The major stock market indexes pulled ahead, strengthening at midday and trading at the highs of the day. The February PMI shows mild economic expansion and increased employment.
The Dow Jones Industrial Average rose 0.8%. The S&P 500 climbed 1.1%. The Nasdaq composite showed its dominance, gaining 1.3%. The small-cap Russell 2000 added 1%.
NYSE and Nasdaq volume was lower than Thursday at the same time.
The S&P 500 is testing resistance at the 50-day moving average but is holding above the 200-day line, where it found support Thursday. The Dow is rising after testing its December lows, while the Nasdaq is adding room above its 200-day moving average.
The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF rose 1.4%. The Innovator IBD 50 ETF was up 1.8%.
Crude oil rose 1.3% to $79.17 per barrel. The Energy Select Sector SPDR ETF reclaimed 1%, back above the 21-day line.
Bitcoin futures sank 4.9% to $22,430. The 10-year U.S. Treasury yield shed 6 basis points to 4.0%.
February PMI Inches Higher
The Composite PMI Output Index rose to 50.1 in February, from 46.8 in January, breaking a seven-month contraction trend. A reading above 50 indicates expansion.
The final February Purchasing Managers' Services Index (PMI) came in slightly higher, at 50.6 vs. the 50.5 consensus. The index is based on 400 U.S. companies surveyed monthly to provide a leading indication of the private sector services economy.
Selling prices increased to the highest level in four months. New business growth continued its decline, while service provider employment level increased at the fastest pace since September.
The February Institute for Supply Management (ISM) Services Index was 55.1 vs. 54.5 consensus, down from January's higher-than-expected 55.2. The ISM surveys several hundred service-providing firms from 16 industries. A reading above 50 indicates that the services economy is expanding.
The ISM business activity index dipped to 56.3 from January's unexpectedly robust 60.4 reading. New orders rose to 62.6, the highest level since Nov. 2021.
The employment index increased 4 points to 54.0, holding above the 50 level for the second straight month. The prices paid metric dipped to 65.6, representing a its fourth declining month, showing inflation is waning.
Stock Market Movers: Two AI Stocks Pop On Earnings
Medical device and contact lens maker Cooper gapped up 7% in heavy volume, following its better-than-expected Q1 EPS and sales report.
Arch Resources rose 2.3% and briefly touched the 166.33 buy point of a choppy base before pulling back slightly. The coal and metals producer stock's relative strength line hit a new high, as indicated by the blue dot on the MarketSmith chart.
C3.ai gapped up over 28% in heavy volume after reporting better-than-expected fiscal Q3 sales and a smaller loss, vs. the same quarter a year ago, and positive Q4 revenue guidance. "There is a genuine optimism in the marketplace for our solutions, and the overall business sentiment appears to be substantially improving," said CEO Thomas Siebel.
The artificial intelligence stock has gained an impressive 90% this year, and is back above the 21-day line.
Veritone surged over 19% in heavy volume, despite reporting a miss on Q4 sales and earnings per share. But it posted higher new bookings, which increased 141%. The AI stock remains below the 200-day and 50-day lines.
Hibbett pulled back 2% after a miss on Q4 top and bottom lines. The move sent shares of the sneaker and apparel retailer below the 50-day line in busy trading.
Hewlett-Packard pulled back 0.4% despite better-than-expected EPS and sales for the January-ended quarter and positive revenue guidance for the current quarter. "It was a blowout quarter," said CFO Tarek Robbiati. HPE is in a flat base with 17.35 buy point but found resistance at its 21-day line.
Costco fell 3.1% as it steepens its slide below the 50-day line. The warehouse club retail stock is the S&P 500's biggest loser today.
Salesforce reversed course, dipping 0.3% after yesterday's huge 11.5% gain, following a positive fourth quarter 2023 earnings report and positive guidance.
Futures: As Market Rally Revives, Do This
Friday's Movers
Broadcom gapped up 4.9% following Thursday's beat on top and bottom lines. The relative strength line is at a new high. The semiconductor stock is an S&P big gainer today.
Ferrari gapped up 3.1%, clearing a 270.45 handle entry. The move comes after news that a subsidiary of the luxury-car maker signed a multiyear agreement with gaming company Virtual Gaming Worlds.
United Airlines rose 1.8% and briefly tapped the 53.36 buy point of a flat base. Volume is light.
Chipmaker Marvell Technologies sold off over 8% following its Q4 earnings report and lower-than-expected current-quarter EPS and sales guidance.
Cybersecurity stock Zscaler plunged over 9% despite a positive January-quarter earnings report late Thursday. "For (fiscal) Q3, we're assuming billings to decline by approximately 9% sequentially compared to the mid-single digit percentage declines we've seen over the last few years," said CFO Remo Canessa.
Zscaler also announced a restructuring plan to include cutting its workforce by 3%.
EV charging station company ChargePoint clawed back from morning lows, dipping 2.4% after reporting a bigger-than-expected Q4 loss and lower sales. It also gave disappointing guidance.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
