Dow Jones Gains Fade; Tesla Stock Dips As Elon Musk Gets Away With This; AMC Stock Halted

The Dow Jones Industrial Average saw its gains fade in an evenly-poised session on the stock market today. Tesla (TSLA) stock sank lower even as CEO Elon Musk was cleared for allegedly violating a court-ordered policy over his Twitter (TWTR) activity. Meme stock AMC Entertainment (AMC) was halted amid more volatile trading.

Chevron (CVX) was once again among the top blue chips, with Visa (V) another standout performer. A couple of stocks attempted breakouts in the challenging session, with Dropbox (DBX) and bunion therapy specialist Treace Medical Concepts (TMCI) passing buy points.


Nasdaq, S&P 500 Gain

The Nasdaq closed up just 0.1%, even though technology stocks were among the better performers Wednesday. Covid-19 vaccine play Moderna (MRNA) fared best with a gain of more than 3%. Seagen (SGEN) was the biggest laggard, dipping more than 4%.

The S&P 500 fared slightly better, rising 0.2%. Schlumberger (SLB) led with a gain of almost 8% as oil stocks continued to fare well.

The S&P sectors were mixed, with energy posting the biggest gains for the second day in a row. Technology was another bright spot, while materials stocks lagged.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34600.97 +25.66 +0.07
S&P 500 (0S&P5) 4208.17 +6.13 +0.15
Nasdaq (0NDQC ) 13756.33 +19.85 +0.14
Russell 2000 (IWM) 228.36 +0.30 +0.13
IBD 50 (FFTY) 45.58 -0.11 -0.24
Last Update: 4:06 PM ET 6/2/2021

Small caps also struggled to make any headway, with the Russell 2000 closing up 0.1%. Growth stocks fared worse, with the Innovator IBD 50 ETF (FFTY) posting a mild loss of 0.2%.

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Chevron Stock Helps Dow Jones

The Dow Jones Industrial Average also posted a mild gain, rising less than 0.1%.

Chevron was the top performer, turning in a gain of 1.4%. The move allowed CVX stock to pull further clear of its 50-day moving average.

Energy stocks have been rallying after oil prices hit a two-year high, even with the OPEC+ countries agreeing Tuesday to increase oil production.

Payments stock Visa also fared well, rising 1.3%. It is currently in a buy zone after passing a flat base buy point of 228.33, MarketSmith analysis shows.

Tesla Stock Reverses Amid Elon Musk Tweet Storm

Tesla stock dipped Wednesday amid revelations CEO Elon Musk appears to have been let off the hook by the Securities and Exchange Commission over contentious tweets.

Records show the SEC told Tesla last year that Musk twice violated a court-ordered policy requiring his tweets to be vetted by company lawyers, according to a Wall Street Journal report.

In 2018, the SEC said Musk committed fraud when he tweeted about a potential buyout of Tesla. Musk and Tesla each paid $20 million to settle the case and agreed to have his social media posts monitored by Tesla lawyers. 

But the SEC said Musk tweets in 2019 and 2020 about Tesla’s solar roof production volumes and its stock price had not gone through the preapproval protocol. Tesla disputed the SEC’s claims, and the SEC never went back to court to ask a judge to intervene.

Nevertheless, Tesla stock reversed amid the news, falling around 3%. It is now looking for support at the 200-day moving average.

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Tesla stock is down more than 14% so far this year. It is also around 33% off its all-time high of 900.40, which it reached in January.

It also emerged that Tesla will recall close to 6,000 Model 3 and Model Y cars in the U.S. because brake caliper bolts could be loose and could reduce tire pressure, Reuters reported, citing a filing with the National Highway Traffic Safety Administration.

AMC Stock Halted

AMC stock was halted several times Wednesday as prices surged amid a trading frenzy.

The so-called meme stock was up more than 100% at one point, and closed up around 95%. This follows Tuesday’s 23% surge. It comes on the back of AMC stock gaining 116% last week amid social media buzz.

More than 700 million shares had been exchanged by the close, which is enormous volume. The stock is up more than 2,900% so far in 2021.

AMC on Wednesday launched Investor Connective. The “proactive communication initiative” will allow the company to directly communicate with a “base of enthusiastic and passionate shareholders” and provide them with special offers.

A day earlier, AMC raised $230.5 million from a stock sale to Mudrick Capital, though the latter firm has reportedly already sold off the stake. AMC said the proceeds would go in part toward acquiring new theater leases, investments in existing theaters and paying down debt.

AMC it is one of the stocks partaking in a so-called meme stocks rally.

The exact identities of the traders pushing prices higher are not clear. But the Reddit board WallStreetBets has largely been credited with launching an effort to upend short sellers who had bet those stocks would fall.

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AMC, Meme Stocks Rule The Day, But Here’s A Winning Strategy

These Stocks Pass Buy Points

Dropbox broke out of a consolidation pattern of 28.43. However it closed below its buy point as the breakout lost momentum.

The data storage stock has a strong IBD Composite Rating of 89, with earnings outstripping stock market performance.

Treace Medical Concepts is in a buy zone after passing an IPO base buy point of 34.57. The stock is seeing its relative strength line spike. However bear in mind that IPO stocks are volatile.

It is already well clear of its offering price of 17, although the firm has yet to post a profit.

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