Stock Indexes Set for Weekly Gains Despite Historic Apple Sell-Off

A huge Friday surge has stocks eyeing a surprising weekly win

by Josh Selway

Published on Jan 4, 2019 at 12:43 PM
Updated on Jan 4, 2019 at 12:55 PM

Even with the New Year's holiday, there was plenty of action to take in on Wall Street for the first trading week of 2019. Most of the trading centered around the huge sell-off in Apple (AAPL) shares, after the iPhone maker lowered its current-quarter outlook due to weakness out of China, which only added to recent jitters about the health of the global economy. However, a huge rally on Friday following an impressive jobs report for December and Fed Chair Jerome Powell's comments about being patient with rate hikes has the Dow Jones Industrial Average (DJI) and its index peers, set for a weekly win.

Apple Hits New Lows; FAANG in Focus Again

AAPL stock hit an annual low on Thursday as several analysts adjusted their outlooks on the tech heavyweight. Per usual, a number of Apple suppliers traded in sync with the blue chip. But while brokerage firms cut their price targets on a number of these stocks, Wall Street remained steadfast in its belief of Lumentum stock. Meanwhile, the headwinds even spread to the retail space, notably in the selling of Best Buy (BBY) shares.

Besides Apple, the other FAANG stocks made headlines of their own. At the start of the week, Whole Foods expansion buzz had Amazon in focus, though the e-commerce giant later received a price-target cut, as did Facebook (FB). Netflix (NFLX), meanwhile, enjoyed upbeat attention from the success of "Bird Box" and was then added to Goldman Sachs' "conviction list."

2 Names In the M&A Spotlight

Elsewhere in tech, Intel (INTC) shares got a boost late in the week thanks to a major nod from BofA-Merrill Lynch, which also recommended this other Dow stock. Fellow blue chip Microsoft (MST) may also grab bulls' attention after its latest buy signal. Speaking of bulls, some in the options pits were apparently targeting a huge rebound for Square (SQ) stock, and buyout buzz had traders swarming Box shares -- much like this retailer.

In the healthcare space, analysts said to sell these two stocks, and others are growing bearish on Align Technology (ALGN). Medical device stock GMED also saw bearish attention, while it was a downbeat guidance that weighed on FLXN shares. On the other hand, an Alzheimer's study lifted another low-priced drug stock.

Best and Worst January Stocks

Looking ahead, the Fed should remain a top storyline next week when its December meeting minutes are released. Traders in the meantime can check out our lists of the best stocks for January and the entire first quarter. Of course, there are plenty of other stocks that should be avoided based on historical returns, especially with so many potential headwinds surrounding equities.

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