Dow Jones Falls As Nasdaq Fights; Tesla Stock Rallies Back; Marijuana Stocks Higher On This Surprise

The Dow Jones Industrial average closed lower in a seesaw session. However the major indexes ended well off lows for the day. Tesla (TSLA) impressed by rallying out of the red.  Intel (INTC) and Merck (MRK) were top blue chips. Marijuana stocks gained after Tilray (TLRY) sprung a profit surprise.

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A couple of stocks managed to stage breakouts despite the negative action. Both were from more defensive areas. Insurance play W. R. Berkley (WRB) and East West Bancorp (EWBC) tested buy points.

Stocks were getting pressured as yields continued to rise, yet the heavy selling eased late in the session. The benchmark 10-year U.S. Treasury note ended up closing down slightly at 1.77%.

Nasdaq Reverses Higher; Growth Stocks Fall

The tech-heavy Nasdaq fought back well after an early pounding. It closed with a razor-thin gain of under 0.1%. Moderna (MRNA) was the top performer, rising 9.3% after the company firm updated its pipeline at the JPMorgan Healthcare Conference. It also hiked guidance for advanced purchase agreements for product sales to about $18.5 billion this year, up from a prior report of $17 billion.

The S&P 500 also narrowed losses as it closed down 0.1%. Humana (HUM) was among the best performers here, rising 6.1%. Shares got bashed in the first trading week of 2022. Take-Two Interactive (TTWO) plunged 13.1% on news it is buying mobile gaming company Zynga (ZNGA) for nearly $13 billion. The latter jumped 41% to 8.44.

Most of the S&P 500 sectors closed lower. Health and technology managed to turn in gains following recent pressure. Materials and industrials were the worst laggards.

Small caps also closed well off lows. The Russell 2000 fell 0.4%.

Growth stocks impressed with a late fightback. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, still closed down 0.4% though.

Dow Jones Slips Despite Intel Stock Gain

The Dow Jones Industrial Average was the worst major index of the day. It gave up 164 points as it fell almost 0.5%.

Intel was the top performing stock on the index, up 3.3%. This allowed it to close above its 200-day moving average.

It was closely followed by pharma major Merck, which gained 2.6%.

Nike (NKE) was the worst laggard on the Dow Jones today, giving up 4.2%. Boeing (BA) also lagged, falling 2.9%.

Tesla Stock Reverses Higher

EV leader Tesla impressed by fighting back to close higher.  It ended the session up 3%.

Tesla stock has given up all of its gains, and more, after clearing a trendline entry last week.

It has also fallen back after briefly passing a double-bottom base buy point of 1202.05.

Shares traded as high as 1,243.49 on Nov. 4. The stock is nearly 15% below this level.

It remains up more than 30% over the past 12 months however.

TSLA stock is a member of the prestigious IBD Leaderboard list of leading growth stocks.

Tilray Helps Marijuana Stocks With This

Marijuana stocks were given a boost after industry beast Tilray reported a surprise profit.

The company also revealed revenue jumped about 20% to $155 million amid stronger demand for cannabis products. This missed FactSet estimates for $170.5 million.

The marijuana stock surged 14% on the earning surprise, before coming down to close with a gain of about 12%. Despite this it remains mired under its 50-day line.

Tilray last month bought Colorado-based Breckenridge Distillery, a move that adds to a U.S. presence that consists of a craft brewer and hemp-granola maker, along with an investment deal with struggling cannabis retailer MedMen.

Other cannabis stocks also got higher on the news. Canopy Growth (CGC) rose more than 2%, Aurora Cannabis (ACB) popped over 4% while Green Thumb Industries (GTBIF) posted a marginal gain.

However, marijuana REIT Innovative Industrial Properties (IIPR) fell more than 4%. IIPR stock also took out its long-term 200-day moving average.

Bears Bite Chips Before Rally

Chip stocks struggled early, but managed to erase most of their losses heading into the close.

Nvidia (NVDA) managed to close up 0.6% after being mauled by the bears in early action. Nevertheless, it remains well shy of the key 10-week moving average.

Advanced Micro Devices (AMD) closed virtually flat amid the seesaw action. Whether this is a turning point remains to be seen, as it is still under its 50-day line.

Qualcomm (QCOM) closed off lows, but still fell 0.4%. The 50-day moving average provided support, an encouraging sign.

Alpha & Omega Semiconductor, a member of the prestigious IBD 50 list, closed with a painful loss of over 4%. It did manage to hold firm at the 50-day line though.

Both AMD and Qualcomm were axed from the IBD Leaderboard list of leading growth stocks Monday amid stuttering performance.

Tesla Stock Reverses As EV Stocks Struggle

EV leader Tesla impressed by fighting back to close higher.  It closed the session up 3%.

Tesla stock has given up all of its gains, and more, after clearing a trendline entry last week.

Shares traded as high as 1,243.49 on Nov. 4. The stock is nearly 15% below this level.

It remains up more than 30% over the past 12 months however.

TSLA stock is a member of the prestigious IBD Leaderboard list of leading growth stocks.

These Stocks Pass Buy Points

W. R. Berkley closed below a flat-base entry after briefly moving above its ideal entry point of 85.03. This is a second stage pattern, which is a positive for the insurance play.

The relative strength line is picking up but the fact earnings are due January 27 gives investors another reason for pause.

East West Bancorp also closed below its entry after trying to break out of a cup-without-handle base. The ideal entry here is 87.87.

Regional bank stocks have been performing well of late but earnings are also imminent for this EWBC stock.

With the market uptrend currently under pressure it is not advisable to open new positions at the current time.

It is worth keeping a close tab on stocks performing well under these conditions and add them to one’s watchlist however.

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

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