The Dow Jones Industrial Average dropped more than 200 points Friday morning, as the major stock indexes threatened to deepen Thursday's stock market plunge.
Early Friday, the manufacturing and services Purchasing Managers' Indexes are due out at 9:45 a.m. ET. The manufacturing PMI is expected to remain in a contraction at 47.8. Meanwhile, the services PMI also remains in contraction mode, with a 46.5 reading.
Adobe and Darden Restaurants were earnings movers Friday morning. Adobe stock rallied more than 5% in morning trade after the company topped Wall Street's earnings target. Revenue met views for its fiscal fourth quarter. The company's own outlook came in mixed, with current-quarter revenue forecasts slightly below expectations.
Darden shares dived more than 6% despite the company's better-than-expected results for its fiscal second quarter.
Stock Market Today
Meta Platforms jumped almost 4% after JPMorgan upgraded the social media giant from neutral to overweight, and raised its price target from 115 to 150. Electric-vehicle giant Tesla traded up 1.4% Friday morning, looking to bounce back from a fresh 52-week low.
Among the Dow Jones stocks, Nike dropped 1.2% even after seeing its price target upped at Credit Suisse. Dow Jones tech leaders Apple and Microsoft were mixed after today's stock market open.
Allegro MicroSystems, IBD Leaderboard stock Dexcom, KLA and United Rentals — as well as Dow Jones names Caterpillar, Home Depot and UnitedHealth Group — are among the top stocks to consider for investor watchlists.
Dexcom and Trane are IBD Leaderboard stocks. UnitedHealth was featured in this week's Stocks Near A Buy Zone column. Allegro was a recent IBD 50 Stocks To Watch pick. And Caterpillar, United Rentals and Dexcom were recent IBD Stock Of The Day companies.
Dow Jones Today: Oil Prices, Treasury Yields
After Friday's opening bell, the Dow Jones Industrial Average lost 0.7%, or more than 200 points, and the S&P 500 dropped 0.6%. The tech-heavy Nasdaq composite fell 0.2% in morning action, propped by gains from Adobe and Meta Platforms.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust dropped 0.2% and the SPDR S&P 500 ETF moved down 0.6% early Friday.
The 10-year U.S. Treasury yield ticked higher to 3.54% Friday morning, still set to end the week with moderate losses.
Meanwhile, U.S. oil prices traded down more than 3% Friday morning, leaning toward a second straight decline. West Texas Intermediate futures dipped below $74 a barrel Friday, but remained up nearly 5% for the week.
Stock Market Rally
On Thursday, the Dow Jones Industrial Average fell 2.2% and the S&P 500 declined 2.5%. While the S&P 500 remains above its 50-day line, Thursday's loss set it below its 21-day exponential moving average and to its lowest level since Nov. 10.
The Nasdaq plunged 3.2%, breaking below its 50-day line. The tech-heavy composite had held above that line since Nov. 10, and Thursday's breach was a bearish signal.
Thursday's The Big Picture column commented: "Amid this week's mounting losses, and the Nasdaq's breach of its 50-day line, IBD lowered its stock market outlook from 'confirmed uptrend' to an 'uptrend under pressure.' That means investors should be cutting back their already reduced exposure. It's clear that defense is the priority over buying breakouts in the current market."
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market volatility.
Dow Jones Stocks To Buy And Watch: Caterpillar, Home Depot, UnitedHealth
Dow Jones member Caterpillar continues to trade near a 239.95 buy point in a cup with handle, according to IBD MarketSmith pattern recognition, in the wake of Thursday's 1.6% fall. Shares ended Thursday sitting on the stock's 21-day exponential moving average. CAT stock dipped 0.3% Friday, indicating a possible break of support at the 21-day level.
Home improvement retailer Home Depot is back below a cup-with-handle base's 329.77 buy point following Tuesday's breakout move. HD stock traded down 0.5% Friday morning, setting it up for a possible test of support at its 21-day line.
Health care giant UnitedHealth Group is tracing a flat base that features a 558.20 buy point. Shares are about 6% away from the latest entry after giving up support near their 50-day line Thursday. UNH stock cut below its 50-day moving average in weak trade on Thursday — investors should be on alert for a volume increase if the stock falls further. Shares dropped 0.8% early Friday.
Top Stocks To Buy And Watch: Allegro, Dexcom, KLA, United Rentals
Allegro MicroSystems ended Thursday sharply below a cup-with-handle's 32.07 buy point, and narrowly below its 21-day moving average amid the day's 5.8% decline. ALGM stock was down 0.7% Friday.
IBD Leaderboard stock Dexcom is holding support below a 123.46 buy point in a flat base. The stock is about 6% below the entry after Thursday's 4.3% drop, and sitting on its 21-day line of support. Dexcom stock was down 2.4% early Friday.
Chip leader KLA is also testing support after it fell under a cup-with-handle's 392.60 entry during Thursday's 5.3% drop. KLA shares were down 0.1% Friday.
United Rentals is slipping back below what IBD Leaderboard pinpoints as a 368.04 buy point in a cup-with-handle pattern. Shares closed below the buy point, but still holding short-term support at the stock's 10-day moving average, following Thursday's 2.9% fall. URI stock was up 0.4% Friday.
Stocks To Buy And Watch
These are seven top stocks to buy and watch in today's stock market, including three Dow Jones leaders.
|Correct Buy Point
|Type Of Base
|Cup with handle
|Cup with handle
|Cup with handle
|Cup with handle
|Cup with handle
Source: IBD Data As Of Dec. 15, 2022
Tesla stock reversed 0.55% higher Thursday, snapping a three-day losing streak. Shares traded up 1.4% Friday.
On Thursday, TSLA stock hit its lowest level since November 2020, reaching a new 52-week low price at 153.28. Shares closed more than 60% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 4.7% Thursday, falling to its lowest level since Nov. 9. The stock is around 25% off its 52-week high. Apple stock traded up 0.3% Friday.
Microsoft ended a three-day win streak Thursday, falling 3.2%. This week, the stock found resistance at its long-term, 200-day line. The software giant remains about 28% off its 52-week high. Microsoft shares declined 0.1% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.