Market Insider

These are the 3 stocks to watch Friday


Three key Dow stocks — Caterpillar, General Electric and McDonald's — report earnings before the opening bell and could set the pace for Friday's trading.

"Those three will particularly provide a read on what's going on in terms of the rest of the world outside the U.S. and what affect the dollar is going to have on sales," said J.J. Kinahan, chief strategist at TD Ameritrade.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

They report the day after two other Dow stocks, Travelers and Verizon, helped drag the industrial average lower after disappointing earnings.

Trading could also be affected Friday by big misses in tech after the closing bell Thursday. Alphabet, parent of Google, tumbled more than 5 percent after missing both earnings and revenue targets. Microsoft, another Dow component, saw its stock sink more than 5 percent in afterhours trading after missing analysts' earnings estimates.

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The Dow closed down 113 at 17,982, and the S&P 500 fell to 2,091, off 10. Oil also closed lower, with West Texas Intermediate futures at $43.18 per barrel, a decline of 2.3 percent.

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"The S&P closed under 2,100, which really isn't that big a level technically but psychologically it is. We held 2,080. I don't think it's that big a deal. I think people forget what kind of run we've had over the last six weeks," said Kinahan. "What's weird is the fact we've seen people sell bonds at the same time as stocks...I think that's people just taking off some risk ahead of the Fed meeting."

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Besides the Dow stocks, earnings reports are expected from Daimler, Honeywell, American Airlines, AutoNation, Kimberly-Clark, SunTrust and Synchrony Financial. Markit manufacturing PMI is reported at 9:45 a.m. EDT.

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