The Dow Jones Industrial Average fell Friday on warmer-than-expected inflation data ahead of the Federal Reserve’s rate policy meeting next week. Broadcom, Costco and Lululemon were earnings drivers ahead of Friday’s market open, while Netflix jumped on an analyst upgrade.
Wholesale inflation data was released on Friday, with the release of the Department of Labor’s Producer Price Index at 8:30 a.m. ET. Producer prices rose 0.3% in November, above the estimate of 0.2%. The PPI rose 7.4% year over year, warmer than the 7.2% estimate.
Shares of chipmaker Broadcom rebounded 3% after the the company reported profits and revenue that beat Wall Street targets for its fourth fiscal quarter. Costco has dropped 1% after missing revenue and sales estimates. LULU stock plunged more than 10% in morning trade after the beat of a clothing company quarterly expectations, but warned of higher stocks.
Streaming giant netflix (NFLX) rose more than 4% after Wells Fargo bumped the stock from equal weight to overweight with a price target of 400. The electric vehicle giant You’re here (TSLA) traded up 3% on Friday. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) were lower after today’s stock market open.
Allegro Microsystems (ALGM), IBD classification Stock Dexcom (DXCM), KLA (KLAC) and Trane Technology (TT) – as well as the Dow Jones names caterpillar (CAT), Chevrons and Home deposit (HD)—are among the best stocks to buy and watch.
Dexcom and Trane are IBD classification shares. Caterpillar and Home Depot were presented in this week Stocks Near Buy Zone column. Allegro was a recent IBD 50 Stocks to Watch. Caterpillar and Dexcom were recent IBD stock of the day companies.
Dow Jones Today: Oil Price, Treasury Yields
After Friday’s opening bell, the Dow Jones Industrial Average fell 0.1%, while the S&P 500 rose less than 0.1%. The tech-heavy Nasdaq composite lost 0.1% in morning action.
The 10-year Treasury yield rose to 3.52% on Friday morning. On Thursday, the 10-year Treasury yield rebounded to 3.49%, holding near its lowest level since September.
Meanwhile, US oil prices rebounded slightly again in early trading. Recent early rebounds have deteriorated to five straight losses, sending West Texas Intermediate futures to a fresh 2022 low below $72 a barrel on Thursday. WTI futures were holding just below $72 early Friday.
Stock market rally
The stock market rebounded on Thursday, as the Nasdaq composite and the S&P 500 broke prolonged losing streaks.
Chronicle The Big Picture of Thursday commented: “Amid this week’s choppy stock market, investors should maintain their cautious stance. For now, the Nasdaq is holding its 50-day line, but further weakness in the tech-intensive composite would send it into a tailspin. Below this benchmark, which is an important support level to watch, a violation of this level would likely result in more downside.
This is an important time to read IBD’s The Big Picture column amid ongoing stock market volatility.
Dow Jones stocks to buy and watch: Caterpillar, Home Depot, Chevron
Caterpillar, member of the Dow Jones, continues to move away from the 238 of a cutting basis point of purchase, according IBD Pattern Recognition MarketSmith, following Thursday’s 0.85% gain. CAT stock rose 0.2% on Friday.
Energy giant Chevron rebounded another 0.6% on Thursday, still squarely below a buy point of 182.50 in a consolidation basis. Stocks are trying to rebound from support at their 50-day line. CVX shares lost 1.2% on Friday morning as oil prices appeared to rebound amid this week’s decline.
Home improvement retailer The Home Depot ended around 2% below the buy point of 329.77 on a base cup with handle on Thursday. HD stock traded down 0.6% on Friday.
Top stocks to buy and watch: Allegro, Dexcom, KLA, Trane
Allegro MicroSystems ended Thursday in the buy range past the 32.07 one-cup buy point with a handle after the day’s 2.5% rally. ALGM stock traded down 0.5% on Friday.
IBD classification Dexcom stock is trying to break above a buy point of 123.46 in a flat basis and is sitting just below entry. Dexcom stock was down 1.2% early Friday.
Chip leader KLA ended Thursday in a buy range above a buy point of 392.60, according to IBD MarketSmith Chart Analysis. A key technical strength is the stock’s strong RS line, which hit a new high in Thursday’s action. KLA stock was down 1.4% on Friday.
Trane Technologies ended Thursday around 2% below a buy point of 181.72 in a cup with a handle after the session’s 1% rise. Shares were unchanged Friday morning.
Tesla Stock fell 0.3% on Thursday, extending a losing streak to four sessions. Stocks are on course to drop 11% for the week.
Despite the losses, the stock remains above its 52-week low, set in mid-November. The shares are around 57% off their 52-week high. Meanwhile, the stock appears to be experiencing some resistance around the 200 price level, which is a key area to watch if the stock is able to mount another rally attempt. For now, it looks like the stock could be heading for a test of its 2022 low.
Shares rose 3% on Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares rose 1.2% on Thursday, ending a four-day losing streak and rebounding from recent lows. The stock is about 22% off its 52-week high. Apple stock traded 1.1% on Friday.
Microsoft rose 1.2% on Thursday as shares continue to hold support at the 50-day line. The software giant remains around 30% off its 52-week high. Microsoft shares fell 1.15% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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