Dow Jones Gains Nearly 500 Points; Warren Buffett-Backed EV Hits Record Profit As Tesla Plunges

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The Dow Jones Industrial Average added to the morning’s gains and was up nearly 500 points, or 1.5%, in early afternoon trades Monday. The gains came as the Federal Reserve prepared for a two-day meeting starting Tuesday.

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Fed Chair Jerome Powell and the rest of the governing body are widely expected to keep rates unchanged. The meeting ends on Wednesday.

Meanwhile, the S&P 500 was up 1.1% in the stock market today. The Nasdaq pared some gains and was up 1% at the hour.

Tech heavyweights among the Magnificent Seven such as Meta Platforms (META), Google parent Alphabet (GOOGL) and Microsoft (MSFT) rose in a sputtering rally attempt after the Nasdaq undercut its follow-through day lows on Oct. 20 and sent the market into correction last week. The tech-heavy index met with some resistance at the 200-day line on Monday.

Volume was lower on the New York Stock Exchange but higher on the Nasdaq compared with the same time Friday.

The small-cap Russell 2000 gave up much of its gains and was up just 0.1%, while the Innovator IBD 50 ETF (FFTY) did better and rose 0.3%.

Crude oil fell nearly 3% to $83.12 a barrel. And the yield on the benchmark 10-year Treasury note rose 5 basis points to 4.9%. Yields remains near multiyear highs but have eased off after topping 5% and sending stocks reeling earlier this month.

Tentative Labor Deal For GM

General Motors (GM) reached a tentative labor deal with the United Auto Workers union Monday, The Wall Street Journal reported. GM is the last of the automakers to reach a pact with the union.

Over the weekend, UAW strikers approved a labor deal with Ford (F) after the automaker agreed to an $8.1 billion investment in new plants, and pay raises of at least 30% for full-time workers. GM shares were slightly lower, while Ford fell 1.5%.

On Friday, October’s payroll growth is seen coming in at 183,000, falling sharply from September’s 336,000 jobs gained, according to Econoday.

Dow Jones Stocks

McDonald’s (MCD) reported a strong third quarter. Global sales rose 11% while comparable sales were up 9% due to price increases. Earnings jumped 19% to $3.19 per share. The stock kept building on morning gains and was up more than 2% by midday.

Shares of Disney (DIS) rose on news that Nelson Peltz’s Trian Fund Management has more voting power and control of the board after acquiring the shares of Marvel executive Ike Perlmutter. Disney stock is reversing a four-day losing streak. Earnings are due next week.

Also on the earnings front, Apple (AAPL) expects to report late Thursday while Caterpillar (CAT) is due to file results Tuesday. Amgen (AMGN) also reports Tuesday. AAPL is testing the 200-day line, while CAT stock is trying to end a three-day losing streak. AMGN is below a buy point of 268.24 and below the 50-day line.

Apple is scheduled to hold its October event after market close Monday. The event is on watch for the release of a new iMac with the M3 processor chip. Apple’s September event saw the launch of the iPhone 15, while in June it launched the Apple Vision Pro.

Stocks Moving Today

Outside of the Dow Jones, On Semiconductor (ON) dived more than 15% and is below its 200-day line after third-quarter sales of $2.2 billion were nearly flat with the year-ago period. Earnings declined to $1.39 a share from $1.45 a share a year ago. Its fourth-quarter outlook also suggests flat sales growth.

Tesla (TSLA) rival and Warren Buffett-backed BYD (BYDDF) reported record net profit of $1.42 billion, up 82% from a year ago. The EV maker also saw margins reach a three year high of 22.12%. BYD has been slashing prices along with Tesla and also sells its batteries to other automakers. The stock rebounded off converged 50- and 200-day lines. TSLA fell 5%, to the lowest point since June 1.

Lattice Semiconductor (LSCC) reports after the market close along with chip companies Rambus (RMBS) and Wolfspeed (WOLF). All three are falling further below their key moving averages.

Advanced Micro Devices (AMD) also has fallen below converging 50- and 200-day moving averages ahead of earnings on Tuesday. Shares of Qualcomm (QCOM) rose and are approaching the 50-day line ahead of earnings, which are due Wednesday.

Also outside the Dow Jones industrials, Western Digital (WDC) saw its cloud revenue decrease while overall sales fell 26% to $2.75 billion from the prior year’s same quarter. The maker of data storage products also suffered a loss of $1.76 per share. The company announced plans to separate its flash memory and hard-disk drive businesses, creating two independent public businesses. Shares reversed higher, clearing the 200-day line and are now trying to retake the 50-day line.

IBD 50 stock Novo Nordisk (NVO) is rebounding off the 50-day line and has an alternate entry at 100.88. Third-quarter results are due Thursday. Also in the IBD 50, Eli Lilly (LLY) is at the 50-day line ahead of earnings this week. Cardinal Health (CAH) is forming a cup with handle with a buy point of 94.37.

Please follow VRamakrishnan on X/Twitter for more news on the stock market today.

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