The Dow Jones Industrial Average rallied after new inflation data. You’re here (TSLA) rose slightly despite China’s reported fears of an Elon Musk project. meme stocks AMC Entertainment (CMA) and Bed bath and beyond (BBBY) were in return mode. waltz disney (SAY) appeared in the middle of a possible proxy fight.
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A number of promising stocks staged breakouts amid the encouraging action. Oil stocks Hesse (IT IS) and Valaris (VAL) exceeded buy points, with Illinois Tool Factory (ITW) also tests an input.
The yield on the benchmark 10-year Treasury fell 13 basis points to 3.43%. West Texas Intermediate crude rose 1.1% to just over $78 a barrel.
Stocks Whipsaw After Inflation Data, Jobs Update
While the consumer price index fell faster than expected in December, core inflation – which excludes food and energy – only slowed as expected. Stubborn services inflation continued to be a pet peeve.
Oanda’s senior market analyst Edward Moya said the inflation data gave Wall Street more confidence in a further drop in tightening by the Fed. He said “disinflation trends are clearly intact” with cheaper energy costs as a highlight.
“Inflation is not falling overall, but it is slowing as the economy begins to feel the impact of past Fed rate hikes,” he said in a note to clients.
Meanwhile, the Labor Department’s initial unemployment claims rose to 205,000 against. 204,000 the previous week, below expectations for a rise to 215,000.
As the market enters earnings season, investors would be wise to limit their exposure to the market and only take positions in the best stocks making good breakouts.
Nasdaq gains in small caps Excel
The Nasdaq managed to emerge from the red to close the session up 0.6%. Free market (MELI) did well here, up 9.3%.
The S&P 500 lagged relatively, but still rose 0.3% after paring its gains. Royal Caribbean Cruises (RLC) was among the winners with a 5.5% increase.
The S&P 500 sectors were mostly positive. Energy and real estate are doing the best, while healthcare and consumer staples are lagging behind.
Small caps were the best performers, with the Russell 2000 up 1.6%.
Growth stocks also rose, with the Innovator IBD 50 ETF (FFTY) up 0.5%.
Dow Jones Today: Disney Stock Leads Amid Proxy Challenge
The Dow Jones Industrial Average impressed the rally out of negative territory to end the day up 0.6%.
Walt Disney was the top performer in the Dow Jones today rising 3.6%. The entertainment giant has announced that Nike (NKE) President Mark Parker will become its new President.
The House of Mouse also faces a potential proxy battle as Nelson Peltz pushes Trian for a seat on the board. Disney is resisting the move.
Peltz told CNBC that Disney “went astray”, causing a “rapid deterioration in its financial performance”. He said the company’s takeover of Fox had turned what had been “a pristine balance sheet into a mess.”
Boeing (BA) and caterpillar (CAT) were among the other Dow performers. Coca Cola (KO) lagged behind, falling 1.3%.
Tesla stock gains despite China report
Tesla has made a strong comeback over the past five sessions and rallied on Red Thursday. It ended the session up 0.3%.
He had come under pressure soon after Bloomberg reported plans to expand capacity at its Shanghai plant could be put on hold.
The Chinese government is said to be worried about the implications of the internet-from-space project, Starlink. Tesla CEO Elon Musk also heads SpaceX, which operates the system. Musk is also featured as SpaceX’s chief engineer.
Tesla launched the third phase of expansion of its Chinese factory in the middle of the year. It would double its production capacity to around 2 million cars per year.
This isn’t the first time an Elon Musk project has affected Tesla stock. His takeover of Twitter has raised concerns that he could be distracted from the electric vehicle giant.
Tesla stock remains anchored below its major moving averages despite rallying more than 20% in the past five sessions.
AMC stock lags APE, BBBY stock soars
Meme stocks are in comeback mode after the bankruptcy of Bed Bath & Beyond.
AMC, historically one of the strongest meme stocks, rose 2%. It is now up 26.1% over the last five sessions.
But it was AMC Preferred Equity (APE) shares that were among the best performers in the stock market today. They jumped 9.9%.
Bed Bath & Beyond left both in the dust, however, as it soared 50%. It is now up a staggering 261% over the past five sessions.
Nonetheless, BBBY stock remains down 83% from the 30-year high reached on August 1. 17.
Last week, the company warned investors that it could be considering filing for bankruptcy, making the stock an extremely risky proposition.
American Airlines Guidance Raises Airline Stocks
Airline stocks got a boost after American airlines (AAL) lifted its guidelines. The carrier increased its adjusted EPS range from $1.12 to $1.17, from 50 cents to 70 cents.
American Airlines stock soared 9.7% after the news, adding room above its 200-day moving average in the process.
Another airline plays in sympathy. Delta Airlines (DAL) climbed 3.7%, South West Airlines (love) jumped 2.8%, and United Airlines (LAU) jumped 7.5%.
Alaska Air (ALK) closed with a gain of 3.5%. Spirit Airlines (TO SAFEGUARD) increased by 3.3%.
That was good news for the space, which has been hit with delayed or canceled flights due to issues with a pilot alert system.
Futures fall after S&P 500 hits resistance
Outside of Dow Jones: Oil Stock Test Entries
With the market strengthening, now is a good time to explore workouts.
International oil exploration play Hess is in a buy zone after breaking out of a flat base with a buy point of 149.93, according to MarketSmith analysis.
The overall performance is outstanding, which is reflected in its IBD composite rating of 99.
Oil and gas drilling stock Valaris is facing action after rising above a consolidation pattern entry of 70.27. The relative strength line hit a new high as it staged the move, an encouraging sign.
Illinois Tool Works pulled out a huge mug base with handle. The ideal entry point here is 231.79.
The company, which makes products such as bindings and technical components, is reporting rising profits. EPS jumped 30% in the last quarter.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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