Stock Market Gains, Led By Tech; Musk Announces 9% Stake In Twitter

The stock market gained Monday at midday on the strength of technology and social media stocks following Elon Musk’s disclosure of a major stake in Twitter (TWTR).

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The Nasdaq composite jumped 1.6%. The Consumer Discretionary SPDR (XLY) gained 1.5%, helped by Tesla‘s (TSLA) 4% jump. Amazon.com (AMZN) advanced 1.9%. Technology Select Sector SPDR (XLK) rose 1.4%, and Communication Services Select Sector SPDR (XLC), which has a heavy weighting in internet stocks, climbed 1.6%.

The S&P 500 rose 0.6%. The Dow Jones Industrial Average tacked on 0.1%. The Russell 2000 small-cap index climbed 0.2%. Volume fell on the Nasdaq and rose on the NYSE compared with the same time on Friday.

Twitter soared nearly 25% after Tesla (TSLA) CEO Elon Musk disclosed ownership of a 9% stake in the social media company.

Russia-Ukraine War’s Impact On Stock Market Drops

The price of U.S. crude oil was back above $100, rising 3.8% to $103 a barrel as the Russia-Ukraine war dragged on.

Russian missiles continued to strike Ukraine as citizens there braced for a renewed Russian offensive in the eastern regions of Donetsk and Luhansk. Investors are also watching reports of war crimes, which could provoke the U.S. and other Western powers to step up sanctions against Russia. But the war was not gaining the attention of investors that it had been receiving over the past two months.

In an SEC filing Monday, Musk reported owning about 73.5 million shares of Twitter. The stake is valued at $2.89 billion as of Friday’s closing price, the Wall Street Journal said. That makes Musk Twitter’s largest shareholder.

Meanwhile, Tesla jumped 4% and approached its buy point of 1208.10 of a cup base. The company announced on Saturday first-quarter deliveries of about 310,000 vehicles. The total, which met estimates, marked a quarterly record and an increase from some 309,000 deliveries in the fourth quarter.

Roche Shares Break Out

Roche Holding (RHHBY) American depositary shares rose 2.2%, breaking into the buy range. The Swiss-based pharmaceutical and medical devices company is building off a cup-with-handle pattern with a 50.69 buy point.

Advanced Micro Devices (AMD) rose 1.5% after AMD announced plans to buy chip startup Pensando Systems for $1.9 billion. The proposed deal would seek to take advantage of growing demand for chips in light of the global supply crunch for semiconductors. Milpitas, Calif.-based Pensando produces chips and software designed to speed data flow and lower operating costs for big server farms.

Digital World Acquisition (DWAC) tumbled 10% in an apparent reaction to the Twitter news. Digital World is a SPAC that plans to bring Donald Trump’s social media app, Truth Social, public. The app was launched to rival Twitter, which Trump and many critics say restricts free speech.

Starbucks (SBUX) fell 5% in a gap-down after the company announced it is immediately halting its stock buybacks.

Interim CEO Howard Schultz said in a letter to shareholders that the move will allow Starbucks to “invest more into our people and our stores — the only way to create long-term value for all stakeholders.” Starbucks stock is down 26% so far this year.

IBD 50 Gains On Oil, Health Stocks

Acuity Brands (AYI) fell nearly 2% in advance of the company’s quarterly earnings statement, which was due to be released after the close of business today. FactSet analysts expect $2.37 earnings per share for the maker of lighting products for the construction industry. AYI is working on a long consolidation with a buy point of 224.69.

SunPower (SPWR) gapped up to a nearly 9% gain in heavy trading, which put the stock back at its 200-day moving average for the first time since Dec. 3. Bank of America upgraded the solar power stock to neutral from underperform, while Goldman Sachs raised its price target to 20 from 15.

Roku (ROKU) jumped 7% in big volume after the company announced it reached a multiyear extension for Amazon’s Prime Video and IMDb to remain on Roku’s platform. Terms were not disclosed in a brief statement.

The Innovator IBD 50 ETF (FFTY) rose 0.4% as oil and health care stocks, among others, boosted the IBD 50 index.

Follow Michael Molinski on Twitter @IMmolinski

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