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Dow Jones futures reversed lower Friday on hotter-than-expected inflation data ahead of the Federal Reserve’s rate policy meeting next week. Broadcom, Costco and Lululemon were earnings movers ahead of Friday’s market open, while Netflix jumped on an analyst upgrade.
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Wholesale inflation data came out Friday, with the release of the Labor Department’s Producer Price Index at 8:30 a.m. ET. Producer prices rose 0.3% in November, higher than the 0.2% estimate. The PPI rose 7.4% year over year, hotter than the 7.2% estimate.
Broadcom (AVGO), Costco Wholesale (COST) and Lululemon (LULU) reported their quarterly earnings results Thursday afternoon.
Chipmaker Broadcom’s shares rallied 3% after the company reported earnings and revenue that topped Wall Street’s targets for its fiscal fourth quarter. Costco dropped 1% after missing earnings and sales estimates. LULU stock plunged more than 7% in early morning trade after the apparel company beat quarterly expectations, but warned of higher inventories.
Streaming giant Netflix (NFLX) rallied more than 2% after Wells Fargo upgraded the stock from equal-weight to overweight with a price target of 400. EV giant Tesla (TSLA) traded a fraction higher Friday. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were up and down ahead of today’s stock market open.
Allegro Microsystems (ALGM), IBD Leaderboard stock Dexcom (DXCM), KLA (KLAC) and Trane Technologies (TT) — as well as Dow Jones names Caterpillar (CAT), Chevron and Home Depot (HD)— are among the top stocks to buy and watch.
Dexcom and Trane are IBD Leaderboard stocks. Caterpillar and Home Depot were featured in this week’s Stocks Near A Buy Zone column. Allegro was a recent IBD 50 Stocks To Watch pick. Caterpillar and Dexcom were recent IBD Stock Of The Day companies.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Friday’s opening bell, Dow Jones futures dropped 0.3% vs. fair value. S&P 500 futures lost 0.35%, and tech-heavy Nasdaq 100 futures moved down 0.4% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.7% and the SPDR S&P 500 ETF (SPY) lost 0.6% early Friday.
The 10-year Treasury yield ticked higher to 3.52% Friday morning. On Thursday, the 10-year Treasury yield bounced to 3.49%, holding near its lowest level since September.
Meanwhile, U.S. oil prices rebounded modestly again in early trade. Recent early rebounds have deteriorated into five straight losses, sending West Texas Intermediate futures to a new 2022 low below $72 a barrel on Thursday. WTI futures held just below $72 early Friday.
Stock Market Rally
The stock market rebounded Thursday, as the Nasdaq composite and S&P 500 snapped extended losing streaks.
Thursday’s The Big Picture column commented, “Amid this week’s wobbly stock market, investors should maintain their cautious stance. For now, the Nasdaq is holding its 50-day line, but further weakness on the tech-heavy composite would send it below that benchmark, which is an important support level to monitor. A breach of that level would likely lead to more downside.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Caterpillar, Home Depot, Chevron
Dow Jones member Caterpillar continues to drift further away from a cup base’s 238 buy point, according to IBD MarketSmith pattern recognition, in the wake of Thursday’s 0.85% gain. CAT stock rose 0.4% Friday.
CAT stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.
Energy giant Chevron rebounded another 0.6% Thursday, still squarely below a 182.50 buy point in a consolidation base. Shares are trying to bounce from support at their 50-day line. CVX shares edged higher Friday morning, as oil prices looked to bounce amid this week’s drop.
Home improvement retailer Home Depot ended Thursday about 2% below a cup-with-handle base’s 329.77 buy point. HD stock traded up 0.3% Friday.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Buy And Watch: Allegro, Dexcom, KLA, Trane
Allegro MicroSystems ended Thursday in buy range past a cup-with-handle’s 32.07 buy point following the day’s 2.5% rally. ALGM stock traded unchanged Friday.
IBD Leaderboard stock Dexcom is trying to break out past a 123.46 buy point in a a flat base and is just below the entry. Dexcom stock was up 0.5% early Friday.
Chip leader KLA finished Thursday in buy range above a 392.60 buy point, according to IBD MarketSmith chart analysis. A key technical strength is the stock’s strong RS line, which hit another new high during Thursday’s action. KLA stock was unchanged Friday.
Trane Technologies ended Thursday about 2% below a 181.72 buy point in a cup with handle after the session’s 1% climb. Shares were inactive Friday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock moved down 0.3% Thursday, extending a losing streak to four sessions. Shares are on pace to fall 11% for the week.
Despite the losses, the stock is holding above its 52-week low price, set in mid-November. Shares are about 57% off their 52-week high. Meanwhile, the stock appears to be seeing 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 appears the stock could be heading for a test of its 2022 low.
Shares moved up 0.5% Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares moved up 1.2% Thursday, snapping a four-day losing streak and bouncing back from recent lows. The stock is about 22% off its 52-week high. Apple stock traded down a fraction Friday.
Microsoft moved up 1.2% 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 lost 0.7% early Friday.
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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