The Dow Jones Industrial Average opened lower and quickly turned higher Friday as key inflation data pointed to possible interest rate cuts in coming months. But the Dow was weighed down by a weak outlook from blue chip component Intel. Meanwhile, famed investor Cathie Wood loaded up on Tesla stock during the electric-vehicle giant's earnings plunge.
The Commerce Department's personal income and outlays report showed personal income rose 0.3% in December, matching Wall Street's estimates. Further, the Personal Consumption Expenditures, or the PCE, price index rose 0.2% on the month, also meeting estimates.
What was critical, though is that the PCE showed a 2.6% annual increase, slightly cooler than the 2.7% forecast from economists. The Core PCE price index climbed 0.2% in December, in line with Econoday views, with a 2.9% annual rise, just below the 3% estimate.
After the opening bell, the Dow Jones Industrial Average rose 0.2%, while the S&P 500 gained 0.1%. The tech-heavy Nasdaq composite dropped 0.1% in early action.
Cathie Wood Makes A Tesla Buy
Among U.S. exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 0.4%, while the SPDR S&P 500 ETF edged higher.
The 10-year Treasury yield ticked higher to just below 4.15% Friday. Further, oil prices paused after Thursday's gains, as West Texas Intermediate futures dropped 0.5%. WTI futures traded around $77 a barrel.
On Thursday, Cathie Wood purchased nearly 178,000 shares of Tesla stock for the Ark Invest funds, worth $32.48 million as of Thursday's close. Tesla stock plunged more than 12% Thursday, closing at their lowest level since May 2023. The stock is sharply below its 50- and 200-day lines.
Tesla shares climbed 0.7% Friday morning.
Intel Sinks On Earnings
Intel plunged more than 11% after the chip giant beat Wall Street's targets for the fourth quarter but badly missed estimates with its forecast.
Visa tumbled 1.4% despite better-than-expected earnings results. Meanwhile, American Express surged nearly 8% in morning trade.
Other key earnings movers Friday morning include KLA, T-Mobile US, Western Digital
KLA sold off 3% in early action, while T-Mobile shares dropped more than 1%. And Western Digital declined more than 3.5% in early trading.
Dow Jones Rallies
On Thursday, the Dow Jones Industrial Average rose 0.6%, while the S&P 500 moved up 0.5%. The tech-heavy Nasdaq composite climbed 0.2%.
Thursday's Big Picture column commented, "The Nasdaq is getting extended from its 50-day moving average, more than 5% above that key benchmark. Meanwhile, the Nasdaq continues to rise in declining volume, a sign that institutions are reluctant to commit heavy resources at this level. The S&P 500 is carrying a high number of distribution days, with seven."
Now is an important time to read IBD's The Big Picture column amid the continuing stock market rally. Be sure to read how to adjust to changing market conditions, with IBD's new exposure levels.
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Best Stocks To Buy And Watch
DraftKings, MercadoLibre, Novo Nordisk, Snowflake and Spotify — plus Dow Jones components Amgen and Merck — are among the best stocks to buy and watch in the current market rally.
MercadoLibre and Spotify were featured in this Stocks Near A Buy Zone column.
Get Real-time Buy And Sell Alerts On Stock Market Leaders With IBD Leaderboard
Dow Jones: Merck Breaks Out
Biotech leader Amgen fell 1.4% Thursday, easing from recent highs. Shares remain out of the 5% buy range past a 288.46 official buy point in a flat base. The 5% buy area went up to 302.88. Amgen stock was up 0.1% early Friday.
Drug maker Merck is trying to break out past a cup base's 119.65 buy point, according to IBD MarketSmith pattern recognition. Shares finished back below their entry amid a 0.8% drop Thursday. Merck stock was up 0.1% Friday.
4 Top Growth Stocks To Watch In The Stock Market Rally
DraftKings Breaks Out
IBD Leaderboard watch list stock DraftKings extended a win streak to seven sessions Thursday, rising another 0.6%. Shares briefly broke out past their double-bottom base's official buy point at 38.97. The stock was down 0.3% Friday.
MercadoLibre fell back into buy range past a flat base's 1,660 buy point, as shares declined 1.4% Thursday. MercadoLibre stock gained 0.1% early Friday.
Weight-loss drug maker Novo Nordisk ended Thursday up 0.45%, just below its 105.69 flat-base buy point. Shares added 0.9% Friday morning.
Software leader Snowflake is breaking out past a 202.83 buy point in a flat base, with a 1.1% rise Thursday, according to IBD MarketSmith. Snowflake stock fell 1.8% Friday.
IBD SwingTrader stock Spotify closed Thursday out of buy range past a 202.88 buy trigger in a flat base, with a 1.4% rise. Shares were down 0.5% Friday morning.
Best Bets In Today's Action
These are four best stocks to watch in today's stock market, including a Dow Jones leader.
| Company Name | Symbol | Correct Buy Point | Type Of Buy Point |
|---|---|---|---|
| Novo Nordisk | 105.69 | Flat base | |
| Merck | 119.65 | Cup base | |
| DraftKings | 39.35 | Cup base | |
| Spotify | 202.88 | Flat base |
Source: IBD Data As Of Jan. 25, 2024
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Magnificent Seven Stocks: Nvidia
Magnificent Seven stock Nvidia was down 0.3% in morning action Friday.
Nvidia moved up 2.5% Thursday, more than 20% past a a 505.48 buy point in a flat base after a Jan. 8 breakout move.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks in the Magnificent Seven, Apple and Microsoft traded mixed after Friday's stock market open.
Apple stock fell 0.2% Thursday, holding above its 50-day line. Shares are just 3% away from their flat base's 199.62 buy point. Shares rose 0.2% early Friday.
Microsoft stock moved up 0.6% Thursday, and is now extended past a flat base's 384.30 buy point. The software giant dropped 0.1% Friday morning.
Be sure to follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
