Dow Jones futures rose ahead of key economic data on Friday as the stock market appeared to be contributing to Thursday’s gains. AI stock leader C3.ai (AI) rose 20% following the company’s better-than-expected earnings results, in which Chief Executive Thomas Siebel praised a “dramatic change” in sentiment for C3.ai’s artificial intelligence solutions.
Economic data due Friday morning includes S&P Global’s Services Purchasing Managers’ Index, or PMI, and the Institute for Supply Management’s services index, or ISM. The PMI services index is expected to stand at 50.5, while the ISM services index is expected to fall to 54.5 in February from a reading of 55.2 in January. The PMI comes out at 9:45 a.m. ET, while the ISM number goes out at 10 a.m.
In terms of revenue, Broadcom (AVGO), Costco (COST) and Zscaler (ZS) were on the move.
Broadcom shares rose 1.4%, while Costco shares fell 2% in premarket trading. Shares of Zscaler plummeted 11.6% after the company posted billing growth barely surpassed by analyst estimates.
Bitcoin plummeted nearly 5% Friday morning as investors weighed in on the latest financial losses at a cryptocurrency-focused bank Silvergate capital (SI). Meanwhile, US senators questioned cryptocurrency exchange Binance over its money laundering controls, calling it a “hotbed of illicit financial activity”. Bitcoin traded around $22,400 in morning trading.
EV giant Tesla (TSLA) was trading 1.6% higher Friday morning after a hectic trading week that saw stocks point to a weekly loss on Thursday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were mixed ahead of the stock market opening.
IBD Leaderboard watch list stock Palo Alto Networks (PANW), Deere (THE), Toll Brothers (To land Sales team (CRM) – as well as Dow Jones stocks American Express (AXP), Cisco systems (CSCO) and JPMorgan Chase (JPM) – are among the top stocks to watch amid the recent weakness in the stock market.
Palo Alto is an IBD Leaderboard watchlist stock. Deere was a recent IBD Stock Of The Day pick. And American Express was near a buy zone in this week’s Equities section.
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Dow Jones Today: Oil Prices, Treasury Yields
Prior to the market opening on Friday, Dow Jones futures were up 0.2% from fair value, and S&P 500 futures were up 0.3%. The tech-heavy Nasdaq 100 futures narrowed their early gains to 0.2%, while chipmaker Marvell Technologies (MRVL) lost more than 9% on weak first-quarter earnings expectations.
Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.2% and the SPDR S&P 500 ETF (SPY) was up 0.2% early Friday.
The yield on 10-year Treasury bonds rose to 4.07% to close at the highest level since Nov. 9 and on track to extend a weekly profit streak to six. Early Friday morning, the 10-year rate fell sharply to 4.02%.
Oil prices in the US stalled after solid gains this week, falling 0.5% on Friday morning. West Texas Intermediate futures traded just below $78 a barrel, up about 2% for the week and marking the first weekly increase in three weeks.
Stock market rally struggles
On Thursday, the Dow Jones Industrial Average rose nearly 1.1% and the S&P 500 rose 0.8%. The Nasdaq rose 0.7% and the small-cap Russell 2000 followed with a gain of 0.2%.
Thursday’s Big Picture column noted, “Still, the upward market trend isn’t over yet, so keep an eye out for new market leadership that could emerge, such as Duolingo (DUOL), and stocks that continue to hit new highs such as First solar energy (FSLR).”
This is an important time to read IBD’s The Big Picture column in the midst of the now tumultuous stock market rally.
Five Dow Jones stocks to buy and watch now
Dow Jones Stocks to Buy and Watch: American Express, Cisco, JPMorgan
Featured in this week’s Stocks Near a Buy Zone column, American Express is building a giant cup-with-handle base showing a buy point of 182.25. The shares are only 3% below their buy point, as they fell 0.3% on Thursday. Bullish, the stock’s relative strength line is at new highs, a very positive sign ahead of a potential breakout. AXP shares rose 0.5% on Friday morning.
