The Dow Jones Industrial Average fell while other indexes rose ahead of the presidential election and many other ballot items. Warren Buffett-led Berkshire Hathaway (BRKB) fell as the firm sold more Apple (AAPL) shares. Nvidia (NVDA) gained amid news it is joining the Dow but other Magnificent Seven names like Tesla (TSLA) and Meta Platforms (META) fell.
Stocks fell last week amid pre-election volatility and were mixed to start the week ahead of Tuesday's nationwide elections. Lower volume in early trading reflected the current uncertainty. The much-watched Dow Jones index skidded more than 100 points, or 0.3%. Home Depot (HD) and 3M (MMM) were faring best in the index.
↑ XThe Nasdaq composite rose 0.2%. The tech-heavy index continues to hold above its 50-day moving average. Dollar Tree (DLTR) was one of the better performers while Super Micro Computer (SMCI) had a 5% dead cat bounce.
The benchmark S&P 500 was fractionally positive. Mosaic (MOS) was one of the best performers in the S&P 500 as it jumped more than 7% each. But Constellation Energy (CEG) struggled badly as it plunged around 12%. It round-tripped a gain of more than 20% from a 236.30 entry as it dived despite an earnings beat.
The S&P 500 sectors were mixed, with a bias to the upside. Energy and real estate were having the best early innings. Communication services and utilities, the latter a defensive area, lagged the most.
Small caps outperformed, with the Russell 2000 up 0.4%. The Innovator IBD 50 (FFTY) exchange traded fund was up 0.1%.
Buffett's Berkshire Hathaway was lower in early trade Monday after the firm posted earnings over the weekend. The conglomerate fell more than 2% and undercut the lows from a first-stage flat base. The ideal buy point here is 484.82.
It comes after earnings fell 6% on an operating basis vs. a year earlier to to $10.09 billion. Analysts had expected a 1% decline in operating earnings in the third quarter, according to FactSet.
In a noteworthy move, Buffett halted Berkshire stock buybacks during the quarter. It comes after the firm made share repurchases worth $345 million in Q2 and $2.6 billion in Q1.
Berkshire also sold a further 100 million Apple shares in Q3, according to the company's 10-Q statement. This leaves it with 300 million shares. Buffett has slashed the down from 905 million shares at the start of 2024.
Buffett, who has been Berkshire's CEO since 1970, has been building up a sizable stash of cash. His company's cash hoard swelled by about $48 billion to $325.21 billion.
One major stock moving positively was Nvidia. The artificial intelligence play was outperforming on the news it is to join the Dow Jones Industrial Average.
The stock is just below a consolidation entry of 140.76, according to MarketSurge analysis. Earnings performance is a key strength for the stock, which has a perfect EPS Rating of 99.
Earnings have grown by an average of 361% over the past three quarters, an impressive performance in anyone's book.
It is taking the place of struggling chip giant Intel (INTC), which fell nearly 2%.
Nvidia is a long-standing member of the IBD Leaderboard list of top stocks.
This isn't the only move. Paint giant Sherwin-Williams (SHW) is being swapped in favor of Dow Inc. (DOW). The changes to the Dow index take place on Nov. 8.
Action among the other so-called Magnificent Seven stocks was negative. The bulk of the group have now posted their quarterly earnings reports, removing some uncertainty.
Tesla stock fell nearly 1%. The stock flashed a sell signal by falling more than 7% below a cup-with-handle entry of 264.86.
The relative strength line is also dipping. Chief Executive Elon Musk has been a source of controversy of late amid his support for former President Donald Trump.
Google parent Alphabet (GOOGL) fell more than 1%. Amazon.com (AMZN), Meta Platforms, Apple and Microsoft (MSFT) were all down less than 1% each.
Investors should be keeping their peepers open for stocks near buy points.
MercadoLibre has formed a flat base with an ideal buy point of 2,161.73, MarketSurge analysis shows. This is a second-stage base, which still counts as early stage.
All-around performance is very strong for the Latin America e-commerce play. This is reflected in its near-perfect IBD Composite Rating of 98.
MercadoLibre is a member of the prestigious IBD Leaderboard list of top stocks. Earnings are due late Wednesday (Nov.). That adds risk to buying shares, although the stock has not topped its buy point. It currently sits at the 50-day moving average.
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.
Medical products play Insulet (PODD) has formed a flat base with an ideal buy point of 243.98.
It is a top all-around performer, with its Composite Rating sitting at 96. Big Money has been snapping up shares of late, with its Accumulation/Distribution Rating coming in at A-.
This is one for the watchlist because earnings are due after the close Thursday. The diabetes play develops and sells insulin management systems.
Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.
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