by Dow Jones futures extended losses Thursday morning after the Labor Department’s first jobless claims, along with another estimate for third-quarter GDP. Chip inventories came under some selling pressure after Micron Technology’s weak quarterly results. Investors will shift their focus to more inflation data on Friday, with the release of November’s personal consumption spending data.
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Both economic data on Thursday came out at 8:30 am ET. Initial jobless claims rose to 216,000, below estimates for an increase to 225,000 versus 211,000 in the prior week.
Meanwhile, the third estimate of Q3 GDP came in stronger than expected, showing growth of 3.2% versus the second estimate’s 2.9% growth level.
Micron Technology (MU) was down more than 3% on Thursday. The memory chip maker missed guidance for its fiscal first quarter on Wednesday due to a cyclical downturn. The chip industry leader also forecast much lower-than-analysts-expected results for the current quarter, sending chip stocks into large early losses.
AutoMax (KMX) fell 13% after management said inflation and rising interest rates led to “vehicle accessibility issues,” as the company fell far short of estimates on third quarter earnings.
Chinese stocks rallied sharply on Thursday morning, while Hong Kong’s Hang Seng index rose nearly 3% on pledges to fresh growth initiatives and some easing of international tensions. Alibaba (BABA) e JD. com (JD) were up about 2% each, while Pinduoduo (PDD) was also up 2%.
The electric vehicle giant Tesla (TSLA) fell 1% on Thursday. Energy giant Dow Jones Chevrons (CVX) was up 0.7% on Thursday morning as U.S. oil prices continue to rise. Dow Jones technology leaders Apple (AAPL) e Microsoft (MSFT) was trading lower ahead of the stock market open today.
IBD leaderboard stock Neurocrine biosciences (NBIX), KLA extension (KLAC), O’Reilly Auto Parts (ORLY) and Texas Roadhouse (TXRH) – as well as Dow Jones names Amgen (AMGN), caterpillar (CAT) e Home storage (HD) — are among the top stocks to consider for investor watchlists. Keep in mind that recent market weakness should keep investors on the defensive.
Neurocrine and United Rentals are shares on the IBD rankings. UnitedHealth was featured in last week’s Stocks Near A Buy Zone column. Caterpillar and United Rentals were recent IBD Stock Of The Day companies.
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Dow Jones today: oil prices, treasury yields
Before the opening bell on Thursday, Dow Jones futures were down 0.7% from fair value. S&P 500 futures fell 0.9%. The tech-heavy Nasdaq 100 futures fell 1.2% in the morning’s action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1% and SPDR S&P 500 ETF (SPY) fell 0.7% early Thursday.
The yield on 10-year Treasuries fell to 3.66% on Thursday morning, on the brink of a three-day winning streak.
Meanwhile, U.S. oil prices were up nearly 2% on Thursday, while West Texas Intermediate futures climbed to nearly $80 a barrel in morning trade.
Stock market rally under pressure
The stock market performed strongly on Wednesday, with the Dow Jones Industrial Average up 1.6%. The S&P 500 and the Nasdaq composite both rose 1.5%.
Wednesday’s The Big Picture column commented: “Meanwhile, the fresh rally attempt faces another test of inflation data on Friday. Before the stock market opens, the last few traders manning equity desks across the country ahead of the three-day Christmas break, they will closely observe the November Personal Consumption Expenditure data.
Now is an important time to read IBD’s The Big Picture column amid continued stock market volatility.
Five Dow Jones stocks to buy and watch now
Dow Jones Stocks to Watch: Amgen, Caterpillar, Home Depot
Pharmaceutical maker Amgen is building a new flatbed after a big advance in mid-November. But shares are below their 50-day line after steep losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to decisively resume its 50 days first. AMGN stock traded a fraction higher on Thursday.
Dow Jones member Caterpillar surpassed 239.95 buy points on a flat basis, according to IBD model MarketSmith’s accolade, during Wednesday’s 2.8% breakout move. Bullishly, the stock’s relative strength line, a key technical indicator, has reached a new high. CAT shares fell on Thursday.
CAT stock shows a strong 97 out of a perfect 99 IBD Composite Rating, according to IBD stock watch.
Home improvement retailer Home Depot is about 4% below the 329.77 basis buy point of a mug with handle after reversing last week’s breakout move. HD stock traded unchanged on Thursday morning.
4 growing stocks to watch in the current stock market rally
Top Stocks to Watch: KLA, Neurocrine, O’Reilly, Texas Roadhouse
Chip equipment leader KLA claimed its cup with a handle’s 392.60 entry during Wednesday’s 2.8% gain. KLA shares fell 1.6% before market on Thursday.
IBD chart stock Neurocrine rallied for the fourth consecutive session on Wednesday, gaining 1% and continuing to bounce off support at its 50-day level. A strong bounce is bullish for the stock’s immediate prospects and would likely lead to a new foundation being formed. NBIX stock added 1.6% on Thursday.
O’Reilly Auto Parts is also finding much-needed support at its 50-day line this week and remains squarely above a flat-based entry of 750.98. A big bounce off the 50-day line could lead to a later entry point, but the market’s uptrend is currently under pressure, which increases the risk of buying stocks. ORLY shares fell 1% on Thursday.
Texas Roadhouse shows a fresh buy point at 101.85, but is now consolidating below its 50 day line. The IBD Leaderboard stock will be looking to catch up on that key benchmark over the next few days. TXRH stock traded unchanged on Thursday morning.
Actions to watch
These are the top five stocks to watch in today’s stock market, including three leaders from the Dow Jones.
| Company Name | Symbol | Point of purchase correct | Basic Type |
|---|---|---|---|
| KLA extension | (KLAC) | 392.60 | Cup with handle |
| Texas Roadhouse | (TXRH) | 101.85 | Flat bottom |
| caterpillar | (CAT) | 239.95 | Flat bottom |
| Home storage | (HD) | 329.77 | Cup with handle |
| Amgen | (AMGN) | 296.77 | Flat bottom |
Source: IBD data as of 21 December 2022
Join IBD experts as they analyze the major stocks in the current stock market rally on IBD Live
Tesla shares
Tesla stock fell 0.2% on Wednesday, extending a four-session losing streak and hitting another 52-week low. Shares lost 1% Thursday morning,
TSLA stock hit a new 52-week low on Wednesday, trading as high as 135.89. Shares closed about 66% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares jumped 2.4% Wednesday, snapping a five-day losing streak. The stock remains close to the 52-week low set on June 16 at 129.04. The stock is about 26% off its 52-week high. Shares fell 0.4% on Thursday.
Microsoft rose 1.1% on Wednesday, climbing for a second straight day and moving further above the 50-day line. The software giant remains about 30% off its 52-week high. MSFT stock fell 0.3% early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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