Banking giant JPMorgan is in buy range above its 138.76 flat-base buy point despite a 1% loss Thursday, according to IBD MarketSmith chart analysis. Stocks are recovering from their key 50-day moving average last week. JPM shares rose slightly higher early Friday.
JPM shares show a solid 95 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Cisco Systems rose 0.4% on Thursday and still remained sharply below the 50.81 buy point from a flat base. Stocks are trying to halt their slide around their 50-day line and are about 4% below entry. CSCO shares moved slightly lower on Friday.
4 Top Growth Stocks to Buy and Watch in the Stock market rally
Top stocks to buy and watch: Palo Alto, Salesforce
IBD Leaderboard watchlist stock Palo Alto Networks is building to the right of a base with a buy point of 193.01 after last week’s increase of more than 10%. PANW shares fell 0.3% Friday morning.
backstory: Last week, the cybersecurity giant reported good results for the quarter ending January, when earnings were $1.05 per share, up 81% from a year earlier, on a 26% increase in revenue to $1.7 billion.
Dow Jones leader Salesforce made a bullish breakaway gap past a buy point of 178.94 on strong Q4 earnings results. Shares rose 11.5% on Thursday and are in the 5% buy zone rising to 187.89. CRM shares were up a fraction on Friday.
backstory: Salesforce sells software under a subscription model. The software helps companies organize and handle sales activities and customer relationships. The company has expanded into marketing, customer service and e-commerce. Salesforce said it has dissolved its “M&A committee,” implying it will no longer make major acquisitions, amid growing pressure from activist investors.
Deere, Toll Eye Latest points of sale
Deere shares rose 0.4% on Thursday, still closing below their 50-day line. Shares are 6% below a buy point of 448.50 in a flat basis. DE shares were up a fraction Friday morning.
backstory: Deere, an industry benchmark, has shaken off fears of recession and inflation to post solid earnings. Over the past year, higher commodity prices have enabled farmers to purchase both new and improved equipment. In the fiscal first quarter ended Jan. 29, the tractor maker posted a 124% increase in earnings per share on total sales growth of 32.2%, both ahead of estimates. Earnings growth accelerated for the second quarter in a row.
Homebuilder Toll Brothers builds a cup-with-handle base that displays a buy point of 63.29. Bullish, the stock has a relative strength line at new highs during this week’s market action. TOL shares show a solid 95 IBD Composite Rating. Shares of Toll Brothers rose 0.4% early Friday.
backstory: Last week, luxury homebuilder Toll Brothers beat earnings and revenue forecasts while maintaining its full-year expectations. The homebuilder’s financial report comes as a 12-month decline in US home prices showed signs of slowing in January.
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Stocks to buy and watch in Stock Market Rally
Here are six top stocks to buy and watch in the current stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct point of sale||Point of sale type|
|Toll Brothers||(TOLL)||63.29||Cup with handle|
|Cisco systems||(CSCO)||50.81||Flat base|
|Palo Alto Networks||(PANW)||193.01||Consolidation|
|Sales team||(CRM)||178.94||Cup with handle|
Source: IBD data as of March 2, 2023
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Tesla shares fell 5.85% on Thursday after investor day failed to unveil a next-generation electric car. Stocks have a three-day loss streak and are set for weekly losses of 3%.
Tesla shares appeared to be recovering from Thursday’s losses, rising 1.6% in Friday morning trading. Tesla sold 74,402 Chinese-made electric vehicles in February, up 31.6% from a year earlier and up 12.6% from January, according to data from the China Passenger Car Association.
Dow Jones leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stocks rose 0.4% on Thursday, still well below their 200-day line. Shares are down about 19% from their 52-week high. Apple shares rose 1% on Friday.
Microsoft shares remain below the 200-day mark, despite rising 2% on Thursday. The stock is more than 20% off its 52-week high following recent declines. MSFT shares fell 0.1% early Friday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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