.
Stocks staged an impressive rebound after being pressed lower amid ongoing labor market strength. Initial weekly unemployment claims surprisingly fell to 190,000 vs. 192,000 in the previous week. They were expected to rise to 200,000.
This raised fears the Federal Reserve may raise rates higher for longer. But stocks fought back amid reports Federal Reserve Bank of Atlanta President Raphael Bostic, who is not a voting member, said the central bank could be in a position to pause tightening by mid- to late summer.
The yield on the benchmark 10-year Treasury note rose seven basis point to 4.06%. Oil inched up, with West Texas Intermediate crude gaining fractionally to trade at just around $78 per barrel.
Nasdaq Reverses Higher, IBD 50 Lags
The current market uptrend remains under pressure but stocks showed some resilience Thursday.
The Nasdaq fought its way out of the red to turn in a gain of 0.7%. Dexcom, a leader in the continuous glucose monitoring device market for diabetics, performed well with a 9.5% gain.
The S&P 500 was also reversed higher, rising 0.5%. Take-Two Interactive Software did well here, rising 6.1%.
The S&P 500 sectors were mostly positive. Utilities and technology fared best while financials lagged.
Small caps managed to fight back, with the Russell 2000 rising 0.2%. Growth stocks managed to get into positive territory late, with the Innovator IBD 50 ETF gaining 0.1%.
Dow Jones Today: Salesforce Stock Rockets
The Dow Jones Industrial Average was the strongest major index all day. It powered into the close to gain more than 300 points, or 1.1%.
The blue chip barometer got a big boost by the performance of Salesforce. It broke out of a cup-with-handle base, gapping above a 178.94 entry in strong volume after beating Q4 views. It ended the session up 11.5%. The stock enjoyed its largest percentage increase since August 2020.
Intel and Boeing also did well, rising 3.4% and 2.7% respectively.
JPMorgan Chase was the worst laggard among the Dow Jones industrials as it fell 1%.
Market Rally Stages Bullish Comeback; AI Stock Surges Late
Tesla Stock Slammed As Investor Day Falls Flat
One stock that failed to make a comeback was Tesla, which was the worst performer on the S&P 500. It was given a clubbing after its investor day failed to live up to expectations.
Investors were disappointed after the firm failed to unveil a next-generation EV, with CEO Elon Musk refusing to answer a question about new products.
One analyst keeping the faith is Adam Jonas of Morgan Stanley. He was impressed by the firm's aim to offer cheaper electric vehicles and said "audacious efforts on vertical integration are about to pay off."
"In a race to the bottom, we seriously question how the competition can keep up," the analyst, who rates TSLA as overweight with a 220 target, said in a note to clients.
Nevertheless, analysts were not overly impressed with Tesla's presentation and gave mixed reactions. Tesla stock tumbled 5.9%, losing ground on its 200-day moving average in the process.
Warren Buffett Stock Dives
Even the greatest investors can suffer painful losses. And this was the case for Warren Buffett after Snowflake plunged Thursday.
The stock was hammered despite beating Wall Street views for both earnings and sales in its latest quarterly report. Revenue guidance for the current quarter came in below analyst expectations.
Snowflake also announced a $2 billion stock repurchase program. The former Leaderboard stock ended the session down an eye-watering 12.4%. It gapped below the 50-day moving average, a sell signal.
Berkshire Hathaway, which is led by Warren Buffett, holds more than 6 million SNOW shares.
Crypto Bank Silvergate Capital Craters
Crypto lending bank Silvergate Capital was decimated in the stock market today, plunging 57.7%. There are fears it may ultimately go out of business after the firm revealed it would miss its filing deadline set for March 16. This is in addition to its annual reports filing already being late.
Silvergate said it needs more time for the completion of certain audit procedures. It also said it is "analyzing certain regulatory and other inquiries and investigations."
The company also disclosed it is likely to miss an interest payment on Series A preferred shares, equivalent to yield exceeding 5.3%. The crypto bank has been badly damaged by the fallout from the FTX scandal as deposits ran low in the fourth quarter.
A slew of firms, including Coinbase, are no longer accepting or initiating payments to or from Silvergate.
The firm was previously a small community bank before it entered the cryptocurrency space in a bid to chase growth.
Shares have fallen more than 97% from their all-time high of 219.75, which it reached in November 2021.
Outside Dow Jones: Builders FirstSource Tests Buy Point
While breakouts were hard to come by, one plucky customer did test an entry.
Builders FirstSource is trading in a buy zone after clearing an entry of 86.58. The relative strength line has just hit fresh heights, a bullish sign. Overall performance is very strong, netting it an IBD Composite Rating of 95 out of 99.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
