Major stock indexes were under mild selling pressure at midday Friday. But Procter & Gamble was a strong performer in the Dow Jones Industrial Average, up nearly 4% after reporting strong earnings and lifting its full-year revenue outlook. P&G stock made a bullish technical move out of a cup-with-handle base.
Home Depot was another early gainer in the Dow Jones today. The home-improvement chain is making a key test as it tries to rally above its 200-day moving average. Also in the Dow, Merck rallied 1% ahead of next week's earnings report.
The Dow Jones has been drifting lower in recent days, which is constructive price action after a bullish move off lows. A bona fide breakout over the 34,000 level could still be in the cards, but NYSE volume has been very light in recent days. Keep in mind that options expire today, which can result in higher short-term volume.
IBD 50 member Shockwave Medical rallied 8% on a Bloomberg report of takeover interest. However, it's not the first time SWAV has been mentioned as a takeover target. Last year, Penumbra and Johnson & Johnson were named as possible suitors.
WTI crude oil futures ticked up to $78 per barrel as earnings from oil services giant SLB made early headlines. SLB stock slumped 3% despite reporting revenue of $7.74 billion, up 30% year over year. But Wall Street frowned on cash flow from operations, which totaled just $330 million, well below FactSet consensus of $710 million.
The bond market was quiet, with the 10-year Treasury yield edging higher to around 3.56%.
Federal funds futures traders have fully baked in another 25-basis-point hike at the May meeting. That would lift the federal funds rate to a range of 5% to 5.25%. The chances for another quarter-point hike in June are only 26%.
Outside the Dow Jones
The focus has turned away from Fed interest rate policy for now, shifting to first-quarter earnings results. There could be a lot of fireworks next week, with Google-parent Alphabet, Meta Platforms, Microsoft and Amazon.com on the earnings calendar.
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Tesla edged higher despite a downgrade to a hold rating at Truist. Also, Truist lowered Tesla's price target by nearly 100, to 154. Investors shrugged off bullish comments from Ark Invest's Cathie Wood, who said Tesla could be a $2,000 stock by 2027.
AMZN stock was an early gainer Friday, up 3% on news of layoffs and a restructuring at its Whole Foods Market unit, which Amazon acquired in 2017 for $13.7 billion.
META stock eased 0.3% after the Wall Street Journal reported that CEO Mark Zuckerberg told employees in a town hall meeting that more job cuts could be coming, along with a slowdown in hiring.
Growth investors will also be eyeing next week's results from ServiceNow, Mobileye, Crocs and Leaderboard stock Meritage Homes. Homebuilders outperformed again Thursday, helped by strong results from D.R. Horton.
Stock Market Movers
Beyond the Dow Jones, hospital operator HCA Healthcare was a strong gainer in the S&P 500, up 5.5% on strong earnings and bullish guidance. HCA stock gapped up to an all-time high.
Dialysis services provider DaVita also outperformed in the S&P 500, up 2.5%. It's just below an 85.28 buy point.
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But the news wasn't all good in the S&P 500 as insurer W.R. Berkley and miner Freeport-McMoRan fell hard on earnings.
The S&P 500 suffered its first distribution day Thursday since the March 29 follow-through day. The index hasn't screamed higher since that bullish signal, but it's been holding support at its 10-day moving average.
Inside the IBD 50, several stocks in the medical sector scored healthy gains. Besides Shockwave, Amphastar Pharmaceuticals, Intra-Cellular Therapies and Inspire Medical Systems showed gains of 1% to 1.5%.
India-based HDFC Bank gave a buy signal in the MarketSmith Growth 250, rising past last week's high of 70.47.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
