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Dow Jones Falls As Yellen Issues Warning, Inflation Cools; Tesla Rises Ahead Of Q3 Deliveries

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The Dow Jones Industrial Average gave up its early gains and was down 0.4% at 1:30 p.m. ET Friday. House Speaker Kevin McCarthy was reported to be seeking a short-term spending bill amid mounting challenges as a possible government shutdown looms. Late Thursday, the speaker was said to have won votes for three bills but lost one.

In her prepared remarks for Congress, Treasury Secretary Janet Yellen issued a warning that a shutdown will affect several government functions.




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The S&P 500 reversed and was lower by 0.2% in early afternoon trading in the stock market today. The Nasdaq gave up the bulk of its gains but traded 0.2% higher.

Volume was lower on the NYSE and higher on the Nasdaq compared with the same time on Thursday.

Small caps outperformed. The Russell 2000 rose 0.6%, while the Innovator IBD 50 ETF (FFTY) gave back its gains, falling 0.1%.

Inflation was tame. The personal consumption expenditures, or PCE, price index — the Fed’s preferred gauge of inflation — rose 0.4% in August. That’s up from July’s 0.2% gain and below the consensus estimate of 0.5%. On an annual basis, the PCE index rose 3.5% after rising 3.3% in July. Wall Street expected a 3.5% rise, according to Econoday.

Excluding the more volatile food and energy prices, the core PCE index, which the Federal Reserve focuses on as its main inflation gauge, rose 0.1% and cooled off from July’s 0.2%. Core PCE on an annual basis was lower at 3.9% vs. 4.3% in July. That brings inflation closer to the Fed’s target of 2%. On Thursday, the second-quarter GDP reading of 2.1% was lower than consensus views of 2.3%.

The University of Michigan’s consumer sentiment index for September rose to 68.1 against views of 67.7 and after August’s 67.7.

The yield on the benchmark 10-year Treasury note fell 3 basis points to 4.56%.

Crude oil fell nearly 1% to $90.90 a barrel.

Dow Jones Stocks

Shares of Nike (NKE) gave up some early gains Friday after Q1 results arrived late Thursday. Shares were up 7% at the hour and below the 50-day line.

Revenues for the Beaverton, Ore.-based athletic apparel maker came in at $12.9 billion, 2% higher than the prior year’s quarter. Earnings of 94 cents per share rose by 1 cent. Shares have been in a downtrend since May and have yet to retake the 50-day moving average.

Tech leaders in the Dow also rose. Intel (INTC) is rebounding back above its 50-day line, but is below the 37.19 buy point from a breakout earlier this month.

Stocks Moving Today

Carnival (CCL) reversed early gains and plunged after third-quarter results came out. Earnings of 86 cents per share showed a profitable quarter after a year-ago loss, while sales of $6.85 billion hit an all-time high. But the cruise operator’s dim outlook for the current quarter pressured the stock.

Analysts predict lower deliveries for Tesla (TSLA) due to plant shutdowns to prepare for new launches, such as the updated Model 3 and Cybertruck, plus lower inventory after price cuts.

The EV maker’s stock rose 1% ahead of Q3 deliveries data due Monday. Tesla had a record second quarter, when it delivered 466,140 vehicles. Analysts now expect 462,000 vehicles in the third quarter, according to FactSet. TSLA stock is in a handle with a buy point of 278.98.

Corcept Therapeutics (CORT), which makes therapies for disorders associated with steroid hormones such as cortisol, plunged and sliced through its 50-day line. The fall triggered the 7% sell rule as shares fell below a cup-base buy point of 30.14. According to reports, a patent trial with Teva Pharmaceuticals (TEVA) could result in a setback for Corcept.

IBD 50 Stocks

In the IBD 50, Synopsys (SNPS) has cleared its 50-day line and is back near a proper buy point of 468.03.

Meta Platforms (META) is retaking its 50-day line. The stock is in a cup base with a buy point of 326.20, according to MarketSmith pattern recognition. But shares have also been trading tightly since early September and present an earlier entry at 312.87. The relative strength line is at a new high. Meta has had a spectacular 152% gain this year.

Modine (MOD), Thursday’s IBD Stock Of The Day, is eyeing a 49.60 entry after a 132% gain this year. MOD stock has been under accumulation by fund managers over the past five quarters, giving shares a strong Accumulation/Distribution Rating of A-.

Software stocks in the IBD 50 growth listAtlassian (TEAM), Zscaler (ZS) and CrowdStrike (CRWD) — also did well in the afternoon. ZS stock rebounded from its 50-day line and is the newest addition to Leaderboard.

Duolingo (DUOL), the IBD IPO Stock Of The Week, pulled back into a buy zone from a 162.20 buy point after strong early action.

In mining, Rio Tinto (RIO) rose on news of a collaboration with Fortune Minerals to develop tools for improving yields in cobalt and bismuth recovery.

Among restaurants, Chili’s and Maggiano’s parent Brinker International (EAT) got an upgrade from analysts at Stifel to buy from hold with a price target of 45, up from 38. Shares gave up some gains as they approached the 50-day line.

In the food industry, Blue Apron (APRN) gapped up over 100% on news of its all-cash merger with Wonder Group for $13 a share, which values the company at $103 million.

McCormick (MKC), Cal-Maine (CALM), Conagra (CAG), Constellation Brands (STZ) and Lamb Weston (LW) report quarterly results next week. CALM stock is above its 50-day line.

Please follow VRamakrishnan on X/Twitter for more news on the stock market today.

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