Stocks Open Higher; CAD, Equipment Makers Set Quick Early Pace – Investor's Business Daily

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Stock rolled out a positive open Friday, with Caterpillar (CAT) leading the Dow, and Autodesk (ADSK), McKesson (MCK) and Deere (DE) setting the pace on the S&P 500.

The Nasdaq strode to an early lead, 0.4%, while the Dow Jones industrial average swung up 0.3% and the S&P 500 added 0.2%.

Deere, Caterpillar, Autodesk Up; Foot Locker, Campbell Dive

Autodesk rocketed 14% higher, topping the Nasdaq 100 and also taking an early lead among S&P 500 stocks.  The developer of computer-assisted design software received upgrades from RBC Capital and Bank of America following a solid first-quarter performance reported late Thursday. The stock is extended and taking out new highs above an 89.28 buy point in a flat base.

Also high among S&P 500 stocks, Deere bolted 7% higher at the open. The farm equipment maker reported a 37% rise in fiscal second-quarter earnings, blowing out estimates for an 8% gain. Revenue rose 2% in line with expectations, and management lifted its third-quarter revenue guidance above consensus views. Deere’s gain lifted shares 7% above a 112.28 flat base buy point.

Deere’s positive report helped send Caterpillar up 1.5%, to top the Dow industrials. Cat shares were in a buy zone, 2% above a 99.56 flat base buy point.

Drug distributor McKesson (MCK) sprung 8% higher. The San Francisco-based giant reported a fiscal fourth-quarter earnings beat, while full-year guidance was above consensus targets. The S&P 500 stock has traded in a narrow zone for six months, along the bottom of a 10-month consolidation.

Applied Materials (AMAT) swung more than 3% higher after reporting an across-the-board sales and earnings beat in its fiscal second-quarter report late Thursday. The stock is taking new highs, working on its fifth straight weekly advance since rebounding from support at its 10-week moving average in April.

IBD 50 stock Nvidia (NVDA) popped 3% after Bernstein initiated coverage on the stock with an outperform rating and a 165 price target. Nvidia shares are extended above a 121.02 buy point in a late-stage base.

Salesforce.com (CRM) tacked on 2% at the open. The cloud-based human resources management leader reported late Thursday a 16% earnings increase and a 25% revenue gain in its first quarter, both above analyst expectations.  Shares are trading near highs, after narrowly clearing an 18-month consolidation.

On the downside, Campbell Soup (CPB) cooled by 3% after its fiscal third-quarter earnings and sales missed analysts targets. The company cited rising supply chain costs, promotional spending and other factors.

Foot Locker (FL) dived 17% at the start of trade, after its first-quarter results were weaker than expected by analysts. The company pointed to late income tax returns for its lagging first-quarter performance.  The mood spilled over onto Nike (NKE), which dropped 1.4% — the worst early move on the Dow Jones industrial average.

Oil Tests $50 Ahead Of Data; European Stocks Rebound

Markets will have an eye on oil prices, which were trading higher with West Texas Intermediate up 1.2% in early action — trading near the $50 per barrel mark ahead of the Baker Hughes (BHI) weekly rig count report, due out at 1 p.m. ET.

James Bullard, President of the St. Louis Federal Reserve Bank, said in an early speech Friday that the Fed’s outlook for two more rate hikes this year may be too aggressive, given the recent economic data, and argued for a go-slow approach to future hikes. Bullard pointed to economic data that has been relatively weak since the Fed’s meeting in March, saying “U.S. inflation and inflation expectations have surprised to the downside in recent months. Labor market improvement has slowed.”

Overseas, markets in Europe stepped off healthy gains in afternoon trade as they recovered from a sharp sell-off Thursday. London’s FTSE 100 rose 0.3% and Paris’ CAC-40 rallied 0.4%. Frankfurt’s DAX posted a 0.2% gain.

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