Dow Jones Adds 250 Points As Critical Q1 Earnings Loom; Tesla, AI Stock Break Out

The Dow Jones Industrial Average added 415 points to end the first quarter on a high note Friday. The blue chip index rose 1.26% and is above 2022 year-end levels after a tumultuous first quarter. Intel (INTC) rose for the fourth day in a row on news that its server chips will be in the market earlier than expected.

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More impressive was Dow Jones component Cisco Systems (CSCO), which broke out of a flat base. Volume was about average, however. Shares are in buy range from the 51.84 buy point.

First-quarter earnings loom as the quarter wraps up. Corporate performance for the difficult first three months of 2023 — which saw increasing interest rates, a bank crisis that nearly led to contagion and moderating inflation — is on watch.

The S&P 500 added 1.4% and locked in a 7% gain for the quarter. Tesla (TLSA) added to the index’s gain, as the stock broke out of a cup-with-handle base. The stock remains in buy range from its 200.76 buy point.

Several high-rated stocks broke out of bases. PGT Innovations (PGTI), PagerDuty (PD), Monster Energy (MNST), Tenable Holdings (TENB), Stryker (SYK), Analog Devices (ADI), Texas Instruments (TXN) and Graco (GGG) climbe above buy points. But volume was light for most.

Nasdaq Leads Stock Market

The Nasdaq gained 1.7% at closing bell Friday. The tech-heavy index has gained 20% from its Oct. 13 lows —a gain that many consider to be a bull market. IBD does not follow that convention, but Wednesday’s follow-through confirmed a rally attempt and gave investors a signal to increase exposure.

Software stocks gained the most. CrowdStrike (CRWD), Datadog (DDOG) and Zscaler (ZS) rose sharply.

Brazilian e-commerce play and Leaderboard stock MercadoLibre (MELI) rose to new highs after a more growth-friendly Brazilian budget came out Thursday.

Small-cap Russell 2000 rose 1.5%. The Innovator IBD 50 ETF (FFTY) outperformed with a 1.9% gain.

Volume on the NYSE was lighter and heavier on the Nasdaq compared to the same time on Thursday.

Crude oil rose over 1% to trade at $75.40 a barrel. The yield on the 10-year Treasury note fell 5 basis points to 3.50%.

Stocks Moving Today Outside Dow Jones

Software leaders surged on Friday. Atlassian (TEAM) cleared its 50-day line and is in a base with a buy point of 188.67. PagerDuty, which is on IBD Leaderboard, broke out of a large cup with handle. It is in buy range from its 33.87 buy point.

C3.ai (AI) broke out of an irregular base in strong volume, topping the 31.02 buy point in heavy trading. Shares are on a three-day winning streak.

Tesla CEO Elon Musk and Apple (AAPL) co-founder Steve Wozniak issued a letter Thursday asking all artificial intelligence labs to pause training AI systems. The executives warned that “contemporary AI systems are now becoming human-competitive at general tasks.” Several other tech leaders at OpenAI, Google parent Alphabet (GOOGL) and its subsidiary, DeepMind, joined in signing the letter.

Virgin Orbit (VORB) is shutting down its commercial space operations due to lack of funding. The SpaceX rival’s first rocket launch in January was cancelled due to a mechanical failure. Jeff Bezos’ Blue Origin is yet another player as the commercial space race heats up. Virgin Orbit plummeted 41%, further cementing its status as a penny stock.

Market Rally Builds Momentum; Tesla Breaks Out With Deliveries Due

Economic Data

The personal consumption and expenditure index showed inflation cooling slightly. Prices rose 0.3% in Feb, with goods falling much more than services. For the year, the index showed a 5% rise, lower than January’s 5.3%. LPL Financial Chief Economist Jeffrey Roach sees inflation falling to 4% at the end of the year.

As markets show signs of looking past the banking crisis, the chance of a 25 basis point hike in May stands at 51.2% according to the CME FedWatch.

First-quarter earnings loom. Delta Air Lines (DAL), JPMorgan Chase (JPM), Wells Fargo (WFC) and Dow Jones component UnitedHealth Group (UNH) are due mid-April along with beleaguered First Republic Bank (FRC).

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

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