Dow Jones Plunges 450 Bps on Hot Inflation Report; Tesla stock skids below $200

The Dow Jones Industrial Average futures plunged 450 points on Friday on a warmer-than-expected inflation report. Meanwhile, Square-parent Block (SQ) jumped 2% even after reporting fourth-quarter earnings that missed estimates while revenue and gross profit beat Wall Street targets. And Tesla stock has skidded below 200 per share.


The Commerce Department released the Personal Consumption Expenditures Price Index early Friday. It showed that the PCE price index rose 0.6% in January, an annual rate of 5.4%. That was hotter than estimates which called for a monthly rise of 0.4% and an annual rate of 4.9%.

The PCE core price index rose 0.6% on the month, with an annual rate of 4.7%, above Wall Street estimates for a monthly increase of 0.4% and an annual increase of 4 .3%. Personal income grew less than expected, at 0.6% versus the 1% estimate. Consumer spending rose 1.8% in January, above estimates at 1.2%.

Meanwhile, new home sales and consumer sentiment data conclude Friday’s economic data at 10 a.m.

Of the other companies reporting profits, Autodesk (ADSK), Reservation (BKNG), caravan (CVNA), EOG Resources (EOG) and Free market (MELI) were on the move.

Autodesk beat Wall Street’s guidance for its fiscal fourth quarter, but disappointed its earnings outlook for the current quarter and full year ahead. ADSK stock plunged more than 9% in morning action.

Bookings were up more than 2% at the start of trade, while Carvana slumped 17%. EOG Resources fell 5.4%. And IBD Leaderboard MercadoLibre stock rose less than 1% on better-than-expected fourth-quarter results.

stock market today

The leader in electric vehicles, Tesla, slipped more than 4% on Friday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) fell after the stock market opened.

IBD Ranking Stock Airbnb (ABNB), Deere (OF), Inspires medical systems (INSP) and wing stop (WING) – as well as Dow Jones stocks Cisco Systems (CSCO) and JPMorgan Chase (JPM) – are among the top stocks to watch, with recent stock market weakness.

Airbnb is an IBD ranking stock. Inspire and Deere were recently selected by IBD Stock Of The Day. Cisco Systems and Wingstop were featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Price, Treasury Yields

After the market opened on Friday, the Dow Jones Industrial Average fell 1.4% and the S&P 500 1.6%. The tech-heavy Nasdaq composite lost 1.9% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.6% and the SPDR S&P 500 ETF (SPY) fell 1.3% early Friday.

The 10-year US Treasury yield fell to 3.87% on Thursday, down for a second consecutive session. But the 10-year yield rose to 3.94% on Friday morning – on track for a fifth straight weekly advance – after the inflation report.

Oil prices appeared to support Thursday’s rebound, but West Texas Intermediate futures fell 1% on Friday morning. WTI was trading around $75 a barrel.

Stock market rally struggles

On Thursday, the Dow Jones Industrial Average climbed 0.3% and the S&P 500 gained 0.5%. The Nasdaq led the way, advancing 0.7%.

Thursday’s Big Picture column commented: “If more and more breakouts are starting to fade and your portfolio progress is declining, then you should be proactive and reduce your exposure even further to match the market action. Keep a close eye on sell signals, like breakouts of the 50-day line and 7%-8% sell signals, to avoid bigger losses.”

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Cisco, JPMorgan

Banking giant JPMorgan recouped its fixed buy point of 138.76 in Thursday’s 0.8% gain, according to IBD MarketSmith’s chart analysis. Stocks are also rebounding from their key 50-day line. Shares of JPM traded down 0.1% early Friday.

JPM stock is posting a solid 94 out of a perfect IBD Composite Rating of 99, according to the IBD Stocks Balance Sheet. The composite rating is designed to help investors easily find the highest growth stocks.

Featured in this week’s Stocks Near A Buy Zone column, Cisco Systems is attempting to break above a flat base with a buy point of 50.81. But the breakout continued to crumble on Thursday, with shares down another 0.2%. Cisco stock lost 1.4% early Friday.

4 best growth stocks to buy and watch in the market Stock market rally

Top stocks to buy and watch: Airbnb, Inspire

IBD Leaderboard Airbnb stock soared last week, breaking above the buy point of 121.50 on a mug with handle. After four consecutive losses, the stock falls back into the 5% buy range which rises to 127.58. But investors should wait for support before considering a stock purchase. Meanwhile, the breakout spread placed an alternate entry at 135. ABNB stock fell 2.4% on Friday morning.

Pass: The company operates an online marketplace for hosting. Its main offerings are homestays for vacation rentals. While tourism has been hit hard by the coronavirus pandemic, it continues to roar after strict closures.

Recent IBD stock of the day Inspire Medical Systems ended a four-day losing streak on Thursday, up 0.5%. The medical leader continues to break above the buy point of 262.64 from its flat base, according to recognition from IBD MarketSmith models. The buy zone peaks at 275.77. INSP stock has a modest composite rating of 86 IBD. INSP stock was down 1.7% early Friday.

Pass: The company sells an implantable device to treat sleep apnea by electrical nerve stimulation – a process called neurostimulation.

Deere, Wingstop Eye Latest Purchase Points

Deere shares fell 0.3% on Thursday, still testing support around their 50-day line. The shares are only 5% away from a buy point of 448.50 in a flat basis. DE stock was down a fraction on Friday morning.

Pass: An industry gauge, Deere shrugged off recession and inflation fears to generate strong earnings. Last year, rising commodity prices allowed farmers to buy both new and improved machinery. In the first fiscal quarter ended Jan. 29, the tractor maker posted a 124% increase in earnings per share on a 32.2% increase in total revenue, both beating estimates. Earnings growth accelerated for a second straight quarter.

Wingstop is back in the 5% chase zone after a 169.04 cup entry with a handle that peaks at 177.49 after Thursday’s 2.7% decline. WING stock lost 0.7% early Friday.

Pass: The Dallas-based restaurant chain has more than 1,900 locations in the United States and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the United Kingdom. Wingstop added 61 new locations in the fourth quarter, bringing Wingstop’s total footprint to 1,959 restaurants worldwide.

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Stocks to buy and watch in the stock market rally

These are the top six stocks to buy and watch in today’s stock market, including two leaders from the Dow Jones.

Company Name Symbol Correct point of purchase Point of purchase type
Inspires medical systems (INSP) 262.64 Flat bottom
Visteon (RESUME) 152.20 cup bottom
Cisco Systems (CSCO) 50.81 Flat bottom
Airbnb (ABNB) 135.00 Breakaway gap
JP Morgan (JMP) 138.76 Flat bottom
wing stop (WING) 169.04 Mug with handle
Source: IBD data as of February 24, 2023

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Tesla Stock

Tesla stock rose 0.6% on Thursday, climbing for a second day. Despite their strong rebound since Jan. 6, stocks are still below the 200-day line and this key level looms as a potential resistance zone. Shares closed Thursday about 48% off their 52-week high.

Shares threatened to give up Thursday’s gains, falling 4.1% in Friday morning action.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.3% on Thursday, still trying to find decisive support at their 200-day line. Shares are around 17% off their 52-week high. Apple stock fell 2.2% on Friday.

Microsoft shares ended a five-day losing streak, rising 1.3% on Thursday. Stocks have recovered to their 200-day line, but are still around 20% off their 52-week high after recent losses. MSFT stock was down 2.1% on Friday morning.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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