Dow Jones Falls As Ukraine Fighting Continues; 3 Defense Stocks Pass Buy Points; Tesla Surges After This

The Dow Jones Industrial Average fell as fighting continued to rage in Ukraine despite peace talks with Russia. Defense stocks Northrop Grumman (NOC), L3Harris Technologies (LHX) and Curtiss-Wright (CW) passed key buy points. Meanwhile Tesla (TSLA) shot up after a bearish analyst gave the stock a price-target hike.

A trio of other noteworthy stocks also attempted breakouts. Cybersecurity play Palo Alto Networks (PANW), Commercial Metals (CMC) and KBR (KBR) tested entries amid the seesaw action.

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Volatility surged, with the Cboe Volatility Index, or VIX, up 9.3%. Volume was higher on both the New York Stock Exchange and the Nasdaq according to early data.

Meanwhile, the yield on the benchmark 10-year Treasury note slipped about 15 basis points to 1.83%. Oil spiked though, with West Texas Intermediate crude climbing over 4%.

Ukraine Fighting Continues Despite Russia Talks

Russia was continuing to pound the Ukrainian capital of Kyiv. Residents rushed back into shelters amid reports of a Russian strike on the city outskirts.

The interior ministry of Ukraine has also claimed dozens of civilians were killed earlier today in Russian missile strikes on the country’s second biggest city, Kharkiv.

Fighting was ongoing despite representatives for both countries meeting for peace talks. So far a breakthrough has yet to be achieved.

Both sides agreed to continue talks and are set to meet again in the next few days.

However, Ukraine President Volodymyr Zelenskyy has called on Russian troops to lay down arms. He also demanded immediate EU membership.

Meanwhile, more economic sanctions have been leveled against Russia. This includes the U.S., the EU and other allies such as the UK agreeing to remove selected Russian banks from the Swift payments system.

Nasdaq Rallies Late As Growth Stocks Sparkle

The Nasdaq fared best out of the major indexes, actually posting a gain of 0.4%. Travel play Booking (BKNG) fared worst, dipping 4.7%. Cybersecurity stock Zscaler (ZS) was among the winners, popping 7.8%.

The S&P 500 closed off lows but fell 0.3%. Epam Systems (EPAM), part of the IBD Long-Term Leaders, was by far the main loser within that benchmark. Its share price almost halved after the software development company withdrew financial guidance following Russia’s invasion of Ukraine.

The S&P sectors ended the day mixed. Energy and industrials made the best gains. Financials and real estate were the worst performers.

Small caps managed to fight off the bears, with the Russell 2000 closing up 0.4%.

Growth stocks fared best of all, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, rising 0.8%.

Dow Jones Dips As Chevron Stock Leads

The Dow Jones Industrial Average closed off lows for the day but still gave up 0.5%.

Oil major Chevron (CVX) was the big winner on the Dow Jones today. It closed up 2.6%.

JPMorgan Chase (JPM) was the big loser as bank stocks slumped. It closed down 4.2%. The money center bank is now well shy of its 50-day moving average.

These Defense Stocks Pass Buy Points

Northrop Grumman ended the session extended past a proper buy point after its surged past a flat-base entry of 409.07.

The relative strength line is spiking higher, lending credibility to the move. This gauges a stock’s performance vs. the S&P 500.

Fellow defense giant L3Harris is currently actionable after rising above a 246.18 entry.

The move came in high volume, a positive, while the RS line hit a new high. The stock offers good market and earnings performance.

Aerospace stalwart Curtiss-Wright flew past its own seven-week flat base and a buy point of 142.56.

Tesla Stock Surges On This

Tesla stock closed the session with a meaty gain of 7.4% after a noted bearish analyst on Wall Street gave it a 50% price-target hike.

This allowed TSLA stock to climb back above the key its 200-day moving average. There is no new entry in sight for now though.

Tesla stock was boosted by a price-target raise to 450 from 300 by Bernstein even though the firm retained its underperform rating on the stock. This was the first time it raised its target since last August.

“One obvious justification for TSLA’s valuation is its unique growth profile, which stands out, even among tech companies,” analyst Toni Sacconaghi said in a research note.

He also said that profit margins “will be a key factor” to its valuation over the long term. He also thinks that any price boost from self-driving capabilities will eventually be “competed away over time.”

Tesla stock is a quarter-size position and member of the prestigious IBD Leaderboard list of leading growth stocks.

Cybersecurity Stock Leads These Breakouts

Palo Alto Networks stock has rebounded powerfully amid the Ukraine crisis. The cybersecurity play is in a buy zone above a 572.77 entry from a consolidation pattern.

PANW stock surged Friday further above the 50-day moving average to just below the buy point. This is impressive given how growth stocks have generally been struggling in the current market.

The relative strength line for Palo Alto stock bolted to a record high, according to MarketSmith chart analysis. That was a big positive as it staged its breakout.

Commercial Metals stock briefly moved above a consolidation pattern buy point of 38.82, though it closed just under the buy zone.

The relative strength line has just hit a new high, bolstering its case. Steel stocks have been shining of late and big money has been snapping up CMC stock. It boasts an A Accumulation/Distribution Rating.

Construction play KBR also closed below its entry after briefly popping above a cup-base buy point of 50.09. All-around performance is solid here, which make this a stock worth watching.

Read more about KBR in last Friday’s installment of the IBD Stock Of The Day.

With the stock market currently in a correction, investors should remember any buys carry extra risk.

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

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