The Dow Jones futures Industrial Average dived 500 points Friday on a hotter-than-expected inflation report. Meanwhile, Square-parent Block (SQ) jumped 2%, even after reporting fourth-quarter earnings that missed estimates while revenue and gross profit edged past Wall Street targets. And Tesla stock skidded below 200 a share.
The Commerce Department released the personal consumption expenditures price index early Friday. It showed the PCE price index rose 0.6% in January, or an annual rate of 5.4%. That was hotter than estimates that called for a 0.4% monthly rise and 4.9% annual rate.
The core PCE price index rose 0.6% on the month, with a 4.7% annual rate, higher than Wall Street’s estimates for a 0.4% monthly rise and 4.3% annual increase. Personal income rose less than expected, at 0.6% vs. the 1% estimate. Consumption expenditures were up 1.8% in January, above estimates at 1.2%.
Meanwhile, new home sales and consumer sentiment data wrap up Friday’s economic data at 10 a.m.
Autodesk beat Wall Street’s targets for its fiscal fourth quarter but disappointed with its earnings outlook for the current quarter and full year ahead. ADSK stock plunged more than 9% in morning action.
Booking rose more than 2% in early trade, while Carvana crumbled 17%. EOG Resources dropped 5.4%. And IBD Leaderboard stock MercadoLibre rose less than 1% on better-than-expected fourth-quarter results.
Stock Market Today
IBD Leaderboard stock Airbnb (ABNB), Deere (DE), Inspire Medical Systems (INSP) and Wingstop (WING) — as well as Dow Jones stocks Cisco Systems (CSCO) and JPMorgan Chase (JPM) — are among the top stocks to watch, with the recent stock market weakness.
Dow Jones Today: Oil Prices, Treasury Yields
After Friday’s market open, the Dow Jones Industrial Average fell 1.5%, and the S&P 500 dropped 1.7%. The tech-heavy Nasdaq composite lost 2.1% in morning action.
The 10-year U.S. Treasury yield ticked lower to 3.87% Thursday, falling for a second-straight session. But the 10-year yield moved higher to 3.94% Friday morning — on track for a fifth-straight weekly advance — after the hot inflation report.
Oil prices looked to sustain Thursday’s rebound, but West Texas Intermediate futures turned lower to fall 1% Friday morning. WTI traded around $75 a barrel.
Stock Market Rally Struggles
On Thursday, the Dow Jones Industrial Average crept 0.3% higher, and the S&P 500 gained 0.5%. The Nasdaq led the way, advancing 0.7%.
Thursday’s Big Picture column commented, “If more and more breakouts start to fade and your portfolio’s progress wanes, then you should be proactive and reduce your exposure even further to match the market action. Keep a close eye out for sell signals, like breaks of the 50-day line and 7%-8% sell signals, to avoid bigger losses.”
Dow Jones Stocks To Buy And Watch: Cisco, JPMorgan
Banking giant JPMorgan reclaimed its 138.76 flat-base buy point during Thursday’s 0.8% gain Thursday, according to IBD MarketSmith chart analysis. Shares are also rebounding from their key 50-day line. JPM shares traded down 0.1% early Friday.
Featured in this week’s Stocks Near A Buy Zone column, Cisco Systems is trying to break out past a flat base with a 50.81 buy point. But the breakout continued to sputter Thursday, with shares down another 0.2%. Cisco stock lost 1.4% early Friday.
Top Stocks To Buy And Watch: Airbnb, Inspire
IBD Leaderboard stock Airbnb soared last week, surging past a 121.50 buy point out of a cup with handle. After four straight losses, the stock is falling back into the 5% buy range that goes up to 127.58. But investors should wait for support before considering a purchase of shares. Meanwhile, the breakaway gap placed an alternative entry at 135. ABNB stock fell 2.4% Friday morning.
Backstory: The firm operates an online marketplace for lodging. Its primary offerings are homestays for vacation rentals. While tourism was badly hit by the coronavirus pandemic, it continues to roar back following strict lockdowns.
Recent IBD Stock Of The Day Inspire Medical Systems snapped a four-day losing streak Thursday, rising 0.5%. The medical leader continues to above its flat base’s 262.64 buy point, according to IBD MarketSmith pattern recognition. The buy zone tops out at 275.77. INSP stock shows a modest 86 IBD Composite Rating. INSP stock was down 1.7% early Friday.
Backstory: The company sells an implantable device to treat sleep apnea through electrical stimulation of the nerves — a process called neurostimulation.
Deere, Wingstop Eye Latest Buy Points
Deere shares declined 0.3% Thursday, still testing support around their 50-day line. Shares are just 5% away from a 448.50 buy point in a flat base. DE stock moved down a fraction Friday morning.
Backstory: An industrial bellwether, Deere has shrugged off recession and inflation fears to deliver solid profits. In the last year, higher commodity prices let farmers buy both new and upgraded machines. In the fiscal first quarter ended Jan. 29, the tractor maker posted a 124% jump in per-share earnings on a 32.2% total revenue surge, both topping estimates. Earnings growth accelerated for a second-straight quarter.
Wingstop is back in the 5% chase zone past a 169.04 cup-with-handle entry that tops out at 177.49 after Thursday’s 2.7% drop. WING stock lost 0.7% early Friday.
Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the U.K. Wingstop added 61 new locations in the fourth quarter, bringing Wingstop’s total footprint to 1,959 restaurants worldwide.
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Stocks To Buy And Watch In Stock Market Rally
These are six top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|Inspire Medical Systems||(INSP)||262.64||Flat base|
|Cisco Systems||(CSCO)||50.81||Flat base|
|Wingstop||(WING)||169.04||Cup with handle|
Source: IBD Data As Of Feb. 24, 2023
Tesla stock rose 0.6% Thursday, climbing for a second day. Despite their strong rebound since Jan. 6, shares are still below the 200-day line and that key level looms as a potential resistance area. Shares closed Thursday around 48% off their 52-week high.
Shares threatened to give up Thursday’s gains, falling 4.1% in morning action Friday.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.3% Thursday, still trying to find decisive support at their 200-day line. Shares are around 17% off their 52-week high. Apple stock fell 2.2% Friday.
Microsoft shares ended a five-day losing streak, rising 1.3% Thursday. Shares regained their 200-day line, but are still about 20% off their 52-week high after recent losses. MSFT stock was down 2.1% Friday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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