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Dow Jones Today: Stock gains retreat, but indices are on track for a seventh weekly gain
By: Colin Ledley
Colin is a co-editor specializing in technology news and financial news. He has over three years of experience in editing, reviewing, and fact-checking content related to current financial events and politics. He holds a master’s degree in journalism from the New School and a bachelor’s degree in history and political science from McGill University.
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Updated on December 15, 2023
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Stocks were mixed in the middle of Friday, although all three major indices were poised to close higher for the seventh week in a row.
The Nasdaq rose about 0.2% on Friday afternoon, while both the S&P 500 and the Dow Jones Industrial Average remained mostly unchanged.
The markets were supported in the latter half of this week by the Federal Reserve’s expectations that interest rates may have peaked and that the central bank could cut rates three times next year. In September, officials were forecasting on average one rate hike and two cuts in 2024.
It’s Triple Witching Day – one of four Fridays a year when individual stock options, index options, and index futures all expire on the same day – meaning markets could see unusual volumes and volatility today as traders close out positions.
Stocks rose yesterday, with the Dow Jones hitting another record high after surpassing 37,000 for the first time on Wednesday.
Costco Stock Soars to Record High After Beating Quarterly Profit Expectations
Costco (COST) shares jumped over 4% to a record high in Friday trading after the company reported first-quarter financial results that exceeded analysts’ expectations, as consumers flocked to Costco stores for lower-priced groceries and other products.
The membership-based company reported net sales of $56.72 billion, up 6.1% from the same period last year and above analysts’ forecasts. Net income rose to $2.2 billion or $4.86 per share, compared to $1.87 billion or $4.20 per share last year, also exceeding expectations.
The gains came alongside an increase in membership numbers and a rise in grocery sales, as Costco reported selling more than 4 million pumpkin pies alone during the Thanksgiving holiday. The number of paid members in households rose 7.6% year-over-year, while membership fee revenue increased 8.2% to $1.08 billion.
Costco also announced a special cash dividend of $15 per share, to be paid on January 12.
With Friday’s gains, Costco shares have risen more than 45% year-to-date.
Midday Stock Movements
Shares of Steel Dynamics Inc. (STLD), a steel manufacturer, rose 6% after it forecasted fourth-quarter earnings between $2.60 and $2.64 per share, which was more than Wall Street expected.
First Solar (FSLR) shares rose 5% after Jefferies analysts began coverage of the stock with a buy rating, citing expectations for improved demand for solar panels as interest rates decline next year.
Costco Wholesale Corp. (COST) retail shares increased 4% after the quarterly earnings report surpassed Wall Street expectations.
Ameren Corp. (AEE) shares fell 4% after KeyBanc downgraded the company to sector weight from overweight, citing the negative effects of the Illinois Commerce Commission’s rejection of Ameren’s proposed natural gas delivery rate increase.
Shares fell
Elevance Health Inc. (ELV) shares rose over 2% after reports indicated that it was one of the companies in talks to make a bid for Cigna Group’s (CI) Medicare Advantage unit. Reports suggest that the unit could be sold for as much as $3 billion.
U.S. Business Activity Hits Five-Month High in December
U.S. business activity accelerated at the fastest pace in five months in December, according to preliminary data from S&P Global.
The S&P Global Flash U.S. Composite PMI rose to 51 in December, the highest level since July, from 50.7 the previous month. While this reading is considered modest historically, it signals ongoing economic expansion for the eleventh consecutive month.
The accelerated business activity was driven by the services sector, which benefited from increased advertising spending and improved financial conditions. Meanwhile, manufacturing activity declined modestly with lower new orders.
Both manufacturers and service providers were more optimistic in their expectations but continued to express concerns about weak demand recovery.
3 Chart Movements to Watch Today: Lucid, Foot Locker, QYLD ETF
Lucid Group
Shares of electric vehicle maker Lucid Group (LCID) rose 14.5% on Thursday after the company announced it had assembled nearly 800 vehicles at its factory in Saudi Arabia, which opened in September, according to Reuters.
The price movements on Thursday resumed the upward momentum, with the stock rising above the 50-day moving average on the highest daily trading volume since mid-July. It is important to monitor the 200-day moving average, which may act as a resistance level.
Foot Locker
Shares of sports footwear retailer Foot Locker (FL) jumped 10% yesterday after receiving an upgrade from investment bank Piper Sandler.
The price of Foot Locker’s stock appears to have formed an inverse head and shoulders pattern, which investors typically interpret as a market bottom. The stock indicated a bullish trend yesterday by closing above a flag formed around the 200-day moving average. Key areas on the chart to watch include upper resistance around $40 and the filling of two notable gaps that formed over the past month.
QYLD ETF
Although the Global X NASDAQ 100 Covered Call ETF (QYLD) did not see significant movement on the chart Thursday, it is worth watching in today’s triple witching session, which coincides with the annual index rebalancing.
The fund’s stock price has not gained momentum after breaking the upper trend line of a downward channel, but it remains comfortably above the pattern. Investors should monitor potential spikes related to the triple witching/rebalancing through the 200-day or 50-day moving averages, which may be short-lived and provide attractive entry opportunities.
Early Market Movements
Gains:
Shares of Chinese e-commerce giant JD.com (JD) rose 5% after the Chinese government offered over $100 billion in one-year loans to lenders as part of its ongoing efforts to stimulate the stagnant economy.
Shares of Costco Wholesale Corp. (COST) rose by about 3% after the company reported quarterly earnings for the first quarter that exceeded Wall Street’s expectations, with same-store sales continuing strong.
Shares of First Solar (FSLR), a solar technology company, rose 3% after Jefferies analysts initiated coverage of the stock with a buy rating, citing strong demand for solar panels and improved margins.
Losses:
Shares of…
Roku Inc.’s (ROKU) shares of streaming devices fell approximately 5% after MoffettNathanson analysts downgraded the stock to sell from neutral, citing an overvalued assessment.
Darden Restaurants Inc.’s (DRI) shares for the chain restaurant operator declined 3% after last quarter’s sales reached $2.727 billion, below Wall Street’s expectations.
Lennar Corp.’s (LEN) shares for the homebuilder dropped 2% despite fourth-quarter earnings surpassing Wall Street expectations. The quarter’s gross margins were 24.2%, lower than last year and below analysts’ forecasts.
Stock Futures Rise as Federal Reserve Continues Progress
Futures linked to the Dow Jones Industrial Average rose 0.2% in pre-market trading on Friday.
S&P 500 futures increased by 0.2%.
Nasdaq 100 futures climbed 0.3%.
Article Sources
Editors at Investopedia are required to use primary sources to support their work. These include white papers, government data, original reports, and interviews with industry experts. We also reference original research from other trusted publishers when appropriate. You can learn more about the standards we follow in producing accurate and unbiased content in our editorial policy.
Costco. “Costco Wholesale Company reports first-quarter fiscal year 2024 results and announces a special cash dividend of $15 per share.”
Costco. “First Quarter 2024 Earnings Call.”
S&P Global. “S&P Global Flash US Composite PMI®.”
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