Stocks Rebound As Apple, P&G And Disney Lead Dow Higher
Stocks jumped out of the starting gate Friday, as earnings news and analyst actions helped bolster a rebound from Thursday’s sharp decline.
PayPal (PYPL), Procter & Gamble (PG) and Skechers (SKX) knocked out hefy gains following quarterly reports. Apple (AAPL) (IBD) jumped after Wedbush initiated coverage with an outperform rating and a 310 price target. Dentsply Sirona (XRAY) powered higher on an upgrade from Goldman Sachs. Atlassian (TEAM) and eBay (EBAY) suffered deep early losses.
The Nasdaq Composite swung up 0.6%, with PayPal and Dentsply Sirona leading the Nasdaq 100. China-based names were also prominent, with NetEase (NTES) and Baidu (BIDU) near the top of the Nasdaq 100.
On the Dow, gains from Procter & Gamble easily outflanked DowDupont’s (DWDP) early declines to lift the index 0.3% in opening trade.
The S&P 500 also gained 0.3%. PayPal, Procter & Gamble and Dentsply led the index, while eBay fell furthest among S&P 500 stocks, after an analyst downgrade.
Stock Futures: Crafting A Bottom
The back-and-forth week sends the Dow into Friday’s session up 0.2% through Thursday, as the market aims to stop its three-week pullback. The Nasdaq was down 0.2% for the week, and the S&P 500 showed a 1.6% advance. The Nasdaq and S&P 500 are struggling to hold support at their 200-day moving averages. The Dow has held firmly above that line. The S&P 500 ended Thursday’s session precisely at that moving average. Froday’s early action hauled the Nasdaq back above the line of support.
All three indexes have remained above their Oct. 11 lows, which means the market remains on the lookout for a potential follow-through session.
Procter & Gamble, PayPal, Skechers Stake Early Leads
On the Dow, Procter & Gamble blasted ahead 6.6% as a 3% gain in fiscal first-quarter earnings and a 0.2% rise in revenue was enough to beat analyst forecasts. Full-year revenue and earnings guidance were to the high side of analyst projections. The gain lifted the stock to less than 1% below a September high, and back above its 10-week moving average.
PayPal spiked 10% as BTIG Research upgraded the stock to a buy and JPMorgan hoisted its price target after a solid third-quarter report late Thursday. BTIG Research also lifted eBay to a buy rating. Following suit, JPMorgan raised its price target on eBay to 103, from 98. The move sent shares back above their 40-week moving average.
Skechers rocketed 19.5% — despite reporting a mixed third-quarter performance. Revenue was weaker than expected, but strong fourth-quarter revenue and earnings guidance cheered investors. The gap up move hoisted shares back above their 10-week moving average, but left them below their 40-week line and still down 28% from an April high.
Analyst Action: Disney, Apple, Dentsply
Walt Disney (DIS) flashed up 1.3% after Barclays raised the stock to overweight, from equal weight, and marked up its price target to 130, from 105. Disney shares are trading just below a 118 buy point, after pulling back from a test of 10-week support. Investors are advised to not purchase stocks — even if they break out past buy points — while the market remains in a correction.
Apple buzzed 1.5% higher after a Wedbush report set a 310 price target and an outperform rating on the stock. The note said Wall Street fears about the stock largely were alleviated by rising average sales prices and rising gross margins heading into the 2019 product cycle. Apple shares have been consolidating since early September, and fighting to retake their 10-week moving average for most of this month.
Dental products supplier Dentsply Sirona nipped ahead 5.5%. Goldman Sachs upgraded the stock to buy from sell. Shares have been in a 22-month dive, closing on Thursday 50% below their December 2017 high.
Other Earnings: Intuitive, Cleveland Cliffs Reverse
Intuitive Surgical reversed its early gain and dipped 0.4%. The maker of DaVinci robotic surgical tools reported a 2% third-quarter earnings gain and a 14% revenue increase late Thursday. It also reported a 20% jump in procedures using its remote-controlled instruments. Shares are pulled back 10% from an early October high, and looking to retake support at their 10-week moving average.
Iron ore miner Cleveland Cliffs (CLF) opened 2% higher, then turned and dived 6%.Management sweetened a powerful third-quarter performance by announcing an annual dividend of 20 cents. A modest three-week pullback had left Cleveland Cliff shares testing support at their 10-week moving average. Friday’s move broke that support in heavy trade.
Interpublic Group (IPG) sailed 6% higher after reporting strong third-quarter results and receiving a price-target hike from Citigroup.
Home Sales, Rig Count Data Due
Two key data points are due out Friday. September existing home sales numbers from the National Association of Realtors are scheduled for release at 10 a.m. ET. Baker Hughes (BHGE) weekly rig count survey lands at 1 p.m. ET.
Atlanta Federal Reserve Bank President Raphael Bostic joins a panel discussion in Macon, Ga. at 12 p.m. ET, and Robert Kaplan, president of the Federal Reserve Bank of Dallas, participates in a Q&A session at New York’s Princeton Club at 12:45 p.m. ET.
Oil prices gained, with West Texas Intermediate rising 1.1% to $ 69.37 per barrel. That was down more than 3% in a second straight weekly decline from an Oct. 3 peak. Gold rose 0.3% to $ 1,229.88 an ounce. Bonds remained effectively flat, with the 10-year yield steady at 3.18%.
Shanghai Stocks Jump, China GDP Growth Slows
China’s markets gained, with the Shanghai Composite recovering from early losses to post a powerful 2.6% rebound, despite slightly weaker-than-expected GDP growth data for the third quarter. Official China GDP numbers reported 6.5% growth for the quarter, below analyst views and the official target of a 6.6% gain. But uncertainty over the official numbers had some analysts calling for much lower readings.
The Shanghai Composite ended the week down 2.1%, digging deeper into bear market territory and marking its lowest weekly close since November 2014. Hong Kong’s Hang Seng Index added 0.4% Friday, taking a 0.9% loss for the week.
The optimism did not ripple through to Japan, where Tokyo’s Nikkei 225 slipped 0.6% to end the week down 0.7%. The benchmark ended the week 7.8% below its Oct. 2 high, and riding support above its 200-day moving average.
Trade remained mixed in Europe, where London’s FTSE 100 was up 0.4% in afternoon action, while Frankfurt’s DAX fell 0.2% and the CAC-40 in Paris dived 0.7%.
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