The Dow Jones Industrial Average closed higher as the Santa Claus rally gained momentum. Famed investor Cathie Wood snapped up a stock that plunged around 21% from recent highs. Manchester United (MANU) popped amid an ownership deal, while Intel (INTC) jumped after it got an Israeli grant.
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Meanwhile, a number of stocks were testing entries. The likes of Weatherford International (WFRD), Okta (OKTA) and ASML (ASML) all cleared buy points amid the positive market action.
Nasdaq Pops, Treasury Yields Mixed
We have now entered the Santa Claus rally period. This reflects the time when the stock market tends to go higher for the final five trading days of the year and the first two trading days of the new year, according to the Stock Trader’s Almanac.
It was off to a positive start, with the Nasdaq composite closing up 0.5% Tuesday. GlobalFoundries (GFS) was among the better performers as it rose 2.7%. It pulled away from its 200-day moving average, MarketSmith analysis shows.
The S&P 500 was also solid, notching a gain of 0.4%. Energy play APA (APA) was a star in the benchmark index as it lifted 3.7%.
The S&P 500 sectors all ended the session in positive territory. Energy and real estate fared best in the stock market today. Energy was rising amid a gain of more than 2% in the price of U.S. crude. Health care and communication services made the slimmest gains.
Small caps gave the bears the bloodiest nose, with the Russell 2000 rising 1.2%. Growth stocks powered into the close, with the Innovator IBD 50 ETF (FFTY) rising 0.6%.
Treasury yields closed mixed. The 10-year Treasury note fell 1 basis point to 3.90% while the 30-year dipped 2 basis points to 4.04%. The 5-year yield was flat at 3.89% while the 2-year rose 2 basis points to 4.36%.
Dow Jones Today: Intel Stock Pops On Israel Grant, AAPL Lags
The Dow Jones managed to keep pace with the other major indexes. It climbed 159 points, or 0.4%.
Intel stock was the top performer on the much-watched index today. It popped 5.2% and finished the day at session highs. The government of Israel announced a $3.2 billion grant for the semiconductor behemoth to build a $25 billion chip plant in the southern part of the country.
Other semiconductor stocks outside the Dow Jones industrials also had solid sessions. Arm (ARM) finished near highs as it gained 1.6% while its fellow Leaderboard stock Nvidia (NVDA) rose 0.9%.
Other Dow Jones components making strong gains included Caterpillar (CAT) and 3M (MMM). CAT gained 1.8% while 3M moved above a 107.63 handle buy point due to a 1.7% lift. However volume was weak in the latter move.
Apple (AAPL) struggled most on the Dow Jones today as it fell 0.3%. Walmart (WMT) and Amgen (AMGN) also lagged.
Cathie Wood Snaps Up TTD Stock
Big-name investors often go where the average trader fears to tread. That was certainly the case with Ark Invest CEO Cathie Wood, who snapped up Trade Desk (TTD) stock on Friday.
Ark Invest’s flagship ARK Innovation ETF (ARKK) snapped up more than 261,000 shares. Additionally, the ARK Next Generation Internet ETF (ARKW) bought about 49,000 shares.
Trade Desk provides a self-service platform that helps advertisers find and purchase digital ad inventory across a variety of platforms.
Its recent performance has been far from ideal. At its low on Friday, the day when Ark bought the stock, it had fallen about 21% from its July 31 high. TTD stock rose 0.2% Tuesday. Overall performance is still good, though, with TTD stock holding an IBD Composite Rating of 87. It also holds a perfect 99 EPS Rating.
Bargain hunting can be tempting for investors but 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.
Meanwhile, Wood’s firm also sold some Coinbase Global (COIN) stock. The cryptocurrency play has been on a remarkable run in 2023, rising nearly 400%. Ark Invest also took some profits in the stock last week.
Manchester United Stock Up On Ownership Move
There are few sports brands as widely known as soccer team Manchester United. But the stock has been a loser in 2023, falling around 12%.
But it posted a gain of 3.4% Tuesday after an overhang over ownership cleared. Billionaire Jim Ratcliffe finally clinched a deal to buy a quarter of the club.
He will pay $33 per share, quite the premium on its closing price of just $20.52 on the stock market. Despite its gain, MANU failed to retake its 200-day moving average.
Ratcliffe is a British billionaire who is the owner, chairman and CEO of the Ineos chemicals group. He has supported the Premier League giant since childhood.
The club has been struggling so far in the 2023-24 season, with its new owner asking fans for “time and patience” in an open letter.
How To Handle This Santa Claus Rally; Five Stocks In Buy Zones
Outside Dow Jones: 3 Stocks Clear Buy Points
With the confirmed market uptrend continuing, it remains important to track breakouts.
Weatherford International cleared a cup-base entry of 100.93, but volume was light. A competitor of industry giant Halliburton (HAL), Weatherford provides services for an array of oil field types. Earnings performance is good, with the stock holding an EPS Rating of 83 out of 99.
Security software stock Okta is also in a buy zone after jumping above a double-bottom base entry of 90.73. Overall performance is very strong here, with Okta stock holding an IBD Composite Rating of 96.
ASML cleared a cup-with-handle entry of 760.33 on its weekly chart. This is a first-stage pattern, a bonus. The chip-equipment stock has a perfect Composite Rating and is in the top 17% of stocks in terms of price performance over the past 12 months.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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