The Dow Jones Industrial Average reversed lower Friday amid weaker-than-expected U.S. retail sales data. Dow Jones stocks JPMorgan and UnitedHealth rallied following better-than-expected earnings results.
September retail sales were flat, missing Econoday estimates for a 0.2% rise. Meanwhile, consumer sentiment topped estimates with a 59.8 reading in September, above estimates for a 58.8 reading. Lastly, University of Michigan One-Year Inflation Expectations came in hotter than expected, at 5.1% in October vs. the 4.7% rate in September. The UoM Inflation Expectations measures the percentage that consumers expect the price of goods and services to change during the next 12 months.
Stock Market Today: Earnings Season Heats Up
Friday started with a busy mix of earnings news. Banks JPMorgan, Morgan Stanley, Citigroup and Wells Fargo reported. So did healthcare giant UnitedHealth.
Citigroup shares fell less than 1% shortly after the company's report. JPM stock rallied 2% after better-than-expected third-quarter results, while Morgan Stanley shares declined 3% on weak earnings and sales. UNH shares rose 2% on strong results, along with a positive outlook. And Wells Fargo stock jumped 3% despite missing earnings estimates.
Delta Air Lines rallied more than 2% on an analyst upgrade, following its third-quarter report on Wednesday. Grocery chains Kroger and Albertsons traded sharply lower, after the companies confirmed Kroger would buy Albertsons, in a bid to better compete with Walmart and Amazon.
Electric-vehicle leader Tesla reversed 1.6% lower Friday. Among the Dow Jones industrials, tech titans Apple and Microsoft were modestly higher after today's stock market open.
Cardinal Health, ConocoPhillips, Denbury and Vertex Pharmaceuticals — as well as Dow Jones stocks Chevron and Merck — are among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and build watchlists of top growth stocks.
Cardinal Health and Vertex are IBD Leaderboard stocks. Chevron and Conoco were featured in this week's Stock Near A Buy Zone column, along with two other top stock ideas. Vertex was IBD's Stock Of The Day on Friday. Merck was Tuesday's IBD 50 Stocks To Watch pick.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday's opening bell, the Dow Jones Industrial Average reversed 0.1% lower, while the S&P 500 moved down 0.3%. The tech-heavy Nasdaq composite turned down 0.8% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 0.2%, and the SPDR S&P 500 ETF rose 0.1%.
The 10-year Treasury yield declined Friday, falling to 3.88% following Thursday's brief jump above 4%. That jump came after inflation data showed prices in September rose 0.4%, hotter than the expected 0.2% increase.
Meanwhile, U.S. oil prices lost about 2% Friday, sending West Texas Intermediate futures below $88 a barrel. Oil prices are threatening to give back a large part of Thursday's rebound.
Stock Market Rally Attempt
On Thursday, the Dow Jones Industrial Average sold off as much as 1.6% before closing with a 2.8% advance. The tech-heavy Nasdaq composite reversed an early dive of more than 3% into a 2.2% climb. The Nasdaq staged its best comeback since Feb. 24, according to Dow Jones Market Data.
Thursday's The Big Picture commented, "With the market in correction mode, investors should be tracking companies that handily beat earnings results and have strong upside reactions. They could be among the stock market's leaders if the market is able to extend its rebound."
Thursday was Day 1 of the stock market's latest rally attempt, so investors now await a follow-through day, which can occur as early as Tuesday of next week. A follow-through day confirms the beginning of a new uptrend. Be mindful that not all follow-throughs work, so it's important to raise exposure slowly and methodically, as the uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron found support at its 50-day line Thursday, with a near-5% advance. Shares are consolidating below a 182.50 buy point ahead of the company's Oct. 28 earnings release. Chevron shares fell 1.2% early Friday, tracking lower with oil prices.
CVX stock boasts a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock's fundamental and technical metrics.
Dow Jones member and IBD 50 stock Merck is closing in on a double bottom's 93.12 buy point, according to IBD MarketSmith pattern recognition. The relative strength line hit a new high this week, as the stock decisively regained its key 50-day moving average. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares fell 0.1% Friday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Cardinal, Conoco, Denbury, Vertex
IBD Leaderboard stock and medical leader Cardinal Health is shaping a flat base that has a 72.38 buy point, according to IBD MarketSmith chart analysis. Shares of the drug distribution heavyweight are again receiving support around their key 10-week moving average, per Leaderboard commentary. Earnings are due Nov. 4. Shares traded up 0.7% Friday.
Energy giant ConocoPhillips regained a 118.49 buy point in a cup with handle amid Thursday's 5.5% advance. The stock's RS line hit a new high Thursday, illustrating strong stock market outperformance. Earnings are due Nov. 3. Shares moved down 1.1% Friday.
Denbury tested its cup base's 94.05 buy point Thursday, briefly giving up that level before closing above it. Shares broke out earlier this week following reports that Exxon Mobil is considering a takeover. Shares are in the 5% chase zone that runs up to 98.75, though the market remains in a correction. The company will report earnings are Nov. 3. Shares dipped 0.75% Friday.
Biotech leader Vertex Pharmaceuticals continues to build a flat base with a 306.05 buy point and an early entry at 296.90. Its RS line made a new high this week, confirming the biotech leader as a key stock to watch. VRTX stock found support at its 50-day line Thursday. Earnings are due out Oct. 27. Shares traded up 0.8% Friday.
Tesla Stock
Tesla stock rose 2.1% Thursday, reversing from big morning losses. Shares are still at their lowest level since early July and about 47% off their 52-week high. Tesla stock fell 1.6% Friday morning.
The EV giant's third-quarter results are Oct. 19. Tesla is expected to earn an adjusted $1.03 per share on sales of $22.4 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 3.4% Thursday, rebounding from new recent lows. Still, shares are around 22% off their 52-week high and below their 50- and 200-day lines. Apple stock moved up 0.3% Friday.
Microsoft rose 3.8% Thursday, rebounding from this week's 52-week low price. The software giant is about 33% off its 52-week high. Microsoft shares gained 1% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
