Dow Jones Holds Above 34K But Indices Fade; Adobe Increases Bullish Earnings, AI Potential

The Dow Jones Industrial Averages traded near midday on Friday, along with other major stock indexes. Several Dow Jones stocks were in green, including boeing (BA), which fell from an early gain after recovering an entry at 221.33.


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 good winner in the stock market today, up about 2%. Late Thursday, the company reported earnings and revenue growth that accelerated from the prior quarter. Document cloud revenues increased 11%, with creative and digital media revenues up 9% and 10%, respectively.

Earlier this year, Adobe launched Firefly, a family of generative AI tools. Adobe was featured as an earnings options trade in last week’s earnings preview.

In business news, the University of Michigan’s preliminary consumer confidence survey showed consumer confidence improved to 63.9 in June. This was above estimates and up from May’s 59.2 reading. The poll’s inflation outlook has also declined.

Off the Dow Jones

The Nasdaq composite fell, with early leadership coming from names like Nvidia (TSLA) e Tesla (TSLA). NVDA hit another all-time high, helped by a positive note from Morgan Stanley, which maintained an overweight rating and raised NVDA’s price target to 500 from 450. Both stocks trimmed gains at midday.

The S&P 500 also fell modestly, supported by strength Western pharmaceuticals (WST), which is rapidly forming the right side of a shallow cup base. BofA Securities updated WST to buy from neutral with a price target of 405.

Several healthcare stocks outperformed the S&P 500, including McKesson (MCK), which has passed the 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 (KRE) ETF, which fell nearly 2%.

The Nasdaq and the S&P 500 made a powerful follow-through on March 29, putting the stock market back in a confirmed uptrend. But the Nasdaq 100 is quite overbought at this point, more than 11% above its 50-day moving average.

Volume was significantly higher than at the same time on Thursday. Today is a day of “quad witches” of options and futures contract expirations, typically causing heavy trading. The stock market will be closed on Monday for the June 19th holiday.

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The 10-year Treasury yield was off the highs but still added 3 basis points to 3.76% after Federal Reserve Chairman Jerome Powell’s aggressive tone on Wednesday. The Fed, as expected, left the federal funds rate unchanged in a range between 5% and 5.25%. The CME FedWatch tool puts the chances for another 25 basis point hike at its late July meeting at just under 75%.

Motors and agitators

While several Dow Jones stocks outperformed on Friday, the market serviced several more bullish price gains.

I Robot (IRBT) held on to a solid gain into midday after a UK regulator cleared bought the consumer robot company for $1.7 billion.

Among the more speculative stocks, Galactic Virgo (SPCE) backed off but still climbed more than 10% after the company said its first commercial spaceflight will be in late June, followed by a second in August.

New problem Quarry (CAVA) plunged 14% to just under 38 after debuting at 10pm on Thursday. Shares of the Mediterranean fast-casual chain more than doubled in Thursday’s IPO, closing at 43.78.

Within MarketSmith Growth 250, Energy view (VIST) added nearly 2% and is still in the buy range from a 22.84 entry. Among the many sales in the energy sector, VIST stock operating in Latin America is a rare bright spot.

Meanwhile, two top-performing stocks in the IBD Leaderboard model portfolio had mixed performances. DraftKings (DKNG) divested an initial gain after the company offered to buy the US business of Australian online sports betting PointsBet for $195 million. The offer surpasses a previous $150 million offer from Fanatics.

In the security software group, Stock leaderboard Palo Alto networks (PANW) moved higher after Wedbush raised PANW’s price target to 290 from 225. Palo Alto Networks joined the leaders list on May 24 when it surged above the 200 level.

Follow Ken Shreve on Twitter @IBD_KShreve for more analysis and insights into the stock market.


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