Dow Jones Sharply Higher, Nasdaq Rises; Growth Stocks Lag Amid Rising Treasury Yield

The Dow Jones Industrial Average traded near its highs in late-afternoon trading of today’s stock market. Major indexes rose across the board for the second day in a row. Stocks were higher as the market returned to a confirmed uptrend on Thursday.


Bank Stocks In The Stock Market Today

About an hour before the close, the Nasdaq composite was up 0.5%. The Dow Jones rose 1.1%, leading on the upside. The S&P 500 rose almost 0.8% at around 3:15 p.m. ET, while the Russell 2000 gained around 0.2%. Early data showed volume was running higher on the Nasdaq and on the NYSE vs. the same time on Thursday.

Stocks climbed on Friday, with the Dow Jones outpacing the other indexes. Growth stocks and technology were likely hindered by a resurgence in bond yields. The 10-year Treasury yield rose 5 basis points to 1.57%, providing a headwind for the rally in growth names.

Early Friday, the Commerce Department released a report showing a rise in U.S. retail sales for September. The unexpected lift helped boost sentiment as consumer spending remains stronger than expected.

Meanwhile, third-quarter earnings season continued Friday after a handful of major banks reported earnings so far this week. On Friday, Dow Jones leader Goldman Sachs (GS) reported stronger-than-expected earnings.

Goldman Sachs’ Q3 results were well above analysts’ estimates. The company earned $14.93 a share on revenue of $13.62 billion, easily beating Wall Street targets for $9.99 EPS on sales of $11.7 billion. Investment banking revenue soared 88% to $3.7 billion and has been a strong segment of business for all the major banks this quarter.

Goldman Sachs stock reclaimed its 50-day line on Friday after rising over 3.4%. Shares continue to build a flat base with a 420.86 buy point and are about 4% away from the entry.

Other financial stocks in the Dow also outperformed, including American Express (AXP) and Visa (V), which rose more than 2.3% each. AmEx remains less than 1% away from a 178.90 buy point of a cup with handle. Shares are holding above the 50-day and 21-day lines. Meanwhile, Visa is still working on a 12-week flat base. Shares are trading 9% below a 252.77 buy point.

Transportation Stocks Break Out

The growth-focused Innovator IBD 50 ETF (FFTY) held above its 21-day and 50-day moving averages on Friday but traded near breakeven in afternoon trading. Stocks leading the upside in the index included Generac Holdings (GNRC) and ChampionX (CHX) which gained of over 5% and 4%, respectively.

Meanwhile, a handful of stocks in the MarketSmith Growth 250 scored breakouts, including transportation stock Saia (SAIA), which gained over 4%. Elsewhere, another transportation stock, Old Dominion Freight Line (ODFL), also broke out into a buy area.

Saia broke out from a 259.23 flat base’s buy point in light yet accelerating turnover, according to MarketSmith analysis. Shares remained inside the 5% buy area in afternoon trading. This stock’s RS line ticked up, a bullish sign. Meanwhile, the company holds a Relative Strength Rating of 87 and a strong Composite Rating of 96.

Meanwhile, Old Dominion Freight Line briefly rose above a 304.32 flat-base entry. The stock rose more than 2.8% but shares slid back below the buy point in afternoon trading. The stock’s RS line looks very strong and traded nears its highs alongside the breakout.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and stock market commentary.


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