Dow Jones Holds Firm Above 34K; Adobe Surges On Bullish Earnings, AI Potential
The Dow Jones Industrial Averages traded near the flatline midday Friday, along with the other major stock indexes. Several Dow Jones stocks were in the green, including Boeing (BA), which faded from an early gain after reclaiming a 221.33 entry.
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Other top gainers in the Dow Jones today with gains of at least 1% include Intel (INTC), Nike (NKE), Coca-Cola (KO) and Visa (V).
Adobe (ADBE) is a nice winner in the stock market today, up around 2%. Late Thursday, the company reported earnings and revenue growth that accelerated from the prior quarter. Document cloud revenue increased 11%, with creative and digital media revenue up 9% and 10%, respectively.
Earlier this year, Adobe launched Firefly, a family of generative AI tools. Adobe was featured as an earnings option trade in last week's Earnings Preview.
In economic news, the University of Michigan's preliminary consumer sentiment survey showed consumer sentiment improving to 63.9 in June. That was above estimates and up from May's 59.2 reading. The survey's inflation outlook eased, too.
Outside The Dow Jones
The Nasdaq composite edged lower, with early leadership coming from names like Nvidia (TSLA) and Tesla (TSLA). NVDA hit another all-time high, helped by a positive note from Morgan Stanley, which maintained an overweight rating and lifted NVDA's price target to 500 from 450. Both stocks pared gains at midday.
The S&P 500 also fell modestly, buoyed by strength in West Pharmaceuticals (WST), which is quickly forming the right side of a shallow cup base. BofA Securities upgraded WST to buy from neutral with a 405 price target.
Several health care stocks outperformed in the S&P 500, including McKesson (MCK), which lifted past a 401.53 buy point.
Small caps lagged, with the iShares Russell 2000 ETF (IWM) down 1.1%. The small-cap index was weighed down by weakness in the SPDR S&P Regional Banking ETF (KRE), which was down nearly 2%.
The Nasdaq and S&P 500 marked powerful follow-throughs on March 29, putting the stock market back on a confirmed uptrend. But the Nasdaq 100 is quite overbought at this point, more than 11% above its 50-day moving average.
Volume was sharply higher compared to the same time Thursday. Today is a "quadruple witching" day of options and futures contract expirations, which typically causes heavy trading. The stock market will be closed Monday for the Juneteenth holiday.
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The 10-year Treasury yield was off highs but still added 3 basis points to 3.76% after a hawkish tone from Federal Reserve Chairman Jerome Powell Wednesday. The Fed, as expected, left the federal funds rate unchanged in a range of 5% to 5.25%. The CME FedWatch tool puts the chances of another 25-basis-point hike at the late-July meeting at just under 75%.
Movers And Shakers
While several Dow Jones stock outperformed Friday, the market served plenty of other bullish price gainers.
IRobot (IRBT) held a solid gain near midday after a U.K. regulator cleared Amazon.com's (AMZN) purchase of the consumer robot company for $1.7 billion.
Among more speculative stocks, Virgin Galactic (SPCE) backed off highs but still rose more than 10% after the company said its first commercial spaceflight will be in late June with a second to follow in August.
New issue Cava (CAVA) slumped 14% to just below 38 after debuting Thursday at 22. Shares of the Mediterranean fast-casual chain more than doubled in Thursday's IPO, closing at 43.78.
Inside the MarketSmith Growth 250, Vista Energy (VIST) added nearly 2% and is still in buy range from a 22.84 entry. Amid a lot of selling in the energy patch, VIST stock — which operates in Latin America — is a rare bright spot.
Meanwhile, two top performing stocks in the IBD Leaderboard model portfolio turned in mixed performances. DraftKings (DKNG) ceded an early gain after the company offered to buy the U.S. assets of Australian online sportsbook PointsBet for $195 million. The offer trumps an earlier $150 million bid by Fanatics.
In the security software group, Leaderboard stock Palo Alto Networks (PANW) edged higher after Wedbush raised PANW's price target to 290 from 225. Palo Alto Networks joined the Leaders list on May 24, when it soared above the 200 level.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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Source: Investor's Business Daily
