The Dow Jones Industrial Average maintained a solid gain in Friday afternoon trading, while the S&P 500 reached a record high, and the Nasdaq composite hit its highest level in two years.
Among the Magnificent Seven stocks, Nvidia (NVDA), Meta Platforms (META), and Google-parent Alphabet (GOOGL) performed well, although sellers impacted Tesla (TSLA). Tesla is set to report earnings next week, along with Netflix (NFLX).
Nvidia stock has shown strength since giving a buy signal on Jan. 8 when it cleared a 505.48 entry.
Insurer Travelers (TRV) emerged as a top gainer on the Dow Jones today after reporting strong earnings, aided by lower catastrophe losses. IBM (IBM) also outperformed ahead of its fourth-quarter earnings report next week.
Intel (INTC) and Salesforce (CRM) also displayed strength in the Dow Jones.
In broader markets, the Nasdaq composite rose by another 1.2%, building on Thursday’s nearly 1.4% jump. The Invesco QQQ Trust (QQQ) reached an all-time high with a 1.5% increase. Texas Instruments (TXN) and chip designers Qualcomm (QCOM) and Broadcom (AVGO) rallied more than 4%. IBD’s chip designer group reached a new high, rising 2%, while the chip-equipment group, featuring ASML (ASML), Lam Research (LRCX), and KLA (KLAC), also rallied.
The Dow Jones index gained 9.8%, and the S&P 500 picked up 0.9%. Super Micro Computer (SMCI) surged over 30% after significantly raising its fiscal second-quarter earnings and revenue outlook.
On the economic front, the 10-year Treasury yield retreated from highs but still rose 2 basis points to around 4.16%. Expectations of aggressive rate cuts by the Federal Reserve diminished, with Atlanta Fed President Rafael Bostic suggesting the first rate cut might occur in the third quarter.
Fed funds futures traders, per the CME FedWatch tool, indicated that the first rate cut could come as early as the March meeting. However, several rate cuts could potentially lower the Fed funds rate to 3.75% to 4% by year’s end.
Outside the Dow Jones index, iRobot (IRBT) faced significant losses, down nearly 28%, after reports indicated that European regulators might block Amazon’s acquisition of the company. Amazon had announced plans to purchase the Roomba vacuum cleaner maker in August 2022 for $1.7 billion.
Pure Storage (PSTG) continued its upward trend after Thursday’s breakout over a 38.28 entry, with shares rising by another 4%. In the MarketSmith Growth 250, Celsius (CELH) experienced selling pressure, dropping more than 12%, following a downgrade by Bank of America, citing increasing competition among other factors.
