Stock Market Today: Dow Jones Pares Losses Despite Hot PPI Data; Coinbase Jumps, Roku Slumps After Earnings

The major indexes showed modest losses in afternoon trading Friday. Coinbase stock and Roku went in opposite directions in the stock market today. Coinbase (COIN) surged after reporting an unexpected Q4 profit, while sellers hit Roku (ROKU) hard.

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COIN stock, up nearly 10% last week and up more than 30% so far this week, has been rallying with bitcoin. Bitcoin was up 1% Friday to near $52,300. Roku stock plunged more than 20% after the company reported a wider-than-expected loss along with lower average revenue per user, which dipped 4% to $39.92.

Sentiment turned negative in the stock market today after the latest reading on wholesale prices came in hotter than expected.

On a month-over-month basis, the producer price index rose 0.3%, higher than the 0.1% consensus forecast. Year over year, prices rose 0.9%, also above expectations for a 0.7% increase. Core prices jumped 0.5% month over month, well above the 0.1% consensus. Year over year, core prices rose 2%, also above the consensus estimate of 1.7%.

The new data follows weak retail sales data Thursday and hotter than expected consumer prices earlier in the week.

Stock Market Today

After the inflation data, the 10-year Treasury yield added 7 basis points to 4.31%.

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The Nasdaq composite trimmed losses and was down 0.4% at 1:30 p.m. ET, but several chip-equipment firms outperformed in the Nasdaq 100, helped by a strong earnings report from group bellwether Applied Materials (AMAT). Fiscal first-quarter results were well ahead of expectations, and guidance for the current quarter was also strong.

Other nice gainers in the group included Lam Research (LRCX)and KLA (KLAC).

Palo Alto Networks (PANW) also outperformed in the Nasdaq 100 ahead of next week’s earnings report.

Volume could be heavy in the stock market today due to options expiration. In afternoon trading, volume on the Nasdaq and the NYSE was lower compared to the same time Thursday.

Declining stocks outnumbered advancers on the Nasdaq and NYSE by less than 2-to-1.

The Dow Jones Industrial Average was mostly flat despite a drop of nearly 4% for Nike (NKE). Nike shares were downgraded by Oppenheimer to perform (hold) from outperform. The analyst also cut Nike’s price target to 110 from 150. Nike said it plans to slash more than 1,600 jobs to cut costs.

The S&P 500 was mostly unchanged and the Russell 2000 small-cap index fell 0.7% as both near the day’s best levels.

Eli Lilly (LLY) gained well in the S&P 500. Shares jumped 4% after Morgan Stanley maintained an overweight rating and lifted Lilly’s price target to 950 from 805.

Supermicro Reverses Lower

Buyers lifted Super Micro Computer (SMCI), commonly known as Supermicro, early in the session, but the stock reversed sharply lower. After climbing above the 1,000 level Thursday, SMCI stock gapped up for the third straight session and continued to show signs resembling a climax top. After hitting an intraday high of 1,077, SMCI stock was down 11.9% to around 885.

Nvidia (NVDA) rallied 1.8% after Oppenheimer increased NVDA’s price target to 850 from 650. Nvidia is set to report earnings Wednesday after the close. The company is expected to report its third straight quarter of triple-digit earnings and revenue growth. Loop Capital on Friday raised Nvidia’s price target to 1,200.

Inside the MarketSmith Growth 250, earnings winners included restaurant operator Texas Roadhouse (TXRH), which gapped up more than 9%, and insurer Kinsale Capital (KNSL), which is soaring after the earnings report.

But like most other stocks in the stock market today, both are well extended past proper entry points. Texas Roadhouse cleared an alternate entry of 124.02 on Jan. 29. Kinsale’s breakout was on Feb. 9.

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