Dow Jones Rallies As Apple Earnings Loom; Warren Buffett Stock Offers ‘Attractive Entry Point’

The Dow Jones Industrial Average surged as Treasury yields plunged. An analyst says that what may be called the ultimate Warren Buffett stock, Berkshire Hathaway (BRKB), is offering an attractive entry. Apple (AAPL) popped ahead of earnings while Starbucks (SBUX) soared.

X

A few stocks broke out in high volume amid the ebullient action. Tenaris (TS), Afya (AFYA) and Cigna (CI) all cleared entries in strong volume. But Vistra (VST) broke out of a flat base in weak volume.

Yields Plunge Amid Cautious Fed Chair Powell

Bulls were continuing to charge hard Thursday after Federal Reserve Chair Jerome Powell took a more cautious stance following yesterday’s Fed meeting.

“We’ve come very far with this rate-hiking cycle,” Powell said. “We’re proceeding carefully because we can proceed carefully at this time. Monetary policy is restrictive (and) we see its effects.”

Investors have taken this as a sign central bankers are done raising rates. Treasury yields retreated as equities rallied. The 10-year yield fell 12 basis points to 4.67%, the 30-year fell 16 basis points to 4.82% and the 5-year yield skidded 7 basis points to 4.63%.

Tomorrow’s jobs report is now key, says Oanda Senior Market Analyst Edward Moya.

“If Wall Street sees a soft NFP (nonfarm payrolls) report tomorrow, you can kiss the chance of one more Fed rate hike this cycle goodbye,” he said.

Nasdaq Jumps As Small Caps Outperform

The tech-heavy Nasdaq was soaring heading into the close, rising almost 2%. EV stock Lucid (LCID) outperformed as it popped nearly 13%. But onetime darling Moderna (MRNA) plunged around 8% as it posted a sharp loss on waning Covid vaccine demand.

The S&P 500 also vaulted nearly 2%. Teleflex (TFX) popped almost 12% on quarterly results.

The S&P 500 sectors all made gains. Real estate and energy were performing best on the stock market today. Communication services made the slimmest gain.

Small caps gave the bears a bloody nose, with the Russell 2000 up over 2%. Growth stocks lagged the major indexes though, with the Innovator IBD 50 ETF (FFTY) slightly negative.

Dow Jones Today: Apple Earnings Loom, Nike Jumps

The Dow Jones Industrial Average was also looking strong, rising 1.5% in late trading.

Apple stock was rallying ahead of its quarterly report after the close. The stock is trying to retake the 50-day moving average, though this would be a very risky entry ahead of results.

Apple earnings are seen rising nearly 8% to $1.39 per share even as revenue slips around 1% to $89 billion.

Nike (NKE) and Walgreens Boots Alliance (WBA) were the best performing stocks on the Dow Jones today, both rising around 4%.

Only Travelers (TRV) and Merck (MRK) lagged, though both fell marginally.

Ultimate Warren Buffett Stock Offers ‘Attractive Entry’

Berkshire Hathaway is getting set to post third-quarter earnings on Saturday. And a Wall Street analyst has spoke out to say the stock is currently offering an attractive entry point.

CFRA analyst Catherine Seifert said in a research note that the stock is attractively priced.

“At current levels, Berkshire’s Class B shares trade at 17x our 2025 operating EPS estimate of $19.95 and at 18x our 2024 EPS estimate of $18.85, a 20% discount to the three-year average forward multiple of 22.6x, offering investors an attractive entry point to acquire the shares,” she said.

Seifert believes investors should take into account the Buffett-led firm’s Occidental Petroleum (OXY) strategy, its overall acquisition strategy and its plans for share buybacks.

Berkshire Hathaway was up more than 1% heading into the close. However, it is currently trading below its 50-day moving average, a bearish sign.

Nevertheless, it is off consolidation lows as it continues to form a flat base with an ideal buy point of 373.34, MarketSmith analysis shows.

Starbucks Earnings Sparks Caffeine High

Starbucks (SBUX) came to the boil after it served up a beat on the top and bottom lines in its latest quarterly report.

It gapped up through its 50-day moving average and its 200-day line as it soared around 11%. Nevertheless, the fact the 50-day line remains below the 200-day gives its chart a longer-term bearish look.

Other earnings movers included Qualcomm (QCOM), which jumped more than 5% after surpassing views for its fiscal fourth quarter.

Palantir (PLTR) also impressed, soaring around 20% after the company bested Q3 earnings views. It remains shy of a pattern entry of 20.24.

However, SolarEdge (SEDG) remained down around 6% despite moving off session lows after the firm missed revenue expectations and served up disappointing guidance.

Outside Dow Jones: 3 Stocks Test Entries

Now is the time for investors to be looking out for stocks staging breakouts. Here were some of the notable movers today.

Tenaris is in a buy zone after it cleared an entry of 34.20. It popped after revenue topped estimates.

Overall performance is strong here, which is reflected in its IBD Composite Rating of 94.

Afya tested a cup-base entry of 17.17 in above-average volume. The stock is in the top 7% of issues in terms of price performance over the past 12 months. Earnings are due in 11 days.

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.

Cigna cleared a cup with handle entry of 316.14. The managed health care stock popped after it beat earnings views.

Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.

YOU MAY ALSO LIKE:

These Are The 5 Best Stocks To Buy And Watch Now

Join IBD Live Each Morning For Stock Tips Before The Open

This Is The Ultimate Warren Buffett Stock, But Should You Buy It?

This Is The Ultimate Donald Trump Stock: Is DWAC A Buy?