Dow Jones Gains As Tech Stocks Charge; Warren Buffett Stock Explodes; GameStop Rallies

The Dow Jones Industrial Average gained but the Nasdaq shone brightest as tech stocks surged. Warren Buffett stock StoneCo (STNE) exploded on a management shake-up. GameStop (GME) rallied despite a loss. Apple (AAPL) and Salesforce.com (CRM) were among the top blue chips.

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A trio of names made bullish moves amid the encouraging action. Packaging Corp. of America (PKG), Trinity Industries (TRN) and Arista Networks (ANET) all passed buy points.

Volatility fell again, with the Cboe Volatility Index, or VIX, dropping 7%. Volume was higher on both the New York Stock Exchange and the Nasdaq compared with Thursday according to early data. Today was a quadruple witching day.

Meanwhile, the yield on the benchmark 10-year Treasury note slid around four basis points to 2.15%. Oil rose, with West Texas Intermediate crude rising 1.5% to nearly $105 per barrel.

Nasdaq Pops As Tech Stocks Lead

The Nasdaq rose most out of the major indexes, closing up 2.1%. Pinduoduo (PDD) was among the best performers here, finishing with a 8.2% gain. DocuSign (DOCU) performed even better, rising 9.5%.

The S&P 500 rose 1.2%. Leaderboard stock Nvidia (NVDA) was among the biggest winners, rising nearly 7%. But Match (MTCH) fared best with a 7.8% gain

The S&P sectors ended the day nearly all green, with technology and consumer discretionary rising most. Utilities was the only area to give up ground.

Small caps also managed to grind higher, with the Russell 2000 up 1%.

Growth stocks ended the day with a flourish. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, rose 1.3%.

Apple Stock Boosts Dow Jones

The Dow Jones Industrial Average made the most meager gain but still rose nearly 300 points. It closed up 0.8%.

Apple stock was one of the Dow’s winners, gaining 2.1%. AAPL stock is forming a base with a buy point at 182.04, according to MarketSmith analysis.

But it was Salesforce.com that was the top stock on the Dow Jones today. It closed up 4%. Verizon (VZ) was the worst laggard, falling 3%.

Warren Buffett Stock Explodes

It has been a horrible 12 months for Brazilian payments stock StoneCo, but it was fighting back with a vengeance Friday.

The Warren Buffett-owned stock exploded in enormous volume as it turned in a gain of 42%. This saw the stock smash through the vital 50-day moving average for the first time in over six months.

StoneCo stock still has a mountain to climb despite its big gain for the day because it is still down nearly 80% over the past 12 months.

In a shareholder letter, CEO Thiago Piau said the firm had “tried to do too much last year.” In Q3 the firm took a painful write-down on the valuation of its investment in Brazilian digital bank Banco Inter as well as pausing its credit operations.

While earnings Thursday missed some estimates, a 74% revenue jump to $336 million was above views. It also delivered upbeat Q1 revenue guidance.

The firm also unrolled a new management structure. CEO Piau said the changes will “simplify our operations” and create “greater strength across our management structure.”

Buffett’s Berkshire Hathaway (BRKB) has held the vast majority of its shares in the firm despite its decline. It currently holds 10.7 million shares, just over 4% of the float.

StoneCo is a former Leaderboard stock. Fellow Brazilian payments stock PagSeguro Digital (PAGS) surged in sympathy, gaining 23%.

IPO stock On Holding (ONON), a running shoe firm backed by tennis great Roger Federer, was another former Leader popping on results.

It posted an adjusted loss per share of 4 cents while revenue of $207 million in the period beat analyst views. Revenue guidance was also sunny. Shares gained 13.9% and retook the 50-day line.

GameStop Stock Rebounds

Meme stock GameStop managed to reverse higher despite the firm’s unexpected loss during the holiday quarter.

Revenue rose to $2.25 billion but the company ended up losing $1.94 per share.

The firm seems to have been boosted after it said it will launch a new nonfungible token marketplace by the end of Q2. CEO Matt Furlong said the firm is in the early innings of evolving into a “customer-obsessed technology company.”

GameStop stock closed up 3.5%. However it remains on a downtrend so far in 2022 and has shed about 41% of its value so far this year.

These Stocks Clear Buy Points

Packaging Corp. of America closed just under its buy zone after earlier clearing a consolidation pattern entry of 156.54. The stock boasts a good mix of earnings and stock market performance.

Trinity Industries remains actionable after breaking out of its own consolidation. The ideal entry here is 33.87. The RS line is at new highs.

The transportation equipment manufacturer has been seeing earnings gather pace in recent quarters, while its market performance is very strong. Big money has also been buying the stock of late.

Metaverse play Arista Networks has cleared an aggressive entry near 127. It is also forming a double-bottom base. The bullish move saw ANET join the IBD Leaderboard list of leading stocks.

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

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