Dow Jones futures sold off sharply after a hotter-than-expected inflation report — the consumer price index — which came immediately following Thursday’s stock market sell-off.
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Key earnings reports include DocuSign (DOCU) and Stitch Fix (SFIX). DOCU shares plunged 25%, while Stitch Fix shares tumbled 15%.
Netflix (NFLX) stumbled more than 4% Friday morning after Goldman Sachs downgraded the stock from neutral to sell, citing recession concerns and rising competition that will impact demand. Electric-vehicle giant Tesla (TSLA) traded 2% lower Friday.
Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were lower ahead of today’s stock market open.
Amid a struggling stock market rally, Dow Jones leaders Chevron (CVX), Merck (MRK) and Travelers (TRV) — along with Vertex Pharmaceuticals (VRTX), Albemarle (ALB), Eli Lilly (LLY), Northrop Grumman (NOC) and Ulta Beauty (ULTA) — are among IBD’s top stocks to watch for Friday.
Albemarle is an IBD Leaderboard stock. Vertex was featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Inflation Report
Ahead of Friday’s open, Dow Jones futures sold off 1%, while S&P 500 futures were down 1.2%. Nasdaq 100 futures dived 1.4%. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 1.5%. The SPDR S&P 500 ETF (SPY) lost 1.2% in early trade.
The 10-year Treasury yield ticked higher to 3.07% Friday morning after Thursday’s gains. Meanwhile, U.S. oil prices gained nearly 1%, with West Texas Intermediate trading above $122 a barrel. In early March, WTI briefly topped out above $130 a barrel. The national average price of gasoline in the U.S. surpassed $5 per gallon for the first time ever Thursday, according to GasBuddy.
Oil prices could see some impact from the weekly rig count census from Baker Hughes (BKR) due out at 1 p.m. ET.
The Labor Department’s Consumer Price Index showed that consumer prices rose 1% in May, hotter than the 0.7% estimate. Inflation surged 8.6% in May from a year ago, up from April’s 8.3% year-over-year rise and higher than estimates that called for a 8.2% rise.
Struggling Stock Market Rally
The stock market posted more disappointing action Thursday, as the major stock indexes finished with heavy losses.
Thursday’s The Big Picture column commented, “Another key aspect of market health — besides the amount of distribution — is the performance of market leadership. Bearishly, many recent breakouts are struggling or have failed entirely.”
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Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck, Travelers
Dow Jones leader and energy giant Chevron is making progress above a flat base’s 174.86 buy point, according to IBD MarketSmith chart analysis, following Thursday’s 2% decline. The 5% buy zone tops out at 183.60. CVX shares added 0.2% Friday.
CVX stock boasts 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.
Merck, a Dow Jones and IBD Big Cap 20 stock, fell further below its cup-with-handle’s 89.58 buy point Thursday, as shares dropped another 1.65%. The stock is now fighting for support around its key 50-day line. MRK shares inched higher Friday morning.
Insurance giant Travelers continues to build a flat base with a 188.08 buy point. Shares are further below their 50-day line after Thursday’s 2.5% fall. Travelers stock traded flat early Friday.
Five Top Growth Stocks To Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Albemarle, Eli Lilly, Northrop, Ulta, Vertex
IBD Leaderboard stock Albemarle is about 12% away from a cup-with-handle’s buy point at 273.78, according to IBD MarketSmith chart analysis. In recent weeks, Albemarle passed an early buy point near 248, but the stock is now below that entry as well. ALB shares dipped 0.4% Friday morning.
Pharmaceutical giant Eli Lilly tumbled 3.3% Thursday and is about 3% below a flat base’s 314.10 buy point. LLY shares traded flat Friday.
Northrop Grumman is further under its cup-with-handle’s 477.36 buy point after sliding another 2% Thursday. NOC shares were unchanged Friday morning.
Ulta Beauty finished within striking distance of a cup with handle’s 426.93 buy point after briefly topping the entry Wednesday and again Thursday. ULTA shares traded unchanged Friday.
Vertex Pharmaceuticals is below a cup with handle’s 276.10 buy point after Thursday’s 5.4% decline. The stock is close to triggering the 7%-8% loss-cutting rule and is also below the 50-day line. Vertex shares were quiet Friday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock fell 0.9% Thursday, snapping a three-day win streak. Shares threatened to add to those losses, trading 2% lower Friday morning.
The stock is still sharply below its 50- and 200-day moving averages. Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 42% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 3.6% Thursday. The stock remains far below its long-term 200-day line. AAPL stock traded down 1% Friday.
Software leader Microsoft lost 2.1% Thursday, and remains sharply below its 50- and 200-day lines. The stock closed more than 20% off its 52-week high. MSFT shares lost 1.2% Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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