The Dow Jones Industrial Average fell more than 325 points Thursday in the wake of initial jobless claims and a different estimate for third-quarter gross domestic product. Chip shares came under pressure after weak quarterly results from Micron Technology. And CarMax plunged when it reported that consumers are beginning to budge on car prices.
The Labor Department said Thursday that initial jobless claims rose to 216,000, below estimates for a rise to 225,000 from 211,000 last week. The Commerce Department also reported that another estimate for third-quarter GDP came in stronger than expected. This third estimate showed growth of 3.2% against the second estimate’s 2.9%.
On Friday, investors will shift their attention to more inflation data, with the release of November’s personal consumption expenditure figures.
Micron Technology (MU) fell more than 3% on Thursday. Late Wednesday, the memory chip maker missed estimates for its fiscal first quarter amid a cyclical downturn. The chip industry also forecast results for the current quarter that were well below analysts’ views, sending chip stocks into big early losses.
CarMax (KMX) was 8% lower, after management said inflation and rising interest rates led to “car affordability issues.” The company fell well short of profit estimates for the third quarter.
Chinese shares were strongly better than Thursday morning, as Hong Kong’s Hang Seng index rose nearly 3% on promises of new growth initiatives and some easing of international tensions. Ali Baba (BABA) rose almost 1%, while JD.com (JD) was unchanged. Pinduo duo (PDD) inches lower.
Electric vehicle giant Tesla ( TSLA ) fell more than 3% Thursday. Dow Jones energy giant Chevron ( CVX ) fell 0.6% Thursday morning, as U.S. oil prices continue to rise. Dow Jones Technology Leaders apple (AAPL) and Microsoft (MSFT) traded lower after today’s market opening.
IBD Leaderboard stock Neurocrine Life Sciences (NBIX), CLOTHES (KLAC), O’Reilly Auto Parts (ORLY) and Texas Roadhouse (TXRH) – as well as Dow Jones names Amgen (AMGN), larva (CAT) and Home Depot (HD) — is among the best stocks to consider for investor watchlists. Remember, the recent weakness in the market should keep investors on the defensive.
Neurocrine and Texas Roadhouse are IBD Leaderboard stocks. Caterpillar was a recent IBD Stock Of The Day company.
IBD’s latest newsletter MarketDiem brings you actionable ideas for stocks, options and crypto straight to your inbox
Dow Jones today: Oil prices, Treasury yields
After Thursday’s opening bell, the Dow Jones Industrial Average was down 1%, while the S&P 500 fell 1.3%. The technology-heavy Nasdaq composite lost 1.8% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 1.8% and the SPDR S&P 500 ETF ( SPY ) fell 1.3% early Thursday.
The 10-year Treasury yield ticked down to 3.67% on Thursday morning, snapping a three-day winning streak.
Meanwhile, US oil prices traded up nearly 2% on Thursday, as West Texas Intermediate futures rose to nearly $80 a barrel in morning trade.
Stock market rally under pressure
On Wednesday, the stock market showed a strong performance, with the Dow Jones Industrial Average rising 1.6%. The S&P 500 and Nasdaq composite both rose 1.5 percent.
Wednesday’s The Big Picture column commented: “Meanwhile, the new rally attempt faces another inflation data test on Friday. Before the stock market opens, the last traders manning equity desks across the country ahead of the three-day Christmas holiday will be looking closely at Figures for personal consumer spending in November.”
Now is an important time to read IBD’s The Big Picture column amid ongoing stock market volatility.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Amgen, Caterpillar, Home Depot
Drug producer Amgen is building a new flat base after a big advance into mid-November. But shares are below the 50-day mark after heavy losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to recover the 50 days first. The AMGN share fell 0.8 percent on Thursday.
Dow Jones member Caterpillar broke out past a 239.95 buy point in a flat base, according to IBD MarketSmith pattern recognition, during Wednesday’s 2.8% breakout move. Bullishly, the stock’s relative strength line, an important technical indicator, reached a new high. CAT shares lost 1.1% on Thursday.
CAT stock scores a strong 97 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup.
Home improvement retailer Home Depot is about 4% below a cup-with-handle base’s 329.77 buy point after reversing last week’s breakout move. The HD share fell 1.6 percent on Thursday morning.
4 top growth stocks to watch right nowra stock market rally
Top stocks to watch: KLA, Neurocrine, O’Reilly, Texas Roadhouse
Chip equipment leader KLA retook its cup-with-handle entry at 392.60 during Wednesday’s 2.8% advance. The KLA share fell 3.9 percent on Thursday.
IBD Leaderboard stock Neurocrine advanced for a fourth straight session on Wednesday, gaining 1% and continuing to rally past support at its 50-day level. A strong rally is bullish for the stock’s immediate outlook and is likely to lead to the formation of a new base. NBIX shares rose 0.4% on Thursday.
O’Reilly Auto Parts is also finding much-needed support at its 50-day line this week and remains just above a 750.98 flat-base entry. A big bounce off the 50-day line could provide a follow-on entry point, but the market rally is under pressure right now, increasing the risk of buying stocks. ORLY shares fell 1% on Thursday.
Texas Roadhouse is showing a new buy point at 101.85, but is now consolidating below its 50-day line. The IBD Leaderboard stock will try to recover the key benchmark in the coming days. TXRH stock was down 1.1% Thursday morning.
Stocks to watch
These are five top stocks to watch in today’s stock market, including three Dow Jones leaders.
|company name||Symbol||Right point of purchase||Type of base|
|CLOTHES||(CLICK)||392.60||Cup with handle|
|Texas Roadhouse||(TXRH)||101.85||Flat base|
|Home Depot||(HD)||329.77||Cup with handle|
Source: IBD data as of December 21, 2022
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares fell 0.2% on Wednesday, extending a losing streak to four sessions and hitting another 52-week low. Shares lost more than 3% Thursday morning, hitting a new 52-week low of 132.28.
On Wednesday, TSLA stock hit a new 52-week low, trading as low as 135.89. Shares closed about 66% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares rose 2.4% on Wednesday, snapping a five-day losing streak. The stock is holding close to its 52-week low, which was set on June 16 at 129.04. The stock is about 26% lower than its 52-week high. The shares fell 1.5 percent on Thursday.
Microsoft rose 1.1% on Wednesday, rising for a second day in a row and moving further above its 50-day line. The software giant is still about 30% off its 52-week high. MSFT shares were down 1.6% early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
YOU MAY ALSO LIKE:
Top Growth Stocks to Buy and Watch
Learn how to time the market with IBD’s ETF Market Strategy
Find the best long-term investments with long-term IBD managers
MarketSmith: Research, charts, data and coaching in one place
How to research growth stocks: Why this IBD tool simplifies the search for top stocks