Tech led the stock market lower Tuesday morning, but major benchmarks inched off morning lows, while blue chips and small caps showed mild strength. Berkshire Hathaway’s (BRKB) Warren Buffett made $450 million on Occidental Petroleum (OXY) after a Cowen upgrade. Berkshire added more shares in March.
The Dow Jones Industrial Average rose 0.3%. The Nasdaq pulled back 0.5% while the S&P 500 shed 0.1%. The iShares Russell 20 (IWM) inched higher by 0.3%.
NYSE volume and Nasdaq volume fell from the same time on Monday.
The S&P 500 and Nasdaq composite held above their 200-day moving averages but only the Nasdaq remains above its 50-day line. The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) fell 0.7%.
The Innovator IBD 50 ETF (FFTY) fared worse than the major indexes, falling 0.7%.
Crude oil rose 1.3% to $73.76 per barrel. Bitcoin gained 0.2% to $27,020. The 10-year U.S. Treasury yield rose 2 basis points to 3.54%.
European stocks were mildly positive, with the German DAX and Paris CAC adding 0.1%. The London FTSE crept up 0.2%.
Fed Vice-Chair Michael Barr addressed the House Financial Services Committee on the SVB bank failure in prepared comments, noting “the bank waited too long to address its problems, and ironically, the overdue actions it finally took to strengthen its balance sheet sparked the uninsured depositor run that led to the bank’s failure,” he said.
A full report on the bank collapse is scheduled for May.
March consumer confidence posted a surprise uptick to 104.2 vs. the 101.0 consensus. The rise comes after three consecutive monthly declines, showing a positive reversal. The American consumer remains surprisingly resilient.
Micron Sinks Ahead Of Earnings; Chip Stocks Join In
Tech and software stocks felt the heat as short-term Treasury yields ticked higher.
Micron (MU) shed 2.2% ahead of its February-ended quarterly results after Tuesday’s closing bell. The memory giant is expected to post a 67 cents-per-share loss after a $2.14 profit last year while revenue drops to $3.71 billion, from $7.79 billion. The company is engaged in a major cost reduction initiative, driven by lower DRAM pricing.
Shares dipped below the 50-day line, a troubling sign.
Autonomous-driving technology provider Mobileye Global (MBLY) sank 2.8%, sending it below the 50-day line.
Stock Market Today: Warren Buffett Makes $450 Million
Occidental rose 3.8% after TD Cowen upgraded the stock to outperform from market perform and raised the price target to 70.
The rally added nearly a half-billion dollars to billionaire Warren Buffett’s wealth as Berkshire CEO and Chairman. Berkshire bought an additional 3.66 million shares in the last week.
Meanwhile, shares of BRKB was relatively unchanged.
Alibaba (BABA) rallied over 11% after announcing it will split into six major business units, each with its own CEO. These groups will consist of Cloud Intelligence, Local Services, Logistics, Digital Media and Entertainment, and Commerce.
BABA shares had been in a slump despite a beat on Q4 top and bottom lines in February. Today’s move lifts the stock above the 21-day line and 200-day moving average.
PVH (PVH) rallied over 18% after better-than-expected Q4 earnings and sales, and higher 2023 guidance. Company’s brands include Tommy Hilfiger, Calvin Klein, Warner, Izod and Geoffrey Beene. The stock reclaimed its 50-day line.
Spice giant McCormick (MKC) jumped 9.1% after better-than-expected Q1 earnings and sales. It also reiterated full-year 2023 guidance.
MKC is on pace for its largest one day increase since March 2020, and is a top S&P 500 gainer. Shares are above the 200-day line.
Canada-based CGI (GIB) rose 0.6% breaking out of a flat base and hitting the 94.10 buy point. Shares of the IT and business consultant are in the 5% buy zone reaching to 98.81.
Walt Disney (DIS) dipped 0.1% after detailing plans to cut 7,000 jobs in three waves, beginning this week. The media giant also said it will scale back metaverse initiatives.
Stock Market Upgrades
Paramount Global (PARA) gapped up 3.5% after BofA Securities upgraded the stock to buy from neutral and raised its target to 32.
Array Technologies (ARRY) popped 3.3% on news that Truist Securities upgraded the solar systems tracker to buy from hold with a price target of 26.
Ciena (CIEN) gained 5.4% in heavy volume after Raymond James upgraded the telecom networker to a strong buy from outperform and raised their price target to 70.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
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