The Dow Jones Industrial Average rallied Friday on another dose of inflation data, the personal consumption expenditure index. Amazon stock plunged on a weak sales outlook, while Apple, Intel and Chevron shares all climbed on earnings beats.
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Amazon (AMZN) shares crumbled nearly 10% after the company reported third-quarter results late Thursday that beat on earnings but gave an outlook that fell short. Apple (AAPL) stock rallied more than 4% in morning trade. Late Thursday, the tech titan beat Wall Street’s targets for its fiscal fourth quarter thanks to strong iPhone and Mac computer sales.
Meanwhile, the Federal Reserve’s preferred inflation gauge came out Friday morning at 8:30 a.m. ET. The PCE price index rose 0.3% for the month of September, in line with estimates. Year over year, the PCE index climbed 6.2%, cooler than the 6.3% estimate. Personal income rose 0.4% in September, just above estimates that called for a 0.3% rise.
The PCE price index is one measure of U.S. inflation, tracking the change in prices of goods and services purchased by consumers throughout the economy.
Stock Market Today: Chevron, Intel Earnings
Other key earnings movers Friday were Dow Jones stocks Chevron (CVX) and Intel (INTC), along with energy giant Exxon Mobil (XOM) and renewables leader First Solar (FSLR).
Chevron stock rose 1.9%, while Intel shares jumped 8% after beating lowered expectations for the third quarter and slashing its outlook for the fourth quarter. Exxon shares gained about 2%. And First Solar stock rose more than 2% despite missing earnings and revenue targets.
Electric-vehicle giant Tesla (TSLA) traded up around 0.5% Friday morning, while Dow Jones tech leader Microsoft (MSFT) was also higher after today’s stock market open.
AutoZone (AZO), Cardinal Health (CAH), Eli Lilly (LLY) and Texas Roadhouse (TXRH) — as well as Dow Jones stocks Merck (MRK) and UnitedHealth Group (UNH) — are among the top stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to put their watchlists into action, and to hone their pyramiding technique.
Young rallies, particularly those fighting bear markets, often fail. Pyramiding provides a method of moving into new stock positions incrementally, in order to minimize risk to capital.
Cardinal and Texas Roadhouse are IBD Leaderboard stocks. UnitedHealth was featured in this week’s Stocks Near A Buy Zone column, along with three other top stock ideas.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday’s opening bell, the Dow Jones Industrial Average rose 1.3%, while the S&P 500 futures moved up 0.7%. The tech-heavy Nasdaq composite gained 0.8% in morning action, with Amazon trading at the bottom of the list.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded up 0.2%, and the SPDR S&P 500 ETF (SPY) rose 0.5%.
The 10-year Treasury yield ticked higher to 4.01% Friday morning, cutting into this week’s losses. On Monday, the 10-year Treasury yield closed at 4.23%, settling at its highest level since June 2008 before falling the following three sessions. The 10-year Treasury yield is set to snap a 12-week win streak.
Meanwhile, U.S. oil prices declined more than 1% Friday, threatening to end a four-day win streak. West Texas Intermediate futures traded below $88 a barrel.
Stock Market Rally Continues
On Thursday, the Dow Jones Industrial Average rallied 0.6%, while the S&P 500 fell 0.6%. The tech-heavy Nasdaq composite lost 1.6%.
Thursday’s The Big Picture commented, “Investors should continue to track companies that handily beat earnings results and have strong upside reactions, like Enphase Energy (ENPH), which was Wednesday’s IBD Stock Of The Day. They could be among the stock market’s leaders if the market is able to shrug off its recent losses and move higher.”
Now is an important time to read IBD’s The Big Picture column. Following last week’s powerful gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the new uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Merck, UnitedHealth
Merck is extended beyond a double bottom’s 93.12 buy point after reporting a solid third-quarter beat on Thursday. The 5% buy area went up to 97.78. Merck shares traded a fraction lower Friday.
Health care giant UnitedHealth is approaching a cup-with-handle’s 553.23 buy point, according to IBD MarketSmith pattern recognition. Shares fell 0.25% Thursday, holding just shy of the stock’s latest entry.
UNH stock was up 0.4% Friday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Buy And Watch: AutoZone, Cardinal, Eli Lilly, Texas Roadhouse
Auto parts leader and recent IBD Stock Of The Day AutoZone is out of buy range past a cup base’s 2,362.34 buy point after racing higher 4.05% Thursday. The 5% chase zone went up to 2,480.46. AutoZone shares rose 0.1% Friday.
IBD Leaderboard stock Cardinal Health is just out of buy range past a short cup-with-handle’s 71.22 entry, according to IBD MarketSmith chart analysis. Shares are also above a flat base’s 72.38 buy point. Earnings are slated for Nov. 4. CAH stock added 0.7% early Friday.
IBD SwingTrader stock Eli Lilly closed past its buy range above a flat base’s 335.43 buy point, climbing 1.9% Thursday. Shares were up 1.3% Friday morning, ahead of next Tuesday’s earnings report.
Texas Roadhouse moved further above a flat base’s 95.52 buy point during Thursday’s 1.5% gain. But, the stock declined 3.5% after the company’s earnings results.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock edged up 0.2% Thursday, rising for a third straight session and continuing to rebound after hitting a 52-week low Monday. Despite its recent gains, the stock closed about 46% off its 52-week high.
Shares of the EV giant moved up around 0.5% Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 3.05% Thursday, falling sharply for a second consecutive day. Shares ran into stout resistance around their 50-day line this week, which is a key level to watch. Apple stock moved up more than 2.5% after the company’s earnings late Thursday.
Microsoft declined another 2% Thursday, heading back toward its recent lows. Earlier this week, the stock ran into clear resistance at its 50-day line. The software giant is about 35% off its 52-week high. Microsoft shares rose 0.4% 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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