The Dow Jones Industrial Average reversed higher Friday after key inflation data, with the early release of the Personal Consumption Expenditures price index. Meanwhile, Dow Jones chipmaker Intel was down as much as 10% on an earnings miss.
Investors received a breakdown of December personal income and spending, and monthly PCE inflation data, from the Commerce Department at 8:30 a.m. ET. The PCE price index rose 0.1% for the month, higher than the unchanged expectation. The annual inflation rate eased to 5% from 5.5%, in line with estimates. Core PCE prices rose 0.3%, as the core inflation rate fell to 4.4% from 4.7%. Both matched estimates.
The Fed's favorite inflation gauge, the core PCE price index, eased to a 3.85% annual rate in the fourth quarter, new data released with the GDP report showed on Thursday.
Fourth-quarter earnings season continued Friday, as results came from Dow Jones members American Express, Chevron, Intel and Visa, as well as KLA.
American Express shares jumped 6.5%, while Chevron declined around 2%. CVX stock is rounding out the right side of a cup base with a 189.78 buy point, according to IBD MarketSmith pattern recognition.
Intel shares plunged 7.8% after the company missed Wall Street's targets for the fourth quarter and guided much lower than expected for the current period.
Visa stock advanced 2% Friday after beating top- and bottom-line estimates. Visa shares closed Thursday in buy range above a 220.08 handle buy point in a long pattern. The 5% buy area goes up to 231.08.
Finally, KLA beat expectations for its fiscal second quarter. But its outlook for the current period was below estimates. KLAC stock dropped 5.5%.
Stock Market Today
Electric-vehicle leader Tesla rose around 2% Friday morning, looking to add to Thursday's big gains. Dow Jones tech giants Apple and Microsoft were mixed after today's stock market open.
IBD Leaderboard stock Axon Enterprise, recent IBD Stock Of The Day Etsy, Monster Beverage and Vertex Pharmaceuticals — as well as Dow Jones stock JPMorgan Chase — are among the top stocks to buy and watch, with the ongoing strength of the market rally.
Axon is an IBD Leaderboard stock. Etsy and Vertex were recent IBD Stock Of The Day picks. Axon and JPMorgan were featured in this week's Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
After Friday's opening bell, the Dow Jones Industrial Average rose 0.5%, reversing from early losses, and the S&P 500 moved up 0.4%. The tech-heavy Nasdaq composite rose 0.6% in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust rose 0.3% and the SPDR S&P 500 ETF traded up 0.2% early Friday.
The 10-year U.S. Treasury yield ticked higher to 3.55% Friday morning. The yield is poised to snap a three-week rally that drove the 10-year-yield close to its lowest level since mid-September.
Oil prices rose more than 1% Friday, with West Texas Intermediate futures moving above $82 a barrel. Oil prices are flattish for the week, near their highest prices since early December following two weeks of strong gains and ahead of the Organization of Petroleum Exporting Countries meeting next week.
Stock Market Rally
On Thursday, the Dow Jones Industrial Average rose 0.6%, and the S&P 500 gained 1.1%. The Nasdaq composite rallied 1.8%, as the small-cap Russell 2000 gained 0.7%.
Thursday's The Big Picture column commented, "IBD's stock market outlook is in a 'confirmed uptrend' amid strong gains since early January, when the Nasdaq signaled a follow-through day on Jan. 6. Given the market's current strength, it makes sense to methodically raise your exposure if your trades are doing well, with an invested percentage of 40%-60%. Profitable trading should push you closer to the 60% threshold, especially after Thursday's tech-fueled gains."
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: JPMorgan
Banking giant JPMorgan is back above a 138.76 flat-base buy point amid a five-day win streak. JPM shares were up 0.6% Friday morning.
JPM stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Axon, Etsy
Security leader Axon rose 0.2% Thursday, moving higher in the 5% buy range above a 189.72 buy point in a cup-with-handle base. The buy zone tops out at 199.21. Axon shares were slightly higher Friday morning.
Backstory: Formerly known as Taser International, the company has taken advantage of the business opportunity offered by public demands for more oversight of police departments. Its line of body cameras and accompanying software are now market leaders. The Scottsdale, Ariz.-based company also boasts a cloud-based digital evidence platform.
Etsy broke out past a 137.01 buy point in a cup with handle Monday, but fell further below the entry with a 1% loss Thursday. If the stock retakes the buy point, the 5% buy area goes up to 143.86. ETSY stock lost 3% Friday.
Backstory: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that, in the last few years, has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.
Monster, Vertex Eye Buy Points
Monster Beverage is nearing a breakout past a flat base's 104.75 buy point after Thursday's 0.4% gain. MNST stock was down 0.5% Friday.
Backstory: Monster Beverage leads an energy-drink duopoly with privately held competitor Red Bull. The company's portfolio of energy drink brands include Monster Energy, Reign and NOS Energy.
Monster dominates energy drinks in the U.S. and claimed a 39% market share last year, according to Jefferies data, resulting in a record $5.5 billion in revenue for the company. Red Bull accounted for 37% of the American energy drink market in 2021. Upstart Celsius, which is on an impressive growth streak, claimed 4.9% of the market.
Recent IBD Stock Of The Day, Vertex Pharmaceuticals, is moving closer to a 324.85 buy point in a cup base after a fifth-straight gain Thursday. VRTX stock rose 0.2% Friday.
Backstory: The company is well-known for its cystic fibrosis treatments — a market that Vertex estimates at 88,000 patients. Of those, there are still 20,000 patients who could receive its old-school oral treatments. But analysts are watching for what's new from Vertex, including an updated regimen of three drugs that could strengthen Vertex's position against rival AbbVie.
Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today's stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Monster | 104.75 | Flat base | |
| Vertex | 324.85 | Cup base | |
| Axon | 189.72 | Cup with handle | |
| Etsy | 137.01 | Cup with handle | |
| JPMorgan | 138.76 | Flat base | |
| Chevron | 189.78 | Cup base | |
| Visa | 220.08 | Cup with handle |
Source: IBD Data As Of Jan. 27, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock surged 11% Thursday after the company's strong fourth-quarter results, extending a win streak to five sessions. After their strong rebound, shares are back above their 50-day line, though still below their 200-day line. Tesla stock closed about 62% off its 52-week high.
Shares of the EV giant rallied 2.2% Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 1.5% Thursday, snapping a four-day win streak. Shares remain above their 50-day line after strong gains in recent sessions. Still, the stock is around 20% off its 52-week high. Apple will report its quarterly earnings on Feb. 2. AAPL stock traded down 0.1% Friday.
Microsoft stock climbed 3.1% Thursday, decisively retaking its 50-day line, which is bullish for the stock's immediate prospects. Still, shares remain 22% off their 52-week high. Shares were up 0.3% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
