Dow Jones gains; Tesla makes dives on deliveries; WWE slams UFC hook-up
The Dow Jones Industrial Average rose as stocks rose towards the end of Monday. Tesla (TSLA) slumped over disappointing delivery data, while World Wrestling Entertainment (WWE) was devastated by the merger news. Dow component UnitedHealth (UNH) appeared as a co-member Microsoft (MSFT) succumbed.
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A trio of promising stocks tested buy points despite the challenging action. Leaderboard stock Royal gold (RGLD), Tractor supply (TSCO) and Marathon Petroleum (MPC) all attempted breakouts.
Treasury yields fell. The 10-year yield fell 8 basis points to 3.41%, while the two-year yield fell 9 basis points to 3.97%. The yield curve remains inverted.
Energy stocks got a boost after OPEC+ announced a surprise production cut. West Texas Intermediate crude rose more than 6% to above $80 a barrel. It is now testing multi-month highs.
Nasdaq Falls And Small Caps Slip
The Nasdaq struggled the most of the major indexes, falling 0.3% despite fighting off lows. Atlasian (TEAM) skidded 4.2%.
The benchmark S&P 500 turned higher and rose 0.4%. Energy shares shone, too Halliburton (HAL) and ConocoPhillips (COP) among the strong performers.
The S&P 500 sectors ended the day mixed, with a slight bias to the upside. Not surprisingly, energy and health showed the strongest gains. Discretionary consumption and property were the worst groups.
Small caps gained early, but the Russell 2000 still closed nominally negative. Growth stocks reversed higher, with the Innovator IBD 50 ETF (FFTY) up 0.7%.
Dow Jones Today: UNH Shines, Microsoft Stock Lags
The Dow Jones came out the best of the major indexes. It gained more than 300 points as it ended the session up 1%.
UnitedHealth ( UNH ) was the index’s top performer, up 4.6%, boosted by Friday’s announcement of new Medicare rules.
Chevron ( CVX ) also impressed, rising 4.2% and outperforming its 200- and 50-day moving averages, MarketSmith analysis shows.
Salesforce ( CRM ) was the worst laggard on the Dow Jones, falling 1.6%. Microsoft also lagged behind, but the 0.4% loss was well off the day’s low.
Tesla makes divers on deliveries
Tesla has staged a big rally so far in 2023. But it came under severe pressure Monday, knocked by reports of total deliveries for the first quarter of 2023 at 422,875 and production at 440,808. This was well below analyst estimates for deliveries of about 432,000 vehicles, according to FactSet data.
TSLA stock closed near lows for the day as it fell 6.1%. It lost more ground on its 200-day moving average, but is staying clear of the 50-day line.
Tesla stock came close to a test of the 21-day exponential moving average.
TSLA is still up around 80% so far in 2023, but the stock is still well away from historic highs.
CEO Elon Musk’s brainchild has a robust IBD Composite Rating of 89 out of 99. Earnings have become a key strength as the stock has a perfect 99 EPS rating.
WWE stock fell amid merger talk
World Wrestling Entertainment stock was crushed by the top screw following merger news on Monday.
It managed to recover as it closed down 2.1%, well off its lows, amid news that it will merge with mixed martial arts giant UFC in a new public company controlled by Endeavour. WWE is valued at $9.3 billion, while UFC is valued at $12.1 billion.
On the open market, World Wrestling Entertainment has a market value of $7 billion, according to IBD data.
Entertainment company Endeavor will own a 51% stake while WWE shareholders will own the remaining 49%.
Due to the structure of the deal, longtime WWE boss Vince McMahon will still have a large stake.
However, it wasn’t just WWE stock that fell. Endeavor plunged 5.9 percent.
Outside the Dow Jones: Leader among breakouts
Royal Gold tried to break out past a cup-with-handle entry at 131.99. It closed slightly below that level.
The miner acquires and manages precious metal stream and royalty interests and is a member of the prestigious IBD Leaderboard list of top stocks.
Tractor Supply is sitting in a buy zone after pushing past a flat-base entry at 239.76.
All-around performance is strong, with the stock holding an IBD Composite Rating of 95 out of 99. Earnings are powerful.
Marathon Petroleum is just below the entry after it attempted to break out of a consolidation pattern with a buy point at 136.56.
The MPC share is in the top 6% of stocks in terms of price performance over the last 12 months.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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