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S&P 500, Nasdaq Lead As This Tech Name Enters Profit-Taking Zone | Stock News & Stock Market Analysis

Stocks opened to narrow gains Friday, as the Federal Reserve reported a surge in February industrial activity, and Adobe Systems (ADBE), Micron Technology (MU) and Qualcomm (QCOM) chalked up early leads.

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The Dow Jones industrial average opened ahead 0.2%, but quicklky trimmed gains to less than 0.1%. The Nasdaq Composite and S&P 500 each rose 0.2%, as Apple (AAPL) dipped a fraction and three of the four FANG stocks managed early gains. Adobe led the Nasdaq 100 in early action, with Ulta Beauty (ULTA) and Micron Technologies (MU) close behind. Broadcom fell to the bottom of the list.

Early economic news disappointed, with housing starts slowing sharply in February to an annualized rate of 1.236 million, according to the Commerce Department. That was down nearly 7% from January’s pace, undercutting consensus expectations for a decline to a pace of 1.285 million starts.

Building permits, which give a view to upcoming activity, slipped 6% to a rate of 1.298 million during the month. Economist consensus had projected a 1.322 million rate.

Industrial production jumped 1.1% in February, according to the Federal Reserve, a big improvement over January’s 0.3% contraction and far above forecasts for a 0.4% increase. Capacity utilization also surged, to 78.1%, up from January’s 77.4% reading and clobbering consensus views for an increase to 77.7%.

At 10 a.m. ET, the Labor Department delivers its Job Openings and Labor Turnover Survey and the University of Michigan releases its Consumer Sentiment Index.

 

The Dow enters Friday’s session down 1.8% for the week, with its attempts to advance still petering out at its 50-day moving average. It’s a good example of how this technical indicator can become a level of concrete resistance.

The S&P 500 is down 1.4% and trading just even with its 50-day line. The Nasdaq is down 1.1% and back below the 7,500 mark, but not by much. IBD’s Big Picture feature on Thursday provided 5 critical elements to help monitor the health of the currently choppy market.

Intel Paces Dow; Adobe, Buckle, Micron Climb

More than half of the Dow’s 30 stocks moved higher at the starting bell. Chipmaker Intel (INTC) led with a 0.9% gain.

Adobe Systems powered up 4% after reporting late Thursday its fiscal first-quarter earnings rose 65% on a 24% rise in revenue. Both numbers were well above consensus targets. Second-quarter guidance was mixed, with earnings above, revenue below expectations. Friday’s early move put the IBD 50 stock more than 20% above a 186.37 buy point after an early January breakout, placing it in a profit-taking zone.

Chipmaking giant Broadcom swung less than 2% lower following fiscal first-quarter results delivered late Thursday. Revenue and earnings topped analyst targets during the quarter, but second-quarter guidance just met views and the company reported a fall in wireless chip sales. The premarket move does not suggest any real chart damage, as the stock hovers below a 274.36 buy point in a four-month double-bottom base.

Other chip stocks also showed mixed premarket action. Ambarella traded flat after trimming an early 6% surge. Qualcomm pared a 4% gain to less than 1%. Ambarella is climbing the right side of a cup base pattern, but its relative strength line — which you would like to see moving alongside or even slightly ahead of the stock’s climb — continues to lag.

Micron Technologies held its 2% advance in premarket trade. The stock is extended from a March 5 breakout, and moving quickly toward the 20% gain level that marks a profit-taking zone.

Retailer Buckle (BKE) and electronics maker Jabil Circuits (JBL) spiked 8% and 6%, respectively, after reporting quarterly results. On the early injured list, Overstock (OSTK) dived 14% after its fourth-quarter revenue stopped well short of expectations. Perry Ellis (PERY) and Tiffany & Co. (TIF) also declined after reporting, and were each down more than 4%.

Stocks Slip In China, Japan; Trend Higher In Europe

Stock markets across Asia lost ground in Friday’s session. Hong Kong’s Hang Seng dipped 0.1%, trimming its gain for the week to 1.6%. In Japan, Tokyo’s Nikkei 225 slumped 0.6% Friday and ended the week with a 0.9% gain.

Stocks in Europe were once again positive in afternoon trade, with the DAX in Frankfurt and CAC-40 in Paris tracking toward modest gains for the week, and London’s FTSE 100 trading slightly below last Friday’s close.

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