Stocks jeopardized their weekly winning streak Friday as Dow Jones futures and other major indexes fell Friday morning after the Labor Department’s stronger-than-expected December jobs report. Meanwhile, artificial intelligence leader Palantir Technologies (AI) tumbled on a PLTR stock analyst’s downgrade.
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Ahead of the opening bell, Dow Jones futures lost 0.25% vs. fair value, while S&P 500 futures were down 0.3%. Tech-heavy Nasdaq 100 futures lost 0.35% in morning action.
Among U.S. exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 0.4%, while the SPDR S&P 500 ETF (SPY) fell 0.3%.
The 10-year Treasury yield rose to 4.06% Friday after the jobs report after closing Thursday at 3.99%, its highest level since Dec. 13. Also, oil prices looked to rebound from Thursday’s losses, as West Texas Intermediate futures rose nearly 2% Friday morning. WTI futures moved above $73 a barrel.
Palantir Sinks; Strong Jobs Report
Palantir shares sank more than 4% Friday after Jefferies downgraded the stock from hold to underperform, with a price-target cut to 13 from 18.
“We underestimated the severity of the slowdown in Palantir’s commercial and government businesses, which has resulted in a longer-than-expected demand recovery that could continue to constrain growth through 2024,” Jefferies analyst Brent Thill wrote in a note to clients.
Early Friday, the Labor Department’s December employment report showed an increase of 216,000 jobs, much stronger than the expected 158,000. It was also higher than November’s 199,000 increase.
Meanwhile, October’s jobs numbers were revised down from 150,000 to 105,000. And November’s jobs numbers were lowered from 199,000 to 173,000.
The unemployment rate remained unchanged at 3.7%. It was expected to tick higher to 3.8%.
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Dow Jones Falls From Highs
On Thursday, the Dow Jones Industrial Average inched higher, while the S&P 500 lost 0.3% to extend its losing streak to four sessions. The tech-heavy Nasdaq composite declined nearly 0.6%, making it five consecutive down days.
Barring a sharp reversal, it seems likely the S&P and Nasdaq will break their nine-week winning streak. The S&P was down 1.7% for the week through Thursday while the Nasdaq has fallen 3.3%. The Dow was off 0.7% through Thursday.
Thursday’s Big Picture column commented, “With the stock market continuing its recent pullback to kick-start 2024, IBD recommends an exposure level of 60% to 80%. Many leading stocks are breaking below the 21-day exponential moving average, which is a short-term sell signal that can offer an opportunity to take some profits.”
Now is an important time to read IBD’s The Big Picture column amid the continuing stock market rally. Be sure to read how to adjust to changing market conditions, with IBD’s new exposure levels.
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Best Stocks To Buy And Watch
Magnificent Seven player Alphabet (GOOGL), Celsius (CELH), Netflix (NFLX) and Snowflake (SNOW) — along with Dow Jones components Amgen (AMGN), Caterpillar (CAT) and Visa (V) — are among the best stocks to buy and watch in the current market rally.
Caterpillar and Nvidia are featured in this Stocks Near A Buy Zone column.
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Dow Jones: Amgen Extends Gains
Drug leader Amgen added to Tuesday’s breakout gains past a 288.46 official buy point in a flat base, with a 0.8% rise Thursday. Shares are barely extended beyond the 5% buy area that went up to 302.88. AMGN stock fell 0.2% early Friday.
Heavy machinery giant Caterpillar ended Thursday about 2% below its 293.88 buy trigger, amid a 0.6% gain. CAT stock was down 0.6% Friday morning.
Payments leader Visa remains in buy range above a 250.06 entry in a cup base, according to IBD MarketSmith pattern recognition. V stock fell 0.1% Friday.
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Google Stock Tests Key Level
Alphabet moved further below its 139.42 buy point in a cup with handle following a 1.8% drop Thursday, according to IBD MarketSmith. Shares closed Thursday below their 50-day line, a key level to watch. GOOGL stock fell 0.1% early Friday.
Netflix moved up 0.9% Thursday, still squarely below a 482.70 buy point out of a cup with handle. NFLX stock added 0.3% Friday morning.
Fitness drink leader Celsius rebounded 2.15% Thursday, taking back a part of Wednesday’s sharp losses. Investors could view the recent strength as an aggressive entry, but it’s clearly a tough trade at this point. The official buy point is 68.95.
Celsius investors could use 62.99 or a downward-sloping trendline as other early entries. CELH stock lost 0.3% Friday morning.
Artificial intelligence leader Snowflake extended the week’s losses Thursday, falling 0.3% and dropping further below a cup-with-handle’s 192.66 buy point. SNOW stock inched lower early Friday.
Best Bets In Today’s Action
These are four best stocks to watch in today’s stock market, including a Dow Jones leader.
| Company Name | Symbol | Correct Buy Point | Type Of Buy Point |
|---|---|---|---|
| Celsius | (CELH) | 68.95 | Consolidation |
| Caterpillar | (CAT) | 293.88 | Cup base |
| Netflix | (NFLX) | 482.70 | Cup with handle |
| Snowflake | (SNOW) | 192.66 | Cup with handle |
Source: IBD Data As Of Jan. 4, 2024
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Magnificent Seven Stocks: Nvidia, Tesla
Magnificent Seven stocks Nvidia (NVDA) and Tesla (TSLA) traded mixed Friday morning. NVDA stock was up 0.5%, while Tesla shares were down 0.7%.
Nvidia ended Thursday’s session up 0.9%, holding just above a double-bottom base’s 476.09 entry. Nvidia, an IBD Leaderboard stock, also is now forming a flat base that has a 505.48 buy point. A test of the 50-day line seems likely after the recent weakness.
Electric-vehicle giant Tesla dipped 0.2% Thursday, extending a losing streak to five sessions. TSLA is just above the 50-day line. Tesla stock has a big double-bottom pattern with conventional buy point of 278.98.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones components in the Magnificent Seven, Apple (AAPL) and Microsoft (MSFT) traded mixed ahead of Friday’s stock market open.
Apple traded further below its 50-day line Thursday, with a 1.2% decline. Shares are also below a 192.93 buy point. AAPL declined 0.5% Friday morning.
Microsoft stock dropped 0.7% Thursday, still holding above a 366.78 cup-base buy point. Meanwhile, the 50-day line will be an important level to watch in the coming sessions. And the software giant was up less than 0.1% Friday morning.
Be sure to follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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