Dow Jones Rallies; Tesla Stock Passes Buy Point; Donald Trump SPAC Explodes, Gains 846%

The Dow Jones Industrial Average rallied back despite being weighed down by poor Intel (INTC) results. EV leader Tesla (TSLA) moved above a new buy point. Donald Trump SPAC Digital World Acquisition (DWAC) exploded again in a raucous session as it posted a mammoth weekly gain.

A number of other stocks managed to pass buy points, despite the mixed overall action. Chip leader Nvidia (NVDA), cybersecurity play CrowdStrike (CRWD), Pool (POOL) and financial software play Workday (WDAY) all attempted breakouts.




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Jerome Powell Comments Weigh

Comments by Federal Reserve chair Jerome Powell at the virtual Bank for International Settlements-South African Reserve Bank conference Friday weighed on stocks. He said supply constraints are “likely to last longer than previously expected, likely well into next year.”

“Overall inflation is running well above target,” Powell said at the conference. The measure of inflation that the Fed targets has shown prices increasing at 4% or more in recent months, compared with last year.

Oanda senior market analyst Edward Moya the fact the US economy needs to fill 5 million jobs before the labor market recovery is back to 2020 levels suggests immediate rate hikes after tapering “might be a bit too aggressive.”

“The key takeaway from Powell was that the Fed is on track to begin tapering and that should be done by mid-2022, transitory inflation might last a little longer than expected, and that rate hike expectations should be written in pencil,” he said in a note to clients.

Nasdaq Falls As Growth Stocks Slide

The Nasdaq was struggling amid weakness among tech stocks. It closed down 0.8%. Intel, MercadoLibre (MELI) and Facebook were the worst laggards.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35677.68 +74.60 +0.21
S&P 500 (0S&P5) 4544.98 -4.80 -0.11
Nasdaq (0NDQC ) 15090.20 -125.50 -0.82
Russell 2000 (IWM) 227.35 -0.60 -0.26
IBD 50 (FFTY) 49.41 -0.56 -1.12
Last Update: 4:02 PM ET 10/22/2021

The S&P 500 was also down slightly, though almost flat. It fell 0.1%. VF Corp. (VF) was among the laggards here, slipping 4.5%.

The S&P sectors were mixed, though a majority were positive. Energy and financials made the best gains, while communication services, consumer discretionary and technology were among the laggards.

Small caps were struggling, despite strength among financials. The Russell 2000 closed down 0.3%.

However, it was growth stocks that struggled the most, with the Innovator IBD 50 ETF (FFTY) finishing with a loss of 1.1%.

Dow Jones Fights After Intel Results Shock

The Dow Jones Industrial Average managed to fight its way out of negative territory. It closed the day up 0.2%, or about about 75 points.

It managed to battle despite being weighed by disappointing results by Intel. The stock gapped down and fell below the bottom of a six-month consolidation following its latest report. It finished the day with a loss of 11.7%.

While the chip giant crushed Q3 earnings views, adjusted revenue fell short by some measures, led by data-center chips. Ano ther big factor was light Q4 earnings guidance, which comes as operating expenses move higher. The firm’s CFO George Davis is also stepping down.

American Express (AXP) was the clear winner on the Dow Jones today, rising 5.4%.

Trump SPAC Frenzy Continues

A listed special purpose acquisition company linked to former President Trump continued to rocket following the news he plans to launch a social media company. It closed with a weekly gain of 846%.

Digital World Acquisition is benefiting from the news it is to be the vehicle that will take the Trump Media & Technology Group public via a merger.

DWAC stock exploded as high as the 175 level, a gain of almost 300% on Thursday’s closing price, and the stock was even halted due to a circuit breaker. It closed with a gain for the day of  107%, which is still an enormous single day gain for a stock.

The stock has surged on the news the Trump Media & Technology Group is looking to launch a social media site named Truth Social.

There will also be a subscription-based video-on-demand service to be called TMTG+. Trump said the latter service “will feature ‘non-woke’ entertainment programming, news, podcasts, and more.”

Trump has seen his access to key social media networks such as Twitter severely curtailed since the Jan. 6 riot at the Capitol.

Tesla Stock Passes New Buy Point

Tesla stock managed to pass a new 900.50 buy point from a deep cup base, MarketSmith analysis shows. It comes after it provided investors with a slew of early entries during the consolidation.

Tesla stock finished up nearly 2% for the day, and a weekly gain of just under 8%.

The stock has been going higher after another record quarter for the firm saw it beat earnings views.

Tesla stock is a member of the prestigious IBD Leaderboard list. 

Among other related stocks, General Motors (GM) fell nearly 1%, Ford (F) fell just over 1% and Chinese EV play Nio (NIO) gave up nearly 3%.

Snap Earnings Hits These Stocks

Snap (SNAP) gapped down and crashed almost 27% in big volume. It managed to dive below its 200-day line for the first time in more than a year.

The mobile app operator beat Q3 earnings views late Thursday. It also missed revenue views, though the key worry is the firm missed on Q4 revenue outlook.

It warned of slowing growth due to recent changes in Apple’s iOS privacy rule. These are making it harder to gather information from users and to target ads.

Alphabet (GOOGL) was hit as it is a large player in the online ad space, dipping about 3%. It continues to form a flat base.

Facebook (FB) finished down 5% while Twitter (TWTR) fell nearly 5%.

Nvidia Stock Leads Names Passing Entries

A clutch of noteworthy stocks tried to flex their muscles by rising above entries.

Nvidia managed to move its nose above a cup base buy point of 230.53, but closed below the entry. It comes after the chip play showed pluck by rallying back above its 50-day line.

Nvidia has excellent overall performance. It is looking to make server processor chips based on ARM technology, which puts it in the most direct competition with Intel so far.

CrowdStrike also retreated after trying to break out from a cup base buy point of 289.34. The cybersecurity stock has been on a tear of late, rising around 14% in the past four weeks alone.

Pool sits in a buy zone after breaking above a cup base entry of 500.95. The Long-Term Leader saw its relative strength line spike to a new high, which is a bullish sign.

Meanwhile, Workday moved above a buy point of 282.87, but finished the session below the entry. Earnings are the clear strength for this stock, with its RS Rating a decent 77 out of 99.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.

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