The Dow Jones Industrial Average gained as stocks rallied into the close. Elon Musk may move to cut prices again, according to a new analyst report on Tesla. Micron Technology stock popped on a memory-chip move. Caterpillar gained as Apple fell.
A couple of stocks staged breakouts despite the mixed action. Five Below and Magellan Midstream Partners both tested buy points.
Edward Moya, Oanda senior market analyst, said stocks were jittery Monday amid rising worries over economic risks.
"The outlook for the economy is going to get very ugly in Q3 and Q4 as small business is about to get crushed as lending dries up," he said in a note to clients. "Commercial bank lending is already starting to show signs it's falling apart; in the two weeks ended March 29th lending dropped by $105 billion, the most since the series started in 1973."
Nasdaq Dips But Small Caps Shine
The Nasdaq struggled most out of the major indexes. It was nominally negative but basically flat. Advanced Micro Devices impressed with a gain of 3.3%.
The benchmark S&P 500 managed to grind out a 0.1% gain. Western Digital impressed here as it rose 8.2%.
The S&P 500 sectors ended the session mixed. Energy and industrials fared best while utilities and communication services lagged.
Small caps moved higher, with the Russell 2000 closing up 1%. Growth stocks also impressed, with the Innovator IBD 50 ETF up 1.1%.
Dow Jones Today: Apple Stock Lags As Caterpillar Wiggles Higher
The Dow Jones managed to reverse higher. It fared best out of the major indexes as it turned in a third-straight session of gains. It closed up just over 100 points, or 0.3%.
Caterpillar fared best on the upside, turning in a gain of 3%. It managed to retake the 200-day moving average.
Apple stock was lagging most on the Dow Jones today, skidding 1.6%. It fell on news that its PC shipments plunged 40% in the first quarter vs. the same quarter a year ago.
AAPL stock got support at the 21-day exponential moving average, MarketSmith analysis shows.
Tesla Stock Slips As Analyst Expects Price Cuts
Tesla stock fought its way off lows Monday after the EV giant dipped on Thursday's news it's making more U.S. price cuts.
The global electric-vehicle maker reduced Model S and X prices by $5,000 in U.S., the third price reduction this year.
It came as Bernstein analyst Toni Sacconaghi reiterated an underperform rating on TSLA stock and a 150 price target.
He said the latest cuts "reflect Tesla's need to stimulate demand" and that those hoping that Q1's less than spectacular margins may have been the bottom could yet be disappointed.
"We don't believe that (it may have bottomed) will necessarily be the case, particularly given our belief that further cuts are likely," he said in a note to clients.
Tesla also unveiled plans to build a new Megapack factory in Shanghai. The facility should be capable of producing 10,000 large batteries per year.
TSLA fought back to end the session down just 0.3%. It remains up nearly 71% so far in 2023.
Micron Stock Pops On Samsung Move
Micron stock got a big boost after Samsung Electronics said it would cut memory chip production near term, opening the door for higher sales of Micron memory chips.
"Samsung's actions support our view that the company is not aggressively chasing market share," Raymond James analyst Srini Pajjuri said in a note to clients. "We expect Samsung's cuts to accelerate memory price recovery, and are optimistic that the severity of the current downturn will lead to structurally better supply discipline in the industry going forward."
Samsung holds about 45% of the memory chip market, according to Pajjuri.
Micron stock gapped up through its 50-day moving average and short-term moving averages, MarketSmith analysis shows. It ended the day up 8%.
Leaderboard stock Rambus, which designs chips for the memory, security and display markets, rose 2.8%.
AMC Stock Jumps On Super Mario Brothers
AMC Entertainment vaulted 6.9% Monday amid strong box office performance.
The cinema chain stock was given a boost after a bumper Easter weekend delivered its third busiest Friday-to-Sunday weekend since Dec. 2019.
Nintendo was a key reason for the jump, with the "Super Mario Bros. Movie" topping the box office and setting some new records in the bargain.
It earned $204.6 million at the domestic box office and $377 million at the global. This makes it the highest grossing debut of 2023 and the highest-grossing debut for makers Illumination, ahead of 2015's "Minions."
AMC stock remains stuck below its major moving averages. Nevertheless, it is now up more than 33% so far this year.
Outside Dow Jones: Five Below Leads Breakouts
A couple of stocks managed to test buy points amid the mixed action.
Five Below is in a buy zone after clearing a flat base buy point of 212.66.
The relative strength line hit fresh highs, a bullish sign. This is a second-stage pattern. Early-stage bases are more likely to net good gains.
Overall performance is strong and FIVE is in the top 5% of stocks in terms of price performance over the past 12 months.
Magellan Midstream Partners is just below a buy zone after earlier moving above a 55.23 flat base entry. Low volume is a flaw and it closed the day down 0.5%.
This is a first-stage base. The stock boasts an IBD Composite Rating of 91 out of 99. However, an EPS Rating of 67 out of 99 is far from ideal.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
