Dow Jones Reverses on Hot Inflation Data; JPMorgan, UnitedHealth Earnings Rally

The Dow Jones Industrial Average reversed lower on Friday amid weaker-than-expected U.S. retail sales data. Dow Jones Stocks JP Morgan (JPM) and UnitedHealth (UNH) rebounded following better than expected results.


September retail sales were flat, missing Econoday’s estimate for a 0.2% rise. Meanwhile, consumer sentiment beat estimates with a reading of 59.8 in September, above estimates for a reading of 58.8. Finally, the University of Michigan’s one-year inflation expectations were higher than expected, at 5.1% in October versus 4.7% in September. UoM inflation expectations measure the percentage that consumers expect the price of goods and services to change over the next 12 months.

Stock Market Today: Earnings Season Heats Up

Friday started with a loaded mix of earnings news. JPMorgan Banks, Morgan Stanley (MRS), Citigroup (This Wells Fargo (WFC) reported. Just like healthcare giant UnitedHealth.

Citigroup shares fell less than 1% shortly after the company’s report. JPM stock rebounded 2% after better-than-expected third-quarter results, while Morgan Stanley stock fell 3% on weak earnings and sales. UNH shares rose 2% on strong results, as well as a positive outlook. And Wells Fargo stock jumped 3% despite missing earnings estimates.

Delta Airlines (DAL) rebounded more than 2% on an analyst upgrade, following its third-quarter report on Wednesday. Grocery chains Kroger (KR) and Albertson (ACI) traded sharply lower, after the companies confirmed Kroger would buy Albertsons, in a bid to better compete walmart (WMT) and Amazon (AMZN).

Leader in electric vehicles You’re here (TSLA) reversed a 1.6% decline on Friday. Among the industrialists of the Dow Jones, the titans of tech Apple (AAPL) and Microsoft (MSFT) were slightly higher after today’s stock market open.

Cardinal Health (ACH), Conoco Phillips (COP), Denbury (DEN) and Vertex Pharmaceuticals (VRTX) – as well as Dow Jones stocks Chevron (CLC) and Merck (MRK) – are among the best stocks to watch. Keep in mind that the current stock market correction is a time for investors to sit on the sidelines and build watchlists of top growth stocks.

Cardinal Health and Vertex are stocks in the IBD ranking. Chevron and Conoco were featured in this week’s Stock Near A Buy Zone column, along with two other top stock ideas. Vertex was IBD’s title of the day on Friday. Merck was Tuesday’s IBD 50 Stocks To Watch pick.

Dow Jones Today: Treasury Yields, Oil Prices

After Friday’s opening bell, the Dow Jones Industrial Average reversed down 0.1%, while the S&P 500 fell 0.3%. The tech-heavy Nasdaq composite was down 0.8% in morning action.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.2% and the SPDR S&P 500 ETF (SPY) rose 0.1%.

The 10-year Treasury yield fell on Friday, falling to 3.88% after Thursday’s brief jump above 4%. The jump came after inflation data showed prices in September rose 0.4%, hotter than the expected 0.2% increase.

Meanwhile, U.S. oil prices fell about 2% on Friday, pushing West Texas Intermediate futures below $88 a barrel. Oil prices threaten to return much of Thursday’s rebound.

Stock market rally attempt

On Thursday, the Dow Jones Industrial Average fell as much as 1.6% before closing with a 2.8% gain. The tech-heavy Nasdaq composite reversed an early plunge of more than 3% into a 2.2% climb. The Nasdaq staged its best comeback since Feb. 24, according to Dow Jones Market Data.

Thursday’s The Big Picture commented: “With the market in correction mode, investors should follow companies that easily beat earnings results and have strong upside reactions. They could be among the stock market leaders if the market is able to extend his rebound.”

Thursday was Day 1 of the stock market’s last attempted rally, so investors are now waiting for a follow-up day, which may be as early as Tuesday of next week. One day tracking confirms the start of a new uptrend. Keep in mind that not all trails work, so it’s important to increase exposure slowly and methodically as the uptrend reveals itself.

Check out IBD stock listings, like the IBD 50 and stocks near a buy zone, for stock ideas.

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Chevron, Merck

Energy giant Chevron found support on its 50-day line on Thursday, with a nearly 5% lead. Shares are consolidating below a buy point of 182.50 ahead of the company’s earnings release on Oct. 28. Shares of Chevron fell 1.2% early Friday, following a decline with oil prices.

The CVX stock boasts a solid 98 out of a perfect IBD Composite Rating of 99, according to the IBD Stocks Scorecard. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.

Member of the Dow Jones and IBD 50 stock, Merck is approaching a buy point of 93.12 double bottom, according to IBD MarketSmith pattern recognition. The relative strength line reached a new high this week as the stock decisively recovered its main 50-day moving average. Third quarter results are expected on October 27 before the opening bell.

Merck shares fell 0.1% on Friday morning.

4 growth stocks to watch in the currentrent Stock market correction

Top stocks to watch: Cardinal, Conoco, Denbury, Vertex

IBD Leaderboard stock and medical leader Cardinal Health are shaping a flat base that has a buy point of 72.38, according to IBD MarketSmith’s chart analysis. Shares of the drug distribution heavyweight are once again receiving support around their major 10-week moving average, according to the rankings commentary. Earnings are expected on November 4. The shares traded up 0.7% on Friday.

Energy giant ConocoPhillips regained a buy point of 118.49 in a cup with handle amid Thursday’s 5.5% lead. The stock’s RS line hit a new high on Thursday, illustrating strong market outperformance. Earnings are expected on November 3. The shares were down 1.1% on Friday.

Denbury tested its cut base’s 94.05 buy point on Thursday, briefly dropping that level before closing above it. Actions erupted earlier this week following reports that Exxon Mobil (XOM) is considering a recovery. Stocks are in the 5% hunting zone rising to 98.75, although the market remains in a correction. The company will report earnings on November 3. Shares fell 0.75% on Friday.

Biotech leader Vertex Pharmaceuticals continues to build a flat base with a buy point of 306.05 and an early entry at 296.90. Its RS line hit a new high this week, confirming the biotech leader as a key stock to watch. VRTX stock found support at its 50-day line on Thursday. The results are expected on October 27. The shares traded up 0.8% on Friday.

Join the IBD experts as they analyze the top stocks in the current stock market rally attempt on IBD Live

Tesla Stock

Tesla stock rose 2.1% on Thursday, after the morning’s big losses. Shares are still at their lowest level since early July and about 47% off their 52-week high. Tesla stock fell 1.6% on Friday morning.

The electric vehicle giant’s third-quarter results are on Oct. 19. Tesla is expected to earn $1.03 per share adjusted on sales of $22.4 billion.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rebounded 3.4% on Thursday, rebounding from new recent lows. Still, stocks are around 22% off their 52-week high and below their 50- and 200-day lines. Apple stock rose 0.3% on Friday.

Microsoft rose 3.8% on Thursday, rebounding from this week’s 52-week low price. The software giant is around 33% off its 52-week high. Microsoft shares gained 1% early Friday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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