The Dow Jones futures Industrial Average plunged 500 points Friday on a warmer-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 missed Wall Street targets. And the Tesla share slipped below 200 per share.
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The Ministry of Trade published the price index for personal consumption expenditure early Friday. It showed that the PCE price index rose 0.6% in January, or an annual rate of 5.4%. That was warmer than estimates that called for a monthly increase of 0.4% and an annual rate of 4.9%.
The core PCE price index rose 0.6% in the month, at an annual rate of 4.7%, beating Wall Street’s estimates for a 0.4% monthly increase and 4.3% annual increase. Personal income increased less than expected, by 0.6% against the estimate of 1%. Consumer spending rose by 1.8% in January, above estimates of 1.2%.
Meanwhile, data on new home sales and consumer sentiment close out Friday’s economic data at 10:00 AM
Among other companies reporting earnings, Autodesk (ADSK), Order (BKNG), Carvana (CVNA), EOG Resources (EOG) and MercadoLibre (MELI) was on the move.
Autodesk beat Wall Street’s estimates for the fourth quarter, but disappointed with its earnings outlook for the current quarter and the full year ahead. ADSK shares plunged more than 9% in morning action.
Booking rose more than 2% in early trading, while Carvana fell 17%. EOG Resources fell 5.4%. And IBD Leaderboard stock MercadoLibre rose less than 1% on better-than-expected fourth-quarter results.
The stock market today
Electric vehicle leader Tesla skidded more than 4% Friday morning. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) shifted lower after the stock market opened.
IBD Leaderboard stock Airbnb (ABNB), Deere (THE), Inspire medical systems (INSP) and Wing stop (WING) — as well as Dow Jones stocks Cisco Systems (CSCO) and JPMorgan Chase (JPM) — is among the best stocks to watch given the recent weakness in the stock market.
Airbnb is an IBD Leaderboard stock. Inspire and Deere were 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
After Friday’s open, the Dow Jones Industrial Average fell 1.5%, and the S&P 500 fell 1.7%. The technology-heavy Nasdaq composite lost 2.1% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) retreated 2% and the SPDR S&P 500 ETF ( SPY ) fell 1.6% early Friday.
The 10-year US Treasury yield ticked down to 3.87% on Thursday, falling for a second session in a row. But the 10-year yield rose to 3.94% on Friday morning – on track for a fifth straight weekly advance – following the warm inflation report.
Oil prices appeared to maintain Thursday’s gains, but West Texas Intermediate futures turned lower to fall 1% on Friday morning. WTI traded around $75 a barrel.
Stock market rally is struggling
On Thursday, the Dow Jones Industrial Average crept 0.3% higher, and the S&P 500 gained 0.5%. The Nasdaq led the way and rose 0.7 percent.
Thursday’s Big Picture column commented: “If more and more breakouts start to fade and your portfolio’s progress slows, you should be proactive and reduce your exposure further to match the market action. Keep an eye out for sell signals, such as breaks of the 50-day line and 7% -8% sell signals, to avoid bigger losses.”
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: Cisco, JPMorgan
Banking giant JPMorgan retook its 138.76 flat-base buy point during Thursday’s 0.8% gain on Thursday, according to IBD MarketSmith chart analysis. Shares are also on the way back from their key 50-day line. JPM shares were down 0.1% early Friday.
JPM stock scores a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Shown in this week’s Stocks Near a Buy Zone column, Cisco Systems is trying to break out past a flat base with a buy point at 50.81. But the breakout continued to sputter Thursday, with shares down another 0.2%. Cisco shares lost 1.4 percent early Friday.
4 top growth stocks to buy and watch Stock market rally
Top stocks to buy and watch: Airbnb, Inspire
IBD Leaderboard stock Airbnb soared last week, pushing past a 121.50 cup-with-handle buy point. After four losses in a row, the stock is falling back to the 5% buy area that goes up to 127.58. But investors should wait for support before considering a stock purchase. Meanwhile, the breakout gap placed an alternative entry at 135. ABNB stock fell 2.4% on Friday morning.
Background story: The company operates an online marketplace for accommodation. Its primary offering is vacation rental homestays. While tourism was hit hard by the coronavirus pandemic, it continues to roar back after 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 top 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 shares fell 1.7% early Friday.
Background story: The company sells an implantable device to treat sleep apnea through electrical stimulation of the nerves – a process called neurostimulation.
Deere, Wingstop Eye Last purchase point
Deere shares fell 0.3% Thursday, and are still testing support around the 50-day line. Shares are just 5% away from a buy point at 448.50 in a flat base. DE stock was down a fraction on Friday morning.
Background story: Deere, an industry bellwether, has pulled away from recession and inflation fears to deliver solid profits. In the past year, higher raw material prices have given farmers the opportunity to buy both new and upgraded machines. In the fiscal first quarter ended Jan. 29, the tractor maker posted a 124% jump in earnings per share on a 32.2% total revenue increase, both topping estimates. Earnings growth accelerated for the second consecutive 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 shares lost 0.7% early Friday.
Background story: The Dallas-based restaurant chain has more than 1,900 locations in the US and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the United Kingdom. Wingstop added 61 new locations in the fourth quarter, bringing Wingstop’s total footprint to 1,959 restaurants worldwide.
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Shares to buy and watch in a 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 | Right point of purchase | Type of point of purchase |
|---|---|---|---|
| Inspire medical systems | (INSP) | 262.64 | Flat base |
| Visteon | (VC) | 152.20 | Cup base |
| Cisco Systems | (CSCO) | 50,81 | Flat base |
| Airbnb | (ABNB) | 135.00 | Breakaway Gap |
| JPMorgan | (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 shares
Tesla shares rose 0.6% on Thursday, climbing for a second day. Despite their sharp decline since January 6, shares remain below the 200-day mark, and that key level looms as a potential resistance area. Shares closed Thursday about 48% off their 52-week high.
The shares threatened to give up Thursday’s gains, falling 4.1% in morning action on Friday.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple rose 0.3% on Thursday, still trying to find decisive support at its 200-day line. Shares are around 17% lower than their 52-week high. Apple shares fell 2.2 percent on Friday.
Microsoft shares ended a five-day losing streak, rising 1.3% on Thursday. Shares regained their 200-day line but remain about 20% off their 52-week high after recent losses. MSFT shares fell 2.1% on 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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