Dow Hits 40,000 on Walmart Gain; Warren Buffett Shares Are Rising - Latest Global News

Dow Hits 40,000 on Walmart Gain; Warren Buffett Shares Are Rising

The Dow Jones Industrial Average continued to flirt around the 40,000-point mark during afternoon trading on Thursday, a day after a key rally led to an increase in investor’s Business Daily recommended exposure to stocks. Some blue chips led the stock market today: Walmart (WMT) jumped on solid earnings and an insurance giant Chubb (CB) became Warren Buffett’s latest major holding.


The Dow Jones topped 40,000 several times during the morning, rising 0.2% after gaining 0.9% on Wednesday. On Thursday, it hit 40,051 intraday points, aiming for its 11th rise in 12 sessions. In the most recent action it hovered around the 40,000 mark. The popular blue-chip index has gained 6% so far in 2024.

Some market observers highlighted the positive impact that artificial intelligence is having on the stock market today, alongside a growing economy and healthy corporate profits.

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

Stock market today: Transportation stocks reduce losses

But the Dow Jones transportation average, which underperformed major indexes on Wednesday, fell as much as 0.5% early Thursday. But the index almost wiped out those losses.

Meanwhile, the Nasdaq Composite rose 0.1%. The S&P 500 gained 0.2%. Both rose to all-time highs on Wednesday after an inflation report showed U.S. consumer prices stopped rising. Overall CPI rose 0.3% month-on-month in April, matching Econoday’s consensus forecast. It rose 3.4% year-on-year, slowing from a 3.5% rise in March.

Volume was up on the Nasdaq and down on the New York Stock Exchange compared to the same time on Wednesday.

The breadth of the stock market was also roughly balanced today. According to ThinkorSwim, 1,966 stocks rose on the Nasdaq while 2,009 companies fell. On the NYSE, decliners outnumbered advancers, with 1,477 versus 1,394.

Also some individual companies, including Deere (DE) and Dillard’s (DDS) fell due to disappointing quarterly reports.

A perfect breakout from this leading growth stock; How to use the IBD screener to find others

Retailer is breaking out on the stock market today

Walmart, the discount titan, fueled the stock’s upward trend even further with solid same-store sales growth. The company also posted solid year-over-year growth in other segments such as digital ads and global e-commerce sales.

Walmart rose more than 6%, surpassing a slight double bottom chart pattern that showed a 60.89 entry point. Profit rose 22% to 60 cents per share in the fiscal first quarter ended April, on a 6% increase in total revenue.

For a double bottom, the second sell-off must have a low that undercuts the first sell-off low.

On the Walmart chart, the stock hit a first low of 58.88 and a second low of 58.55. This means that the middle peak between the two lows, 60.89, marks a buy point within the bullish chart pattern seen in many previous big stock market winners.

Growth investors should generally favor large-cap and megacap companies whose earnings are growing faster than sales. This implies strong pricing power, or the ability to reduce costs and thus increase margins.

Market leader in the insurance sector A new Buffett holding company

Insurance giant Chubb is Warren Buffett’s latest major holding, according to filings with the Securities and Exchange Commission. Chubb shares rose nearly 4%.

Chubb, one of the day’s first big risers, rose more than 4% to hit a session high of 270.16. Shares also rose above the proper buy point of 260.58 on a nine-week basis. The 5% buy zone from 260.58 increases to 273.61.

The company posted notable profit gains in an industry where premiums have been rising sharply. Chubb’s profits have increased 17%, 58%, 108% and 23% over the last four quarters compared to 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 Switzerland-based company to post a 4% drop in earnings this year to $21.67 per share.

According to IBD Stock Checkup, Chubb has a respectable 91 Composite Rating on a scale of 1 to 99. The IBD Composite Rating combines fundamental, technical and fund ownership metrics into a single, easy-to-use score. However, it is best used as a stock selection tool rather than for timing purchases and sales on a single stock market leader.

Stock Market Today: Magnificent Seven Rally as Deere, Dillard’s Fall

Elsewhere, five of the “Magnificent Seven” megacap technology companies rallied, pushing Nasdaq 100 tracker Invesco QQQ Trust (QQQ) up 0.2%. But smaller stocks cooled. The Russell 2000 fell almost 0.3%.

Farm equipment supplier Deere fell more than 3%, falling below 400 on high sales. The stock tried to break above the 414.80 buy point within a long, convoluted base. Deere stock is trying to gain buying support at a key technical level on its chart, the 50-day moving average.

Deere managed to beat declining sales and profit forecasts, but gave a weak outlook.

Dillard’s fell 1% to 448.64 on heavy volume. Profit fell 6% to $11.09 per share, while revenue fell 4% to $1.55 billion. However, the mainly southern-based department store chain is building a new base with a correct buy point of 476.48.

Companies active in construction and road construction also collapsed en masse. Certainly, such stocks have seen strong gains in recent years. Eagle Materials (EXP) fell more than 5% on above-average volume. The gypsum and cement supplier has gained 36% year to date, attempting a breakout from a narrow base with a 272.72 buy point.

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

Laggards on the Chinese stock market

In addition, a Chinese manufacturer of electric vehicles Li car (LI), a real laggard so far this year, fell 3% after announcing 18% staff cuts. Shares are down 32% year-to-date.

Li Auto, a former high-flyer after the pandemic stock market bottom in April 2020, fell 2.6%. Shares remain below their falling 50-day and 200-day moving averages in the stock market today, a bearish sign.

Li has a Weak Relative Strength Rating of 12 on a scale of 1 to 99. Generally favor growth leaders in the stock market with an RS Rating of 90 or higher.

After the market closes, the stock market will pay close attention to profits Applied materials (AMAT) with a Relative Strength Rating of 92 and an auctioneer for scrap cars Copart (CPRT) and its 81 RS score.

Please follow Chung on X/Twitter: @saitochung And @IBD_DCung

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