The Dow Jones Industrial Average slipped even as McDonald’s (MCD) jumped more than 3% after its earnings report. Other indexes trimmed gains. Tesla (TSLA) was named a top pick by Morgan Stanley while fellow Magnificent Seven stocks Apple (AAPL) and Nvidia (NVDA) also got bullish calls.
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The tech-heavy Nasdaq composite was up nearly 1% but pared its gain to 0.5%. ON Semiconductor (ON) was strongest here as it soared 13% after topping earnings views. Also, Dexcom (DXCM) had a dead cat bounce, popping more than 4%.
The benchmark S&P 500 also trimmed gains and was up only 0.1%. ResMed (RMD) was among the best performers in the index, rising nearly 4%. Abbott Laboratories (ABT) slid over 4% after a jury found it failed to warn that its Similac formula for premature infants increased the risk of a bowel disease, and ordered the firm to pay $495 million.
Stock Market Today: Consumer Discretionary Strong
Meanwhile, the S&P 500 sectors were mixed. Consumer discretionary and communication services were strongest while financials and energy lagged.
Small caps lagged, with the Russell 2000 down 0.6%. The Innovator IBD 50 (FFTY) exchange traded fund fell 0.4% on the stock market today.
The Dow Jones industrials were also lagging vs. the other major indexes, down 0.3%. Breadth was mixed, with more losers than winners on the blue-chip index.
Dow Jones Today: McDonald’s Earnings Miss
Breakfast was a surprisingly happy meal for McDonald’s investors today. The stock rallied more than 3% despite the firm serving up disappointing earnings. Earnings per share fell 6% to $2.97 while sales held virtually steady at $6.49 billion. Both were worse than analysts expected. Same-store sales fell 1%, also below views. The company did reaffirm guidance.
McDonald’s has been trying to lure lower-end consumers back to its stores by offering value meals. The firm has already moved to extend the initiative beyond the initial four-week runtime.
Walt Disney (DIS) also outperformed, rising more than 1% following the strong weekend performance of superhero film “Deadpool & Wolverine.”
3M (MMM), Honeywell International (HON) and Chevron (CVX) lagged in the Dow Jones today.
Magnificent Seven: Analysts Bullish On Tesla, Nvidia
The so-called Magnificent Seven were moving higher Monday following some bullish Wall Street calls.
Tesla surged more than 6% after it was named a “top pick” by Morgan Stanley auto analyst Adam Jonas.
“While Tesla is still making cars, we note the company is aggressively redeploying incremental resources, technology, people and capital away from the auto side of the house,” Jonas said in a note to clients.
The move allowed Tesla stock to pop back above its 21-day exponential moving average. Ford (F), which lost its top-pick status, fell nearly 2%.
Cantor Fitzgerald reiterated its overweight rating on Nvidia. The price target here is 175. The hot AI stock is currently trading around 114, below its 50-day moving average, MarketSurge analysis shows.
Google parent Alphabet (GOOGL) rose more than 1% while Meta Platforms (META), Amazon.com[ticker symb=AMZN] and Microsoft (MSFT) were up less than 1% each.
Apple was down slightly despite TD Cowen reiterating a buy rating on the stock and raising its price target to 250.
It is a crunch week for the Mag 7, with Apple, Meta, Amazon and Microsoft all set to report earnings.
Outside Dow Jones: These Stocks Eye Entries
A few highly rated stocks were eyeing potential buy points on the stock market today.
Victory Capital (VCTR) is eyeing a cup base entry of 54.94 on the stock market today. Earnings performance is strong here, with Victory’s EPS Rating a solid 90. Earnings are due in three days, though.
An approach highlighted by Investor’s Business Daily is to use options as a strategy to reduce risk around earnings. It’s a way to capitalize on the upside potential of a stock’s move around earnings, while reducing the downside risk.
Big Money has been snapping up VCTR shares of late, with the stock’s Accumulation/Distribution Rating sitting at B-.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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