Dow Jones Holds Steady Amid Encouraging Housing Data, Energy Sector Leads Gains
The Dow Jones Industrial Average remained stable on Friday, consolidating recent gains as positive housing data emerged. The index maintained a flat position at 1:30 p.m. ET. Meanwhile, the S&P 500 and Nasdaq experienced modest gains of 0.2% each during afternoon trades. Earlier in the day, both indexes had traded sideways. Lower volume was observed on the NYSE and Nasdaq compared to the same time on Thursday.
Notably, small caps had a successful day, with the Russell 2000 rising over 1%. Additionally, the Innovator IBD 50 ETF (FFTY) outperformed other investments with a 1.4% gain.
The energy sector led the gains among S&P sectors, fueled by a 4% increase in crude oil prices, which reached $76.03 per barrel. Chevron (CVX), a Dow Jones component, experienced the greatest increase in the index during afternoon trading. Other gainers included Caterpillar (CAT), American Express (AXP), and Walgreens (WBA). However, the tech and healthcare sectors declined.
In terms of earnings reports, Applied Materials (AMAT) faced a 5% decline after its Q4 earnings report. Although the company’s sales remained stagnant compared to the previous year, earnings per share rose by 4% to $2.12. Reuters reported that the company is currently under a federal criminal investigation related to its exports to China. Consequently, AMAT dragged down the Nasdaq 100.
Another tech giant, Google parent Alphabet (GOOGL), also contributed to the decline in the tech index. The release date for Alphabet’s conversational AI tool, Gemini, has been postponed, putting pressure on GOOGL stock. Additionally, the ruling on the company’s antitrust case remains uncertain.
On a positive note, Gap (GPS) experienced a significant surge of nearly 30%. Although Q3 sales and earnings declined compared to the previous year, gross margins improved by 390 basis points. The company expects fourth-quarter net sales to remain flat. Abercrombie & Fitch (ANF) rose sympathetically in response. Meanwhile, Ross Stores (ROST) saw an 8% increase in its stock value after a strong earnings report, with earnings per share rising by 33% to $1.33.
However, not all earnings reports were favorable. BJ’s Wholesale (BJ) fell further below its 50-day moving average, reporting a 0.3% increase in third-quarter comparable sales compared to the previous year. While total sales increased by 3%, earnings per share fell for the third consecutive quarter.
In the construction equipment sector, Atkor (ATKR) experienced a decline in stock value after its Q3 report, with sales and earnings declining for three consecutive quarters.
ChargePoint Holdings (CHPT), an EV battery network provider, plunged over 30% following preliminary third-quarter results that warned of lower-than-expected sales due to delays in vehicle and fleet deliveries.
In summary, the Dow Jones held steady on Friday amidst positive housing data, while the energy sector led gains. Although certain tech and healthcare components declined, small caps experienced a successful day. Earnings reports varied, with some companies, such as Gap and Ross Stores, posting strong results, while others, like BJ’s Wholesale, faced challenges. The construction equipment and EV battery network provider sectors also experienced mixed performances. Investors are closely monitoring these developments as they navigate the fluctuating stock market.