Stock Market: Dow Sinks While Nasdaq Climbs; Costco Hits A High

The Dow Jones Industrial Average was flat while other major stock market indexes posted modest gains in morning action Friday. Investors tried to digest economic data that fell short of expectations.


The December Empire State manufacturing index made a surprise drop to -14.5 vs. the positive 3.7 expected, and lagged November’s 9.1 reading. The reading from the Federal Reserve Bank of New York showed weakening in the manufacturing sector, as a reading below zero indicates worsening conditions.

New orders fell as interest rates remained high on the expectation of a slowing economy. Shipments also dropped.

Meanwhile, the Federal Reserve said November industrial production increased 0.2%, which was short of forecasts for a 0.3% gain but higher than the revised 0.9% drop in October.

Indexes Start To Climb Again

The Dow Jones Industrial Average slipped 0.1% in recent action, while the Nasdaq composite outperformed and added 0.5%. The S&P 500 was flat in morning trades on the stock market today. Meanwhile, the Russell 2000 index slid fractionally.

Volume rose on the New York Stock Exchange and fell on the Nasdaq vs. the same time on Thursday. Volume could be volatile Friday, as it marks a quadruple witching expiration day, when index futures, index options, stock options and single stock futures all expire.

The 10-year Treasury yield shed 2 basis points to 3.91%.

The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, bumped up 0.7%. The Innovator IBD 50 ETF (FFTY) also added 0.7%.

Stock Market Movers: Costco Stock Hits A High

Costco Wholesale (COST) jumped more than 4% in huge volume following the company’s better-than-expected fiscal first-quarter earnings and sales report late Thursday. Its board of directors declared a special cash dividend of $15 per share to COST shareholders of record as of Dec. 28. The dividend will be paid on Jan. 12.

The stock is extended from a flat base with a 571.16 buy point. COST stock reached an all-time high Friday.

Lennar (LEN) sank nearly 2% after the homebuilder beat fiscal fourth-quarter profit and revenue views, but investors focused on the company’s lack of an outlook.

“We will not guide full-year margin at this time, as the interest rate environment is rapidly evolving,” Chief Executive Stuart Miller said in the company’s earnings release. Lennar’s earnings grew 3% after three declining quarters. Its sales also broke a downward trend and grew 8% after two lower quarters.

LEN is extended from a cup-with-handle base with a 131.27 buy point after an eight-session rally, and hit an all-time high on Thursday.

Olive Garden Stock Pulls back

Darden Restaurants (DRI) eased from larger morning losses and was down around 1% after the restaurant company reported a beat on its fiscal second-quarter adjusted earnings and a small miss on sales estimates. The Olive Garden parent raised its full-year fiscal 2024 adjusted earnings outlook. But it gave a sales outlook for the full year that was slightly below analysts’ forecasts.

Shares remain in the 5% buy zone of a cup-with-handle base with a 158.70 buy point.

Roku (ROKU) tumbled more than 3% after MoffettNathanson downgraded the streaming device stock to a sell from neutral rating, but raised its price target to 66 from 64. ROKU retreated from the buy zone of a consolidation and fell below the 98.44 buy point. The stock tested its 21-day exponential moving average where it’s trying to find support.

Stock Market Shakers: Solar Stock Is A Favorite

First Solar (FSLR) added more than 3% after Jefferies initiated coverage on the solar module stock with a buy rating and a 211 price target. Jefferies began coverage on five solar stocks and selected FSLR as its top pick, according to a Barron’s article. The move adds to Thursday’s nearly 8% jump, as solar stocks outperformed. FSLR reclaimed its 50-day line on Thursday.

Tractor Supply (TSCO) skidded more than 2% after BofA Securities downgraded the stock to underperform from neutral and cut its price target to 171 from 207.

Scholastic (SCHL) plummeted after the children’s books distributor reported a miss on its fiscal second-quarter profit and sales expectations. The company also lowered its full-year revenue expectations to flat or slightly down vs. the 3% to 5% growth previously guided.

Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.


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