The Dow Jones Industrial Average fell sharply Friday morning, extending losses from Thursday’s stock market sell-off. Earnings season heated up with quarterly results from financial giants Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC).
Among the Dow Jones leaders, Apple (AAPL) fell 0.4% Friday, while Microsoft (MSFT) was down 0.1%. Also among the Dow 30, financial leaders Goldman Sachs (GS) and JPMorgan Chase (JPM) are near new buy points in today’s stock market.
Electric-vehicle leader Tesla (TSLA) traded down 1.5%. EV truck rival Rivian (RIVN) fell almost 1%. Lucid Group (LCID) dropped 1%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were higher.
Among Friday’s top stocks to buy and watch, Applied Materials (AMAT), Mosaic (MOS), SVB Financial (SIVB) and Taiwan Semiconductor Manufacturing (TSM) are in or near new buy zones. Keep in mind the current stock market health isn’t exactly conducive to new purchases.
Dow Jones Today:
After the stock market open Friday, the Dow Jones Industrial Average moved down 0.95%, while the S&P 500 dropped 0.6%. And the tech-heavy Nasdaq composite declined 0.4%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 0.4% in morning trade, and the SPDR S&P 500 ETF (SPY) fell 0.6%.
The 10-year Treasury yield ticked higher, near 1.74% Friday morning. On Thursday, the 10-year Treasury yield dropped for a third straight day, closing at 1.71%.
Stock Market Rally Weakens
The stock market posted a disappointing performance Thursday, as the Nasdaq and S&P 500 sold off sharply. The Nasdaq more than erased all of the prior two days of gains, leaving it back near its 200-day moving average. Meanwhile, the S&P 500 gave up its 50-day support level.
Thursday’s The Big Picture commented: “Don’t entirely give up on the market rally yet. The Nasdaq found support at its long-term 200-day line earlier this week. That could still provide a launch pad for a new sustained rally, although that’s less likely right now. If the Nasdaq further weakens and takes out its 200-day line, then more downside is likely. As usual, don’t predict the market’s direction; be flexible and let the market decide your best course of action.”
For more daily stock market commentary, check out IBD’s The Big Picture.
Stocks On The Move: Ford, NetApp
Stock market leader Ford (F) dropped 2.5% Friday after RBC Capital Markets downgraded the stock from outperform to sector perform. Shares closed Thursday more than 50% above a 16.56 buy point in a cup base.
NetApp (NTAP) rose nearly 1% Friday morning after Cowen upgraded the stock from market perform to outperform. Shares are in buy range past a 94.79 buy point in a flat base.
Stock Market Earnings: Citigroup, JPMorgan, Wells Fargo
Ahead of Friday’s open, financial giants Citigroup, JPMorgan Chase and Wells Fargo reported their quarterly results.
Citigroup dropped about 3% Friday, just after releasing fourth-quarter earnings results. Shares are back above their 50-day line, but still below their 200-day line — despite a six-day advance. Shares ended Thursday about 15% off their 52-week high.
Dow Jones stock JPMorgan reported strong earnings and sales numbers, but shares sold off more than 6% Friday morning. The stock is building a flat base with a 173.06 entry.
Wells Fargo reported strong earnings and sales results, sparking a 2% rise in morning trade. The stock is extended past a 52.67 buy point in a flat base following a Jan. 4 breakout.
Dow Jones Stocks To Buy And Watch: Goldman Sachs
Dow Jones stock Goldman Sachs rose 0.1% Thursday, shrugging off the market weakness, but remains below the 50-day line. Shares continue to trace a cup-with-handle base with a 412.76 buy point, according to IBD MarketSmith chart analysis. Shares declined 3.2% Friday. The company reports December-quarter results on Tuesday.
Stocks To Buy And Watch: Applied Materials, Commercial Metals, Diamondback, SVB Financial
IBD SwingTrader stock Applied Materials failed to follow through on Wednesday’s bullish action, falling back below its 159.10 flat-base buy point, according to IBD MarketSmith chart analysis, during Thursday’s 1.5% loss. Positively, the stock’s relative strength line is just shy of new highs. AMAT shares rose 0.5% Friday.
Mosaic gave up a portion of Wednesday’s breakout move, falling 0.7% Thursday. Shares closed in buy range above a cup with handle’s 41.25 entry. MOS stock boasts a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The stock rallied 3% Friday after BMO Capital upgraded the stock from market perform to outperform.
SVB Financial is tracing a cup base with a 763.32 buy point. Look for a potential handle to offer a more risk-optimal buy point. Shares slid 3.5% Thursday, finishing right at the 50-day line. Shares were down over 2% Friday. The Santa Clara, Calif.-based bank reports fourth-quarter results on Thursday.
Taiwan Semiconductor broke out past a 135.60 buy point in a cup with handle, jumping more than 5% Thursday after the company beat analyst estimates for the fourth quarter. The 5% buy area tops out at 142.38. TSM stock dropped 1.5% Friday.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto stock rose for a third straight session Thursday, gaining 0.1%. The stock is moving up the right side of a consolidation with a 37.55 entry while an early entry at 33.86 is also in play. Shares were up 0.15% Friday.
Xpeng Motors dropped 1.8% Thursday, but still held above the 50-day line. Shares were fashioning a cup with handle, but that formation is gone now. The stock continues to build a consolidation with a 56.55 entry. Aggressive investors could use 51.60 as an earlier entry. Shares inched higher Friday.
Among U.S.-based EV stocks, Lucid Motors shares dropped around 1% Friday. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base. Meanwhile, the stock’s basing process ran into some trouble after Thursday’s 8.85% plunge.
EV-truck maker and recent initial public offering Rivian moved down about 1% Friday, on pace to add to Thursday’s 7.1% tumble. RIVN shares closed Thursday about 55% off their post-IPO highs
Tesla stock traded down 1.5% Friday, threatening to add to Thursday’s nearly 7% dive. Shares again gave up their 50-day moving average Thursday. Last week, the EV leader gave up its critical 50-day moving average line and triggered the 7%-8% loss-cutting sell rule from a 1,119.10 trend line buy point before staging a three-day rebound.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Thursday about 17% off that 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock declined 1.9% Thursday, snapping a four-day win streak. Shares are about 12% past a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Shares fell 0.4% Friday.
Software leader Microsoft skidded 4.2% Thursday, hitting a new recent low. The top Dow Jones stock continues to etch a flat base with a 349.77 buy point, but the stock clearly has more work to do before a potential breakout. Shares were down 0.1% 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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