The Dow Jones Industrial Average rose as stocks rebounded with encouraging inflation data. Tesla (TSLA) rose even when CEO Elon Musk issued a warning about high-octane growth stocks. Apple (AAPL) went up more and Microsoft (MSFT) was another winner.
Meanwhile, a trio of stocks tested buying points amid positive action – Eli Lilly (LLY), Cabot (CBT) and Diamondback Energy (FANG) rating stocks.
X
The volume was mixed, rising on the Nasdaq but falling on the New York Stock Exchange compared to Thursday at the same time.
The yield on the 10-year Treasury benchmark fell 2 basis points to 2.74%. West Texas Intermediate crude rose again and was trading at around $ 115 a barrel.
Positive inflation data helped stocks end the week at highs. Basic personal consumption spending, the Federal Reserve’s preferred inflation indicator, rose 4.9% in April, slower than the 5.2% rise in March. This raises the hope that price increases may slow down.
Nasdaq leads as small capital letters impress
The Nasdaq was leading the way as it benefited from a rebound in technology stocks. It gained about 2.5%. The cybersecurity game Zscaler (ZS) was one of the best results, as it increased by 12% more.
The S&P 500 was also bright, rising nearly 2%. Ulta Beauty (ULTA) was the star here, with 10%, as it recorded brilliant gains and gave a better orientation than expected.
US stock market overview
Index Symbol Dow Jones Price / Loss Rate Change (0DJIA) 33011.64 + 374.45 +1.15 S&P 500 (0S & P5) 4131.64 +73.80 +1.82 Nasdaq (0NDQC) 12040.79 +30.70 +1.15 Russell (0.280.75) FFTY) 32.52 +0.59 +1.85 Last updated: 13:14 ET 27/05/2022
All S&P sectors were rising. Technology and real estate were making the best profits. Consumer commodity defense areas were rising from behind.
Small-cap investors flexed as they gave a bloody nose to the bears, with the Russell 2000 around 2%.
Growing stocks also participated in the recovery. The Innovator IBD 50 ETF (FFTY), a benchmark for growth stocks, rose more than 1.8%.
Dow Jones Today: Apple Stock, Microsoft Excel
The Dow Jones Industrial Average was the weakest of the major indices, but still gained more than 300 points. It increased by more than 1%.
Apple shares were helping to raise the blue-chip index. The iPhone giant was the best performer, as it rose more than 3%.
AAPL shares remain below their main moving averages, but are close to regaining the 21-day line, according to MarketSmith.
Microsoft was another notable performer. The software giant has risen more than 2% as Big Tech shares try to recover from recent lows.
MSFT rose above the 21-day exponential moving average, which is encouraging. But the movement that reaches low volume is a defect.
Not all major technology names are driving the Dow Jones today. Aerospace giant Boeing (BA) rose nearly 3% and is on track to end the week with a gain of more than 8%.
Tesla jumps as Elon Musk warns about growth
Tesla shares are another favorite of investors in growth stocks who have returned to the ground with a bang.
But the stock of electric vehicles also showed impressive strength on Friday, rising nearly 6% in above-average volume.
However, it has miles to go before it can approach its current entry of the first stage consolidation pattern of 1,208.10, MarketSmith analysis shows.
Aggressive investors could watch the stock regain its 50-day moving average, but TSLA is also almost 18% below that level.
Tesla shares were advancing rapidly despite CEO Elon Musk warning of high-octane growth stocks.
“Companies that are inherently a negative cash flow (i.e., value destroyers) must die, so that they stop consuming resources,” Musk said in a tweet.
Some users protested that Tesla itself had generated a negative cash flow over a long period of time. However, inventories with valued losses in revenue have been hit in 2022.
Cathie Wood’s Ark Innovation ETF (ARKK) is down 54% year-over-year, although it gained nearly 5% on Friday.
He also predicted that “according to past experience” any possible recession could last “between 12 and 18 months”.
Outside the Dow Jones: 3 stock-proof buy points
As equities rebound, investors should remain cautious for the time being. Taking smaller pilot positions can be a good way to gain market exposure while keeping risk at a manageable level.
Eli Lilly has hit above his point of purchase from a flat base. The ideal entry here is 314.10.
Pharmaceutical stocks have returned above their moving averages and continue to offset the weakness of the overall market. Recently, Big Money has collected the shares, with its rating of accumulation and distribution reaching B.
Eli Lilly is currently a member of the prestigious list of best actions on the IBD Leaderboard.
Cabot can also be triggered after leaving a consolidation pattern. The point of purchase here is 74.97.
Overall performance is very strong, although its EPS score of 69 out of 99 is not ideal.
Diamondback Energy has also entered a buying zone after surpassing a 148.09 consolidation entry.
The oil and gas game has seen its relative strength reach new highs, a bullish sign. It is currently on the list of industry leaders, the strictest and most powerful screen in the IBD.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more information on growth stocks and analysis.
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