Dow Jones rises on key inflation data;  Nike stock sinks in earnings

The Dow Jones industrial average rose on Friday after the preliminary release of the personal consumption expenditures price index, the Federal Reserve's preferred inflation indicator. Meanwhile, Nike (OF) fell in its earnings report.


After the opening bell on Friday, the Dow Jones industrial average was up 0.3%, while the S&P 500 was up 0.5%. The tech-heavy Nasdaq composite also gained 0.5% in morning action.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQrose 0.55%, while the SPDR S&P 500 ETF (espionage) rose 0.5% in early Friday.

The yield on the 10-year U.S. Treasury note fell to 3.88% in morning trade. On Thursday, the benchmark rose to 3.89%, its lowest level since late July.

Oil prices continued their recent rally as West Texas Intermediate futures rose nearly 1% on Friday morning. WTI went above $74 a barrel. Last week, WTI briefly traded below $68 a barrel.

PCE price index, Nike revenue

Earlier on Friday, the Commerce Department released its monthly Personal Income and Expenditure report, saying personal income rose 0.4% in November, according to estimates.

The PCE price index fell 0.1% in the month, meeting estimates, with a 2.6% annualized increase rather than the 2.9% estimate. Finally, the core PCE price index rose 0.1% in November, below the 0.2% rise forecast, and a 3.2% annual increase, cooler than the 3.4% estimate.

The report indicated that PCE inflation has been running at an annualized rate of 2% over the past six months, while core inflation has eased to 1.9%. The Federal Reserve pays particular attention to the six-month figure to ensure inflation is truly settled. The findings help increase the chances of a rate cut in 2024.

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Dow Jones retail leader Nike fell nearly 12% after its fiscal second-quarter earnings were better than expected. But Nike warned of a “softer” sales outlook and lowered its full-year revenue forecast.

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The Dow Jones is recovering from the stock market selloff

The stock market posted a solid rebound on Thursday as the Dow Jones Industrial Average rose 0.9%. The S&P 500 rallied 1%, while the tech-heavy Nasdaq composite rose 1.3%. All three recovered large chunks of Wednesday's losses.

In Thursday's Big Picture column, “When Thursday's IBD Live SessionThe team warned that this is an important time to start monitoring your positions and taking some profits.”

It's an important time to read IBD's The Big Picture column amid continued stock market gains. Be sure to read how to invest during the current boom.

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Best stocks to buy and watch

Share on the IBD Leaderboard Datalog (the dog), (MNDY), the IBD SwingTrader issue Netflix (NFLX) and Snowflake (Snow) – with Dow Jones components American Express (AXP), caterpillar (CAT) and visa (V) — is one of the best stocks to buy and watch in the current market upturn.

Datatag and ELF Beauty are featured in a buy zone column next to these stocks.

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Dow Jones: Cat Eyes by Point

Financial leader American Express broke out of buy range on Thursday with a 2.3% advance, crossing a 175.31 buy point in a cup with handle. AXP stock was up 0.4% in early Friday trading.

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Heavy machinery company Caterpillar is trying to break out beyond the 293.88 buy trigger, but closed below the entry despite a slight uptick on Thursday. CAT stock was down 0.1% on Friday morning.

According to IBD MarketSmith pattern recognition, payments leader Visa is in a buy range above a 250.06 entry on a cup base. V stock added 0.3% on Friday.

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In NFLX buying range

On the IBD SwingTrader, Netflix ranked among the top stocks to buy and watch as it rose 0.5% Thursday. The streaming giant crossed a buy point of 482.70 a cup with the handle on Monday. NFLX stock added 0.3% Friday morning.

IPT Leaderboard Shares Datatag crossed the alternative handle buy trigger at 120.26 after big gains in recent weeks. DDOG stock rose 0.2% on Friday.

After Thursday's 0.8% drop, dropped its 185.81 buy point in a cup with a handle. IBD MarketSmith. MNDY stock was down one share on Friday.

AI leader Snowflake is in a buy range with a cup above the handle's 192.66 buy point. SNOW stock fell 0.4% on Friday, 2% above the buy trigger.

The best challenge in today's action

These are four of the best stocks to watch in today's stock market, including the Dow Jones leader.

Name of the company Symbol Perfect buying point Type of point of purchase
Utility items (Big) 145.86 Alternate entry
caterpillar (CAT) 293.88 cup base
Netflix (NFLX) 482.70 Cup with handle
Snowflake (Snow) 192.66 Cup with handle
Source: IBD data as of December 20, 2023

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Magnificent Seven: Nvidia, Tesla

Among the stocks known as the “Magnificent Seven”, Tesla (D.S.L.A) rose 1.1% in early Friday trading Nvidia (NVDA) gained 0.3%.

Graphics-chip giant Nvidia rebounded 1.8% on Thursday, ending a two-day slide. NVDA stock is still in a buy zone above the 476.09 double bottom entry.

Tesla shares rose 3% Thursday, ending at 252.75 below the initial entry. The stock's major double bottom pattern has a buy point of 278.98.

Dow Jones Leaders: Apple, Microsoft

Two Dow Jones stocks in the Magnificent Seven, Apple (APL) and Microsoft (MSFT), traded higher after today's stock market opened.

Apple shares fell 0.1% on Thursday as its breakout move continued to falter. Shares are not above the 192.93 cup-with-handle entry. Apple shares rose 0.2% on Friday.

Microsoft shares rose 0.8% Thursday, erasing Wednesday's losses. Shares remain above the 366.78 cup-base buy point. And the software giant had a fraction Friday morning.

Be sure to follow Scott Lehtonen on X, formerly known as Twitter @IBD_SLehtonen Learn more about growth stocks and the Dow Jones Industrial Average.

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