The Dow Jones Industrial Average and other major stock indexes held strong gains near midday Friday, unfazed by stronger-than-expected inflation data. Salesforce stock was an early leader in the Dow Jones today as buyers flocked to large-cap technology stocks again. Bullish gainers in the Nasdaq 100 included earnings winners Marvell Technology and Workday.
Tesla rallied for the second straight session with its sights set on the 200 level, which happens to correspond to the stock's 200-day moving average. Separately, CEO Elon Musk's neuro-tech startup, Neuralink, received FDA approval to begin testing the device on humans. Neuralink is building an implantable, brain-computer interface that translates thought into action.
Inside the Personal Income & Spending report for April, the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, rose 0.4% month over month, with a 4.4% annual increase.
Core PCE climbed 0.4% month over month, with a 4.7% annual rise. Overall, the numbers were a little stronger than expected and raised the odds quite a bit for another 25-basis point interest rate hike at the June Fed meeting. That would bring the federal funds rate up to a range of 5.25% to 5.50%.
The 10-year yield edged up 2 basis points to around 3.83% after gaining ground for the ninth time in 10 trading sessions Thursday. The yield is up about 48 basis points after hitting a low of 3.35% on May 11.
Just before the open, CNBC reported that debt-ceiling negotiators are closing in on a deal, with IRS funding a key talking point.
Dow Jones Today
Salesforce was up nearly 3% as the software leader holds above short-term support levels. Earnings will be out next week, with results due Wednesday after the close.
Intel rebounded nearly 4% after a tough showing Thursday that saw shares dive 5.5%. Investors sold INTC stock Thursday and piled into Nvidia after the latter reported earnings and raised its revenue outlook significantly. Nvidia is up 23.3% for the week, on pace for its best week since November 2016.
American Express added 3%, but AXP stock remains on a downtrend, stuck below its downward-sloping 50-day moving average.
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The Invesco QQQ Trust extended gains after hitting its highest level in 11 months Thursday, rising another 2.2%.
The S&P 500 added 1.1%, helped in part by a bullish earnings report from Workday. The enterprise software firm gapped up out of a cup base after reporting a 58% jump in earnings. Revenue increased 17% to $1.68 billion.
The Dow climbed 0.9%, or 297 points, while the Nasdaq composite added 1.9%.
Among other movers outside the Dow Jones, chip stock Marvell Technology vaulted more than 25% even as adjusted profit fell 40% from a year ago. Investors focused instead on comments from CEO Matt Murphy:
"AI has emerged as a key growth driver for Marvell, which we are enabling with our leading network connectivity products and emerging cloud optimized silicon platform. While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in fiscal 2024 to at least double from the prior year and continue to grow rapidly in the coming years."
MRVL stock is up 37.9% for the week, on pace for its best week since April 2001, according to Dow Jones Market Data.
Ulta Dives On Results
In the retail sector, Ulta Beauty fell more than 13% in heavy volume after the retailer reported a sharp slowdown in earnings and revenue growth. Adjusted profit increased 7% to $6.74 a share, with revenue up 12% to $2.63 billion.
ELF Beauty, meanwhile, barely budged after soaring 20.5% Thursday on blowout earnings. Shares were down around 1.5% near midday.
Besides WDAY stock, Broadcom was a big gainer inside the MarketSmith Growth 250, up nearly 7%. Oppenheimer maintained an outperform rating and raised AVGO's price target to 800 from 720. Earlier this week, Broadcom inked a multibillion dollar supply deal with Apple to supply radio frequency and wireless components and modules.
Broadcom reports earnings next week. Results are due Thursday after the close.
Please follow Ken Shreve on Twitter at IBD_KShreve for more stock market analysis and insight.
