On Monday, the stock market faced a downturn as Apple (AAPL) encountered a substantial fine, leading to a drag on the Dow Jones index. However, amidst this, Nvidia (NVDA) and Super Micro Computer (SMCI) experienced notable gains. Notably, investor attention was drawn to Cathie Wood’s opportunistic move amidst the stock plunge, while three stocks from Warren Buffett’s portfolio hovered near potential entry points. Additionally, Rollins (ROL) and Fortinet (FTNT) exhibited promise as they approached potential buy points.
Apple’s decline was significant, as it fell 2.5% following news of a $1.95 billion fine imposed by the European Union. The EU’s executive body, the European Commission, accused Apple of violating antitrust rules by restricting app developers from informing users about alternative subscription methods for music-streaming services. This development underscored concerns about Apple’s conduct over nearly a decade, potentially leading to higher costs for iOS users. Oil major Chevron (CVX) faced a similar fate, declining 2.6%, while other Dow components like Nike (NKE) and Merck (MRK) also lagged.
Amidst the gloom, some stocks showed resilience. Intel (INTC) emerged as a top performer on the Dow Jones, rising 4.1%. International Business Machines (IBM) also stood out with a 2.6% gain, forming a base with a potential buy point at 196.90. These performances offered a glimpse of optimism amidst the broader market decline.
Meanwhile, several stocks from Warren Buffett’s portfolio caught investors’ attention as they neared potential entry points. Homebuilder Lennar (LEN) remained in a buy zone after surpassing a flat-base buy point of 156.01. Its strong performance and solid fundamentals, reflected in an IBD Composite Rating of 94 and an EPS Rating of 81, positioned it as one of the better-performing stocks in the market. Floor & Decor (FND) also showed promise after recently breaking out from a flat base entry of 116.70. Although its earnings were a concern, its strong price performance over the last 12 months and potential for growth in 2025 signaled optimism among investors. Ally Financial (ALLY) flirted with a flat-base entry of 38.03, despite a 1.2% loss for the day, highlighting its potential for a turnaround despite some weaknesses in earnings.
Cathie Wood of Ark Invest seized an opportunity amidst the market turbulence, snapping up shares of biotech stock Ginkgo Bioworks (DNA) for the ARK Innovation (ARKK) and ARK Genomic Revolution ETFs (ARKG). While Ginkgo Bioworks faced a decline, Cathie Wood’s strategic move showcased her willingness to capitalize on opportunities amidst market volatility. This move contrasted with the decision to sell shares of Coinbase Global (COIN) on Friday, a decision that proved costly as the stock surged 11% on Monday.
Magnificent 7 stocks
In the tech sector, Nvidia (NVDA) emerged as a standout performer, gaining 3.6% and surpassing its recent entry point. UBS reiterated a buy rating on Nvidia stock, highlighting its leadership in artificial intelligence. However, other tech giants like Amazon.com (AMZN), Microsoft (MSFT), and Meta Platforms (META) faced losses, indicating mixed fortunes within the sector. Google-parent Alphabet (GOOGL) struggled, falling 2.8% amid criticism of its Gemini artificial intelligence system.
Super Micro Computer (SMCI) experienced a significant surge, rising almost 25%, following the announcement of its inclusion in the S&P 500 index. This marked a milestone for the company, reflecting its strong performance and market recognition. Similarly, Deckers Outdoor (DECK) witnessed a moderate increase in stock price, indicating positive momentum as it prepares to join the benchmark S&P 500 index.
The market also saw developments outside the Dow Jones, notably in the aviation sector.
JetBlue (JBLU) rallied 4.3% following the decision to call off its proposed merger with Spirit Airlines (SAVE). In contrast, Spirit stock plummeted 10.9% to a near-record low, reflecting concerns about potential losses and the risks associated with failed mergers.
Overall, while the market faced challenges on Monday, there were pockets of resilience and opportunity. Investors remained vigilant, eyeing potential entry points and strategic moves amidst market volatility.
