The Nasdaq composite and Dow Jones Industrial Average rose sharply in early trading Friday. The major indexes are attempting to reclaim some of their steep losses from this week's sell-off. Both the Nasdaq and S&P 500 are on track to close with weekly losses of over 3%.
On Thursday, the S&P 500 came within a few points of a 20% decline to fall into a bear market. The Nasdaq is down more than 30% from its November all-time high.
A series of economic reports were released this week, including consumer price index and producer price index. Both indicated inflation is still exceeding expectations and holding near highs. This contributed to the market's weakness.
On Friday, the University of Michigan released the preliminary consumer sentiment index, which showed a 9.4% decline to 59.1 from 65.2 in April. Economists surveyed by Bloomberg expected a median reading of 64. This data implies that U.S. consumers are more concerned about their current financial situation.
In morning trading, the Dow Jones industrials traded up 1.6% while the S&P 500 gained 2.6%. Meanwhile, the small-cap Russell 2000 held a 3.1% gain, as the Nasdaq rose 4%. According to IBD data, volume was running lower on the Nasdaq and on the NYSE vs. the same time on Thursday.
IBD 50 Outperforms; Twitter Tumbles On Deal Doubts
The Innovator IBD 50 ETF, a benchmark for growth stocks, rose 4.8%, beating the indexes. The growth-focused ETF is still down over 3% this week. It's certainly been an unforgiving market for growth stocks.
IBD industry groups leading the upside Friday included several software-related groups. Many retail-related groups also led the upside, while solar energy stocks outperformed with a rise of 9%.
Among S&P 500 sectors, all 11 traded higher, with consumer discretionary and technology up the most.
The 10-year Treasury yield jumped to 2.93% Friday morning, then settled at around 2.9%. The yield declined for a fourth-straight session Thursday, closing at 2.81%, despite another elevated inflation number. On Monday, the 10-year Treasury yield traded as high as 3.16%, its highest level since November 2018.
Twitter shares tumbled more than 8% after Elon Musk tweeted early today that his acquisition of the social media company is "temporarily on hold." But later, he tweeted that he remains committed to the deal. Twitter shares gapped below the 50-day line in strong volume.
Oil Stocks Up On Rising Commodity Prices
U.S. oil prices gained 3.7% early Friday, with Texas Intermediate crude trading above $110 a barrel. The commodity slid below $100 a barrel earlier this week. But oil prices are bouncing back, fueling oil and gas stocks.
The Energy Select Sector SPDR gapped up and rose 3.7%. The ETF is once again trading above the 80.32 buy point of a flat base. Its relative strength line is also looking strong as oil stocks held up well relative to the rest of the market this week.
Dow Jones stock Chevron rose 2.2%. Shares recouped much of this week's losses and bullishly regained the 50-day line. The stock is forming a flat base with 174.86 entry. Shares remain 4% below the buy point while the RS line is ticking up to new highs.
Elsewhere, Cheniere Energy is one of the market's top stocks to watch. The stock is attempting to reclaim its 50-day line. Shares rose 4.1% Friday, as they continue to form a flat base that shows a 149.52 buy point, according to IBD MarketSmith chart analysis.
Energy giant Exxon also rose Friday, with a 2.7% gain. But the stock remains below a cup with handle's 89.90 buy point. The stock is trying to halt its slide around its 50-day line.
Follow Rachel Fox on Twitter at @IBD_RFox for more Nasdaq and stock market commentary.
