The Dow Jones Industrial Average fell more than 225 points Thursday morning after the Labor Department’s initial jobless claims. Meanwhile, Netflix ( NFLX ) earnings will come after the market close, kicking off tech earnings in the fourth quarter.
Initial jobless claims fell to 190,000 from 205,000 last week. Claims were expected to rise to 215,000, according to Econoday estimates.
Elsewhere on the economic front, housing starts and permits – along with the Philadelphia Fed Manufacturing Index – were released. Housing starts and permits for December fell to 1.382 million and 1.330 million, respectively, against expectations of 1.362 million and 1.380 million.
The Philly Fed index also came in at -8.9 in January, better than the expected -10.3 reading and higher compared to the -13.8 reading in December.
Alcoa (AA) and Discover financial services (DFS) reported earnings late Wednesday, while Fixing agent (FAST) and Procter & Gamble (PG) earnings came out before Thursday’s open.
Alcoa shares fell more than 3%, while Discover shares sold off more than 6%. Fastenal was up 1% after beating top and bottom line estimates. And P&G shares fell nearly 2% after earnings matched estimates and sales beat targets.
The stock market today
Charles Schwab ( SCHW ) fell nearly 5% after a rare double downgrade by Bank of America. Roblox (RBLX) skidded more than 7% after Morgan Stanley downgraded the stock from equal weight to underweight.
Head of electric vehicles Tesla ( TSLA ) fell nearly 1% Thursday. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) were both steadily lower after today’s market opening.
IBD Leaderboard stock Fluoride (FLR), latest IBD Stock Of The Day Medpace (MEDP), Monster Drink (MNST) and Vertex Pharmaceuticals (VRTX) – as well as Dow Jones names Amgen (AMGN), Chevron (CVX) and Walmart (WMT) — is among the best stocks to buy and watch as the market tests the strength of another rally.
Fluor and Medpace are IBD Leaderboard stocks.
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Dow Jones today: Oil prices, Treasury yields
After Thursday’s opening bell, the Dow Jones Industrial Average was down 0.7%, and the S&P 500 lost 0.75%. And the tech-heavy Nasdaq composite fell 1% too Nvidia (NVDA) led the declines.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 1% and the SPDR S&P 500 ETF ( SPY ) traded down 0.7% early Thursday.
The 10-year Treasury yield rose to 3.39% Thursday morning, recouping a small portion of Wednesday’s drop to 3.37%.
Oil prices rose on Thursday, taking West Texas Intermediate futures back above $80 a barrel. On Wednesday, WTI futures ended an eight-day rally, reversing after reaching their highest level since early December.
Stock market rally
On Wednesday, the Dow Jones Industrial Average shed 1.8%, and the S&P 500 lost 1.6%. The Nasdaq Composite fell 1.2%, snapping a seven-day winning streak.
Wednesday’s The Big Picture column warned: “On a practical level, it’s time to throttle back on stocks. Exposure should remain 20% to 40%, although much depends on the success of breakouts. While dozens of quality stocks have emerged from bases, MarketSmith’s list of recent breakouts shows fewer than 10 still up more than 5% from buy points.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: Amgen, Chevron, Walmart
Pharmaceutical giant Amgen is forming a flat base that has a buy point of 296.77, according to IBD MarketSmith pattern recognition. First, Amgen shares need to retrace the 50-day line, which is an important resistance level to watch. AMGN shares fell 1% early Thursday.
Energy giant Chevron fell back below its 50-day line during Wednesday’s 1.8% drop, as it remains below a flat-base buy point of 189.78. Chevron’s results for the fourth quarter are due on January 27. CVX shares lost 0.4%, despite the rise in oil prices.
CVX stock scores a solid 93 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Discount retailer Walmart fell further below its 50-day line after Wednesday’s 2.5% loss. The shares are building a cup-with-handle base that has a buy point at 154.74. Walmart shares rose 0.2 percent Thursday morning.
4 top growth stocks to buy and watch Stock market rally
Top stocks to buy and watch: Fluor, Medpace
IBD Leaderboard stock Fluor is trying to break out past a flat-base buy point at 36.16, but shares gave up the buy point during Tuesday’s 3.4% drop. If stocks retrace this entry, the 5% buy area tops out at 37.97. FLR stock fell 0.65% early Thursday.
Back story: Fluor manages large infrastructure projects within the oil and gas, chemical, mining and transport industries. This is an earnings reversal game. A poor EPS rating reflects net losses in 2019 and 2020 and an expected fall in earnings in 2022 to 86 cents per share. However, analysts see earnings rising 95% next year to $1.68 per share.
Medpace rallied on Wednesday, approaching a consolidation buy point at 235.82. Last week the shares rose above an early entry of 220.09. The company’s result is expected on 13 February. Medpace shares fell 0.6% early Thursday.
Back story: Medpace is a clinical contract resource organization, or CRO. It helps drug manufacturers carry out the clinical studies needed to gain approval for new drugs. In the third quarter, the company gave a positive outlook for 2023, which calls for 18% sales growth in the middle of guidance.
Monster, Vertex Trace Flat Bases
Monster Beverage is struggling for support around its 50-day line amid Wednesday’s 1.4% decline. Shares are tracking a flat base with a buy point at 104.75. The MNST share fell 0.3 percent on Thursday.
Back story: Monster Beverage leads an energy drink duopoly with privately held competitor Red Bull. The company’s portfolio of energy drink brands includes Monster Energy, Reign and NOS Energy.
Monster dominates energy drinks in the US, taking a 39% market share last year, according to Jefferies data, resulting in a record $5.5 billion in revenue for the company. Red Bull accounted for 37% of the US energy drink market in 2021. Rising challenger Celsius (CELH), which is on an impressive growth streak, took 4.9% of the market.
Wednesday’s IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after retracing its 50-day line this week. VRTX stock fell 0.8% on Thursday.
Back story: The company is known for its treatments for cystic fibrosis – a market that Vertex estimates has 88,000 patients. Of these, there are still 20,000 patients who can receive the old-school oral treatments. But analysts are looking for what’s new from Vertex, including an updated three-drug regimen that could strengthen Vertex’s position against rivals AbbVie (ABBV).
Shares to buy and watch in a stock market rally
These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
|company name||Symbol||Right point of purchase||Type of base|
|Walmart||(WMT)||154.74||Cup with handle|
Source: IBD data as of 19 January 2023
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Tesla shares slid 2.1% on Wednesday, giving up part of Tuesday’s 7.4% gain. Despite their recent rally, shares remain well below the 50- and 200-day levels. In early January, the stock hit a 52-week low of 101.81. Tesla stock closed Wednesday about 66% off its 52-week high. The Tesla earnings are due on January 25.
Shares in the EV giant appeared to be bouncing back from Wednesday’s losses, but were down around 1% on Thursday morning.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple fell 0.5% on Wednesday, closing at its highest level since Dec. 15. The stock is still around 24% lower than its 52-week high. Apple will report its quarterly results on February 2. AAPL stock was down 0.7% on Thursday.
Microsoft shares fell 1.9% on Wednesday, snapping a seven-day winning streak. The software giant is about 25% off its 52-week high. The MSFT earnings are due on January 24. The shares traded 1.3% lower early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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