The Dow Jones Industrial Average managed to stay positive in afternoon action Friday, while other major stock market indexes were mixed amid a quarterly quadruple witching session. Investors also digested economic data that fell short of expectations.
Volume fell on the New York Stock Exchange and the Nasdaq vs. the same time on Thursday. Volume could end up much higher, however, because of a quadruple witching expiration day in which index futures, index options, stock options and single stock futures all expire.
Meanwhile, the December Empire State manufacturing index made a surprise drop to -14.5 vs. the 3.7 gain expected, and lagged November's 9.1 reading. The reading from the Federal Reserve Bank of New York showed weakening in the manufacturing sector; a reading below zero indicates worsening conditions.
New orders fell as interest rates remained high. Shipments also dropped.
Meanwhile, the Federal Reserve said November industrial production increased 0.2%. That was short of forecasts for a 0.3% gain but higher than the revised 0.9% drop in October.
Indexes Waver In Mixed Action
The Dow Jones Industrial Average added less than 0.1% in afternoon action, while the Nasdaq composite weakened its gain to 0.3%. The S&P 500 was down 0.1% in the stock market today.
In small caps, the Russell 2000 index lost 0.9%. And the 10-year Treasury yield added 1 basis point to 3.94%.
The Invesco QQQ Trust, which tracks the Nasdaq 100, bumped up 0.4%. The Innovator IBD 50 ETF added 0.1%.
Stock Market Movers: Power Stocks Dim
Electricity provider Exelon has had a wild ride as it tumbled for a second day in heavy volume after a jump on Wednesday. The stock sank below its 50-day line on Thursday and fell further below it on Friday, triggering a sell signal. The moves came after the Illinois Commerce Commission voted against an integrated power grid plan from Ameren Illinois and Exelon-owned ComEd.
Electricity and gas provider Ameren also sold off and undercut its 50-day line, flashing a sell signal.
Several analysts downgraded the stocks and cut their price targets following the news. EXC is on track for its lowest close since Oct. 20, 2022, when it closed at 35.54, according to Dow Jones Market Data. Exelon and Ameren were the biggest losers on the S&P 500 Friday.
Steel Stock Hits A Buy Point
Steel Dynamics surged in heavy volume after the company gave a preliminary fourth-quarter earnings outlook above analysts' estimates. STLD broke out of a long cup-with-handle base and topped the 120.60 buy point. Shares are in the 5% buy zone reaching to 126.63. STLD is a big gainer on the S&P 500 Friday.
Dow component Intel trimmed gains and was up 2.7% after BofA Securities upgraded the stock to neutral from underperform and raised its price target to 50 from 32. Shares hit a 52-week high Friday. Intel stock has gained around 44% since the chip giant reported better-than-expected third-quarter profit and revenue on Oct. 26.
Global Payments popped after the company said it is not in talks with Shift4 on a strategic deal. GPN stock moved in volatile action and heavy volume Thursday after a Bloomberg report said the companies were in talks.
Global Payments broke out of a cup base in heavy trading. It surpassed the entry at 129.69 but reversed course and closed Thursday below the entry. FOUR stock gained more than 5% in heavy action Friday. Shares are in a long, irregular base and are nearing a 76.40 buy point.
Stock Market Movers: Costco Stock Hits A High
Costco Wholesale jumped more than 4% in huge volume following the company's better-than-expected fiscal Q1 earnings and sales report, which came out late Thursday. Its board declared a special cash dividend of $15 per share to shareholders of record as of Dec. 28. The dividend will be paid on Jan. 12.
The stock is extended from a flat base with a 571.16 buy point. COST stock reached an all-time high Friday.
Lennar sank nearly 3% after the homebuilder beat fiscal fourth-quarter profit and revenue views, but investors focused on the company's lack of an outlook.
"We will not guide full-year margin at this time, as the interest rate environment is rapidly evolving," Chief Executive Stuart Miller said in the company's earnings release. Lennar's earnings grew 3% after three declining quarters. Its sales also broke a downward trend and grew 8% after two down quarters.
LEN is extended from a cup-with-handle base with a 131.27 buy point after an eight-session rally.
Olive Garden Parent Pulls back
Darden Restaurants trimmed larger morning losses and was down around 0.4%. The company reported a beat on its fiscal second-quarter adjusted earnings and a small miss on sales estimates. The Olive Garden parent raised its full-year adjusted earnings outlook. But it gave a sales outlook that was slightly below analysts' forecasts. Shares remain in the 5% buy zone of a 158.70 buy point.
Roku tumbled nearly 6% after MoffettNathanson downgraded the streaming device maker to sell from neutral, but raised its price target to 66 from 64. Roku fell below its 98.44 buy point.
Stock Market Shakers: Solar Stock Is A Favorite
First Solar added 5% after Jefferies initiated coverage on the solar module maker with a buy rating and a 211 price target. Jefferies began coverage on five solar stocks and selected FSLR as its top pick. The move adds to Thursday's nearly 8% jump, as solar stocks outperformed. FSLR reclaimed its 50-day line Thursday.
Tractor Supply skidded nearly 3% after BofA Securities downgraded the stock to underperform from neutral and cut its price target to 171 from 207.
Scholastic plummeted after the distributor of children's books reported a miss on its fiscal second-quarter profit and sales. The company also lowered its full-year revenue expectations to flat or slightly down vs. the 3%-5% growth previously forecast.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
