Dow Jones Futures Fall Ahead Of Housing Data; Netflix Surges On Subscriber Growth
The Dow Jones Industrial Average fell Friday morning ahead of housing data, threatening to extend a three-day losing streak. China’s markets rallied heading into their Lunar New Year break, giving a boost to global markets. And Netflix (NFLX) stock surged more than 8% after the company’s stronger-than-expected subscriber growth.
The National Association of Realtors releases existing home sales at 10 a.m. ET. Sales in December are expected to contract further to 3.97 million annualized vs. November’s 4.09 million, according to Econoday estimates.
On the earnings front, energy giant SLB (SLB) reported better-than-expected earnings and sales for the fourth quarter. The company also hiked its quarterly dividend. SLB stock rose more than 1% in morning trade.
Stock Market Today
Regeneron Pharmaceuticals (REGN) rose around 1% after a JPMorgan upgrade from neutral to overweight, with an 850 price target. Dow Jones stock Salesforce (CRM) fell 0.5% after Cowen downgraded the stock from outperform to market perform, with a lowered price target of 160. Google-parent Alphabet (GOOGL) jumped more than 2.5% after the company said it will lay off 12,000 workers.
IBD Leaderboard stock Fluor (FLR), recent IBD Stock Of The Day Medpace (MEDP), Monster Beverage (MNST) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Visa (V) — are among the top stocks to buy and watch with the market testing the strength of a new rally.
Dow Jones Today: Oil Prices, Treasury Yields, Lunar New Year
After Friday’s opening bell, the Dow Jones Industrial Average moved down 0.1%, while the S&P 500 moved up 0.2%. And the tech-heavy Nasdaq composite climbed 0.6%, with Netflix and Alphabet leading the gainers.
The Shanghai Composite closed 0.7% higher, giving it a 4.7% gain for the month heading into its weeklong Lunar New Year holiday. Hong Kong’s Hang Seng Index surged 2.3%, putting its year-to-date gain at 9.7%. The Hong Kong Stock Exchange is closed through Wednesday.
The 10-year U.S. Treasury yield rose to 3.46% Friday morning, continuing to rebound after a tumble two days ago where it hit its lowest level since mid-September.
Oil prices inched higher Friday, putting West Texas Intermediate futures on pace to finish a second straight weekly advance. WTI futures traded near $81 a barrel. Oil prices could see some effect from Baker Hughes (BKR) weekly rig count census, due out at 1 p.m. ET.
Stock Market Rally
On Thursday, the Dow Jones Industrial Average declined 0.8%, and the S&P 500 also lost 0.8%. The Nasdaq composite sold off 1%. Both the S&P 500 and Nasdaq closed back below their recently reclaimed 50-day moving averages. The small-cap Russell 2000 dropped 1%.
Thursday’s The Big Picture column commented, “Volume fell on the Nasdaq and appeared to be lower on the NYSE vs. the prior session. Lower volume means the Nasdaq and S&P 500 avoided another distribution day. Remember, investors should be wary of a clustering of distribution days, which is a bearish indicator that represents institutional selling.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.
Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, Visa
Three straight days of losses put Caterpillar back in buy range above a flat base’s 239.95 buy point. Look for the stock to find support before considering a purchase. CAT stock traded down a fraction Friday.
Energy giant Chevron continues to fight to stay above its 50-day line amid back-and-forth action this week, as it remains below a flat base’s 189.78 buy point, according to IBD MarketSmith pattern recognition. Chevron’s fourth-quarter earnings are due Jan 27. CVX shares inched lower Friday.
Payments leader Visa is trading in buy range above a 220.08 handle buy point in a long pattern. The 5% buy area goes up to 231.08. Visa shares rose 0.6% early Friday.
Top Stocks To Buy And Watch: Fluor, Medpace
IBD Leaderboard stock Fluor is trying to break out past a flat base’s 36.16 buy point, but shares fell further below their buy point after this week’s losses. If shares retake that entry, the 5% buy area tops out at 37.97. FLR stock was up 1% early Friday.
Backstory: Fluor manages big infrastructure projects in the oil and gas, chemical, mining and transport industries. This is an earnings turnaround play. A poor EPS Rating reflects net losses in 2019 and 2020 and a dip in profit expected in 2022 to 86 cents a share. Analysts, however, see earnings vaulting 95% next year to $1.68 a share.
Medpace dropped 1.5% Thursday, ending a three-day win streak. Shares are just 3% away from a consolidation’s 235.82 buy point. Last week, shares moved above an early entry at 220.09. The company’s earnings results are expected on Feb. 13. Medpace shares were up 0.7% early Friday.
Backstory: Medpace is a clinical contract resource organization, or CRO. It helps drugmakers run the clinical studies needed to gain approval for new medicines. In the third quarter, the company issued a bullish outlook for 2023, calling for 18% sales growth at the midpoint of its guidance.
Monster, Vertex Trace Flat Bases
Monster Beverage is fighting for support around its 50-day line amid Thursday’s 0.9% fall. Shares are tracing a flat base with a 104.75 buy point. MNST stock was down 0.6% 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 (CELH), which is on an impressive growth streak, claimed 4.9% of the market.
Wednesday’s IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after bullishly retaking its 50-day line this week. VRTX stock was up 0.3% 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 (ABBV).
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|
|Visa||(V)||220.08||Cup with handle|
Source: IBD Data As Of Jan. 20, 2023
Tesla stock dropped 1.25% Thursday, falling sharply for a second day. Despite their recent rebound, shares remain sharply below their 50- and 200-day lines. In early January, shares hit a 52-week low at 101.81. Tesla stock closed Thursday about 67% off its 52-week high. Tesla earnings are due out Jan. 25.
Shares of the EV giant looked to bounce back from Thursday’s losses, trading up more than 1% Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares inched higher Thursday. The stock remains around 24% off its 52-week high. Apple will report its quarterly earnings on Feb. 2. AAPL stock traded down 0.3% Friday.
Microsoft stock slipped 1.65% Thursday, continuing lower after finding stout resistance at its 50-day line on Wednesday. The software giant is about 27% off its 52-week high. MSFT earnings are due out Jan. 24. Shares traded 1.3% higher early Friday.
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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