The Dow Jones Industrial Average rallied on positive news Friday. Telsa (TSLA) managed to reverse higher after an early plunge. World Wrestling Entertainment (WWE) rocketed on the return of Vince McMahon. Apple (AAPL) and Intel (INTC) were blue chip winners.
A trio of promising stocks were among names testing buy points. ELF Beauty (ELF), Caterpillar (CAT) and Rio Tinto (RIO) all impressed by moving above entries.
Jobs Data, Economic News Boost Stocks
Indexes soared following Friday’s jobs report and weak economic data.
Nonfarm payrolls rose by 223,000 in December, above estimates for 200,000. But wage gains were lighter than expected. Average hourly earnings rose 4.6% vs. a year ago, while analysts had expected a 5% pop. The unemployment rate fell to 3.5%, the lowest since 1969.
Easing wage growth was seen as a positive in the fight against inflation. But it is also only a step in the right direction, and more progress will be needed. At this stage, it will not be enough to dissuade the Fed from making additional rate hikes.
The Institute of Supply Management’s services index gave stocks a further helping hand, flashing a contractionary reading below 50 for the first time since May 2020. This was surprisingly weak.
Odds for a 25-basis-point hike at the Feb. 1 Fed meeting jumped to 76% after the report, according to CME FedWatch.
Nasdaq Soars, Small Caps Shine
The Nasdaq fared best out of the major indexes, vaulting 2.6%. Old Dominion Freight Line (ODFL) shined as it jumped 6.8%.
The S&P 500 also impressed with a gain of 2.3%. Costco (COST) led the upside with a 7.3% gain following a strong sales report.
The 11 S&P 500 sectors were all positive. Materials and technology were strongest while health stocks posted the slimmest gains.
Small caps also turned in eye-catching performances, with the Russell 2000 closing up 2.3%.
Growth stocks also moved higher, with the Innovator IBD 50 ETF (FFTY) rallying 1.4%.
Dow Jones Today: Apple Stock Pops, Intel Leads
The Dow Jones Industrial Average powered higher. It finished up about 700 points, or 2.1%.
Apple (AAPL) had a strong day as it popped 3.7%. This made it one of the index’s top performers.
But it was chip giant Intel that turned in the strongest gain, vaulting 4.2%. Dow (DOW) and Boeing (BA) were not far behind.
WWE Stock Explodes On Vince McMahon Move
World Wrestling Entertainment flew higher than an Ultimate Warrior gorilla press Friday, soaring 17%. Even this was off the day’s highs.
It was bolstered by news the firm is welcoming founder Vince McMahon to its board of directors.
McMahon, who previously appeared on screen as part of the franchise’s colorful cast of characters, resigned as CEO last year amid an investigation into sexual misconduct allegations.
The wrestling Svengali and majority shareholder could be set to make a major decision, after The Wall Street Journal reported he is returning to pursue a potential sale of the company.
WWE stock managed to gap through its 50-day moving average but there is currently no entry point.
Tesla Stock Reverses Higher; Elon Musk Jokes
Tesla stock finally found its footing as it reversed higher Friday.
It revved its way out of negative territory as it turned in a gain of 2.5% but remains shy of its major moving averages.
Tesla stock initially got hit on the news it lowered prices for its Model 3 and Model Y vehicles in Asia.
It had earlier made a new 52-week low at 102.17. Shares closed Tuesday at their lowest level since Aug. 13, 2020, about 73% off the 52-week high following disappointing sales data.
Tesla CEO Elon Musk has come under fire for allowing his Twitter takeover to distract him from his EV business.
He appeared to joke about his current predicament on social media. “If I dig my grave deep enough, maybe it comes out other side of Earth,” he tweeted.
Market Takes Big Step, These 9 Stocks Flash Buy Signals; Tesla’s China Price War
BIIB Stock Pops On Alzheimer’s Approval
Biogen (BIIB) stock was halted late Friday before popping after the Food and Drug Administration approved its second Alzheimer’s treatment.
The approval for the product, now called Leqembi, is on an accelerated basis, meaning it’s contingent upon further testing.
Analysts see potential for a major blockbuster. In a November report, RBC Capital Markets analyst Brian Abrahams said Leqembi could generate $400 million in worldwide sales in 2024, growing to $5 billion by 2027 and $10 billion by 2031.
Biogen ended the session up 2.8%. Partner Eisai (ESALY) popped 4.6%.
Outside Dow Jones: 3 Stocks Test Entries
ELF Beauty is in a buy zone after it soared above a flat base buy point of 57.03. This is a second stage base, a positive.
The firm’s products are especially popular with younger consumers. A recent Piper Sandler report ranked ELF the top preferred cosmetic brand among teens.
Industrial machinery giant Caterpillar cleared a flat base entry of 239.95.
The relative strength line has been moving well of late, a good sign. Solid earnings are reflected in an EPS Rating of 85 out of 99.
Both CAT and ELF have won spots on the prestigious IBD Leaderboard list of stocks due to their bullish behavior and overall excellent performance.
Rio Tinto stock moved into a buy zone after clearing a cup-with-handle entry point of 73.34.
The Anglo-Australian firm operates in a broad range of metals and minerals. Its primary focus is iron ore, a key ingredient in steelmaking.
Steel demand could be set to increase, with China rushing to reopen following its draconian zero-Covid policy.
Rio Tinto is among the top 8% of stocks over the last 12 months in terms of price performance, reflecting optimism on future prospects.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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