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Stock market today: Dow Jones hits 40,000, small caps cool off, Walmart rises 6% on earnings; New Warren Buffett shares are rising




Stock market today: Dow Jones hits 40,000, small caps cool off, Walmart rises 6% on earnings;  New Warren Buffett shares are rising

The Dow Jones Industrial Average reached the 40,000 mark before continuing to rise slightly in late afternoon trading. Small caps cooled down. Some blue chips led the stock market today Walmart (WMT) jumped in heavy volume as it broke out with solid gains, while Chubb (C.B) rose sharply as it became Warren Buffett’s last major holding.


The Dow Jones breached the 40,000 mark several times during the morning, while rising marginally after a 0.9% rally on Wednesday. On Thursday, the index reached 40,051 intraday, chasing its eleventh increase in twelve sessions. The popular blue chip index, which is still up almost 0.2% with an hour left in the trading session, is up 6.3% so far in 2024.

The Dow Jones move came one day after the rally boosted Investor’s Business Daily’s suggested equity exposure. Some market observers highlighted the positive impact that artificial intelligence – in addition to a growing economy and healthy corporate profits – is having on the market.

“We are experiencing the fourth wave of innovation since the 1960s related to AI, automation and profitability,” Scott Helfstein, head of investment strategy at Global X, wrote in an email to IBD. “That boom has worked out well for companies and stocks in the past. Expansion to new highs typically takes two years and delivers returns of 50%.”

AI and data center related companies including Super microcomputer (SMCI), Dell Technologies (DELL) And Microsoft (MSFT) returned in decent form after posting big gains on Wednesday. These companies got some airtime during Thursday IBD Live Show.

Stock Market Today: Transportation Stocks Cut Losses

The Dow Jones transportation average, which lagged the major indexes on Wednesday, fell as much as 0.5% early Thursday. But the index has almost wiped out those losses and is slightly higher.

Dow Jones Market Data showed that the biggest contributors to the Dow Industrials’ rise from 30,000 to 40,000 included Goldman Sachs (GS), Microsoft (MSFT), Name of long-term IBD leaders United Health (UNH) And Caterpillar (CAT).

Please note that the Dow Jones Industrial Average is a price-weighted index and not market capitalization weighted.

Meanwhile, the Nasdaq composite fell in late trading. The S&P 500 was flat. Both rose to record highs on Wednesday after an inflation report showed that US consumer prices had stopped rising.

The Russell 2000 fell 0.4% after big gains in the previous three sessions; the S&P MidCap 400 fell 0.6%. Both indices remain comfortably above their 50-day moving averages.

Volume rose from the same time on the Nasdaq on Wednesday and fell on the New York Stock Exchange. Keep in mind that meme stocks have had a huge impact on volume totals this week.

The breadth in the stock market was also about the same on Thursday. According to ThinkorSwim, 2,042 stocks rose on the Nasdaq, while 2,115 companies fell. On the NYSE, the decliners were 1,529 ahead of the advancers compared to 1,401.

In other financial markets, crude oil futures rose 0.9% to $79.34 a barrel, while natural gas rose 3%. Gasoline futures rose 1.7%, while gold fell 0.4% to $2,385 an ounce.

A perfect breakout by this leading growth share; How to Use IBD Screener to Find Others

Retail trader breaks out in the stock market today

Walmart added fuel to the bullish story in stocks with solid same-store sales growth. The company also reported solid year-over-year increases in other segments, such as digital advertising and global e-commerce.

Walmart shot up more than 7% to top a double-bottom chart pattern with an entry of 60.89. Earnings in the first fiscal quarter ended in April rose 22% to 60 cents per share, while total revenue rose 6%.

Growth investors generally prefer companies in the large-cap and mega-cap arena that can grow earnings faster than revenue. This implies strong pricing power or the ability to reduce costs, thereby increasing margins.

Walmart is “the perfect example of our investment theme of old economy companies that have transitioned to digitalization, generative AI, robotics and cloud computing,” Nancy Tengler, chief investment officer at Laffer Tengler Investments, wrote in an email to IBD. Tengler added that Walmart’s decision to increase its dividend by 9% was an unusually bullish move.

Insurance industry leader A New Buffett Holding

Insurance giant Chubb became Warren Buffett’s latest major holding company, according to filings with the Securities and Exchange Commission. Chubb shares rose nearly 5%.

Chubb, one of the first big gainers of the day, also rose above a 260.58 buy point in a flat nine-week base. The 5% buy zone goes up to 273.61.

The company has posted strong earnings gains in an industry that has sharply increased premiums. Chubb’s profits have risen 17%, 58%, 108% and 23% over the past four quarters from year-ago levels. MarketWatch reported that Buffett’s holding company, Berkshire Hathaway (BRKA), owned 25.9 million Chubb shares as of March 31.

However, Wall Street expects the company, now based in Switzerland, to see a 4% decline in earnings this year to $21.67 per share.

Bloomberg Intelligence reported that Buffett may have been attracted to Chubb’s extensive reinsurance business.

According to IBD Stock CheckupChubb has a respectable Composite Rating of 91 out of a best possible 99.

Today’s show: Deere, Dillard’s Fall

Meanwhile, there are some individual companies including Deere (THE) And Dillard’s (DDS) decreased as a result of disappointing quarterly reports.

Agricultural machinery supplier Deere fell by more than 4% and fell below 400% on high turnover. The stock attempted to pass a 414.80 buy point within a long, winding base. Deere shares are trying to gain support at the 50-day moving average. Volume zoomed three times from the stock’s typical level.

Deere beat the lower top and bottom line views but gave a soft outlook.

Dillard’s fell 3% and briefly fell below 440 in heavy volume. Earnings fell 6% to $11.09 per share, while revenue fell 4% to $1.55 billion. The department store chain, mainly located in the South, is nevertheless building a new base with a correct buy point of 476.48.

Construction and road construction-related companies also fell massively. Certainly, such stocks have made strong runs in recent years. Eagle materials (EXP) fell by almost 5% in above-average volume. The gypsum and cement supplier has gained 36% year to date and has tried to break out of a narrow base with a buy point of 272.72.

Now Eagle is testing critical support at the 50-day moving average. Irish asphalt and cement company CRH (CRH) fell as much as 3%, losing much of its gains over the previous two sessions.

Post-closing earnings

After the close, the stock market will be paying close attention to gains Applied materials (AMAT), with a relative strength rating of 92, and auctioneer of salvaged cars Code part (CPRT) and its 81 RS score.

Analysts see Applied Materials, the chip equipment giant, posting earnings of $1.84 per share in the April quarter, up 3%, on revenue of $6.04 billion.

The highest individual earnings estimate is $1.96 per share, which would represent a 10% annualized gain.

Follow Chung on X/Twitter: @saitochung And @IBD_DChung

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