Dow Jones futures extended losses, falling more than 375 points in premarket trading on Friday after a hotter-than-expected inflation report. Meanwhile Square parent block (SQ) rose 7% even after fourth-quarter results missed estimates, while revenue and gross profit beat Wall Street targets.
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The Commerce Department released its personal consumption spending index early Friday. It showed that the PCE price index rose 0.6% in January, or an annual rate of 5.4%. That was hotter than estimates calling for a 0.4% monthly increase and a 4.9% annual rate.
The core PCE price index rose 0.6% for the month, at a 4.7% annual rate, which is higher than Wall Street estimates for a 0.4% monthly increase and a 4% annual increase, 3% Personal income rose a less-than-expected 0.6% versus the 1% estimate. Consumer spending rose 1.8% in January, beating estimates by 1.2%.
Meanwhile, at 10:00 am, fresh home sales and consumer sentiment data will cap Friday’s economic data
Among other companies reporting earnings, Autodesk (ADSK), Ticketing (BKNG), Carvana (CVNA), EOG resources (EOG) and MercadoLibre (MELI) were on their way.
Autodesk beat Wall Street’s targets for the fiscal fourth quarter, but disappointed with its earnings outlook for the current quarter and for the year ahead. ADSK stock fell more than 4% premarket.
Bookings fell less than 1% in premarket trading, while Carvana trimmed a 6% decline to less than 2%. EOG Resources fell 4%. And IBD leaderboard stock MercadoLibre rose 5.6% on better-than-expected fourth-quarter results.
stock market today
Electric vehicle leader Tesla slipped nearly 3% on Friday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) moved lower ahead of the market open.
IBD Leaderboard Stock Airbnb (ABNB), deer (DE), Medical systems inspire (INSP) and wing stop (WING) – as well as Dow Jones stocks Cisco systems (CSCO) and JPMorgan Chase (JPM) – are among the top stocks to watch given the recent stock market weakness.
Airbnb is an IBD Leaderboard stock. Inspire and Deere were the most recent IBD Stock Of The Day picks. Cisco Systems and Wingstop were featured in this week’s ‘Stocks Near a Buy Zone’ column.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Friday’s market open, Dow Jones futures fell 1.1% from fair value, while S&P 500 futures fell 1.3%. Tech-heavy Nasdaq 100 futures lost 1.8% in morning action.
Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 1.3% early Friday and the SPDR S&P 500 ETF (SPY) was down 1.1%.
The 10-year US Treasury yield fell to 3.87% on Thursday, falling for the second straight day. But the 10-year yield rose to 3.93% on Friday morning — on course for a fifth straight weekly rise — following the inflation report.
Oil prices appeared to hold Thursday’s recovery, with West Texas Intermediate futures up almost 1% on Friday morning. WTI was trading around $76 a barrel.
Fight for the stock market rally
On Thursday, the Dow Jones Industrial Average was up 0.3% and the S&P 500 was up 0.5%. The Nasdaq led the way, up 0.7%.
Thursday’s Big Picture column said: “As more and more breakouts begin to fade and your portfolio’s progress slows, you should be proactive and reduce your exposure even further to adjust with the market movement. Look out for sell signals like breakouts of the 50-day moving average and 7%-8% sell signals to avoid bigger losses.”
Five Dow Jones stocks to buy and watch
Dow Jones Stocks To Buy And Watch: Cisco, JPMorgan
Banking giant JPMorgan reclaimed its flat buy point of 138.76 during Thursday’s 0.8% gain, according to IBD MarketSmith chart analysis. Stocks are also recovering from their key 50-day moving average. JPM shares were trading 0.5% lower early Friday.
JPM stocks are showing a solid 94 out of 99 perfect IBD Composite Ratings, according to the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Cisco Systems, featured in this week’s ‘Stocks near a buy zone’ column, is attempting to break out of a flat base with a buy point of 50.81. But the breakout continued to stutter on Thursday, with shares falling another 0.2%. Cisco shares lost 0.1% early Friday.
4 top growth stocks to buy and watch stock market rally
Top stocks to buy and watch: Airbnb, Inspire
Airbnb’s IBD Leaderboard stock surged last week, rising above a mug handle buy point of 121.50. After four consecutive losses, the stock is falling back into the 5% buy range, which extends to 127.58. However, investors should wait for support before considering buying shares. Meanwhile, the Breakaway Gap placed an alternative entry at 135. ABNB shares were down 1.2% on Friday morning.
Backstory: The company operates an online marketplace for accommodation. The main offer is host families for vacation rentals. While tourism has been hit hard by the coronavirus pandemic, it continues to roar back following strict lockdowns.
IBD’s youngest stock of the day, Inspire Medical Systems, went on a four-day losing streak on Thursday, rising 0.5%. The medical leader remains above the buy point of its flat base of 262.64 according to pattern recognition by IBD MarketSmith. The buy zone is at 275.77. INSP stock carries a modest IBD Composite Rating of 86. INSP stock was inactive early Friday.
Backstory: The company sells an implantable device that treats sleep apnea by electrically stimulating nerves — a process called neurostimulation.
Deere, Wingstop Eye Latest Buying Points
Shares of Deere fell 0.3% on Thursday, still testing support around its 50-day moving average. Shares are only 5% away from a buy point of 448.50 on a flat basis. DE shares fell a fraction on Friday morning.
Backstory: As an industrial pioneer, Deere has shrugged off recession and inflation fears to deliver solid profits. Last year, higher commodity prices made farmers buy both new and upgraded machines. In the fiscal first quarter ended Jan. 29, the tractor maker reported a 124% increase in earnings per share on a 32.2% increase in total sales, beating both estimates. Earnings growth accelerated for the second straight quarter.
Wingstop is back in the 5% pursuit zone behind a 169.04 cup with handle entry that peaks at 177.49 after Thursday’s 2.7% decline. WING stock lost 1.8% early Friday.
Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the US and international markets, according to Dow Jones Newswires. International locations include Mexico, Colombia, Panama, Singapore and the UK. Wingstop added 61 new locations in the fourth quarter, bringing Wingstop’s total presence to 1,959 restaurants worldwide.
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Stocks to buy and watch in the stock market rally
These are six top stocks to buy and watch in today’s stock market, including two top Dow Jones stocks.
| Company Name | symbol | Correct purchase point | Type of purchase point |
|---|---|---|---|
| Medical systems inspire | (INSP) | 262.64 | flat base |
| Visteon | (UK) | 152.20 | cup base |
| Cisco systems | (CSCO) | 50.81 | flat base |
| Airbnb | (ABNB) | 135.00 | Breakaway gap |
| JP Morgan | (JPM) | 138.76 | flat base |
| wing stop | (WING) | 169.04 | Cup with handle |
Source: IBD data as of February 24, 2023
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Tesla stock
Tesla shares rose 0.6% on Thursday, climbing for a second day. Despite their strong rebound since January 6th, stocks are still below the 200-day moving average and this key level is looming as a potential area of resistance. Shares closed about 48% below their 52-week high on Thursday.
Shares threatened to give up Thursday’s gains, falling 2.8% premarket on Friday.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.3% on Thursday, still trying to find crucial support at its 200-day moving average. Shares are about 17% off their 52-week high. Apple shares fell 0.9% on Friday.
Microsoft shares ended a five-day dry spell, rising 1.3% on Thursday. Shares have regained their 200-day moving average, but are still about 20% off their 52-week high after recent losses. MSFT shares fell 0.8% on Friday morning.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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