Dow Jones falls as jobless claims jump; Pivotal Jobs Report On Deck

The Dow Jones Industrial Average fell Thursday morning after the Labor Department’s weekly jobless claims data. Meanwhile, the central payrolls report for September comes out Friday morning.

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Conagra (CAG), Constellation Brands (STZ) and McCormick (MKC) are key earnings reporters on Thursday. Conagra rose more than 2%, while Constellation fell 1% in morning trading. And McCormick shares rose more than 5% despite missing third-quarter earnings and sales targets.

Peloton Interactive ( PTON ) rose less than 1% after the company said it plans to cut about 500 jobs, or about 12% of its remaining workforce. Chief executive Barry McCarthy said the company has six months to prove it can survive on its own. Shares are more than 90% off their 52-week high.

Head of electric vehicles Tesla ( TSLA ) traded 0.5% higher Thursday, as Mizuho cut its price target on the stock from 391.67 to 370. Among Dow Jones industrials, tech titans apple (AAPL) and Microsoft (MSFT) was mixed after today’s stock market opening.

As the stock market continues to search for a bottom, Cummins (CMI), Murphy USA (MUSA), Neurocrine Life Sciences (NBIX), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) – as well as the Dow Jones stock UnitedHealth (UNH) — is among the best stocks to watch. Despite this week’s rally, the market’s status remains “in correction” and investors should remain on the defensive.

Vertex is a recent addition to the IBD Leaderboard. Cummins is an IBD SwingTrader stock. Murphy USA was featured in this week’s Stock Near A Buy Zone column, along with three other top stock ideas. World Wrestling was a stock of the day on Thursday. Neurokrine was a Stock of the Day on 26 September.

Dow Jones Today: Treasury Yields, Oil Prices, Jobless Claims

After Thursday’s opening bell, the Dow Jones Industrial Average fell 0.3%, while the S&P 500 fell 0.1%. The technology-heavy Nasdaq composite rose 0.2% in morning action.

Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) was up 0.2%, and the SPDR S&P 500 ETF ( SPY ) lost 0.1%.

The 10-year government yield ticked up to 3.77% on Thursday morning. The 10-year Treasury yield fell as low as 3.56% this week before rebounding. Last week, the 10-year government yield briefly topped 4%, which had not been done for more than ten years.

Meanwhile, U.S. oil prices gave up some of their recent gains, easing on Thursday, with West Texas Intermediate futures still holding above $87 a barrel. Last week, oil fell to its lowest level of the year – around $76 a barrel – before recovering. On Wednesday, OPEC+ agreed to cut production by up to 2 million barrels a day, the biggest cut since the start of the pandemic.

The Labor Department’s initial unemployment claims came out at 8:30 a.m. ET. Initial claims rose to 219,000, above estimates that called for a rise to 203,000 from 193,000 last week, according to Econoday.

Attempt at a stock market rally

On Wednesday, the Nasdaq trimmed its losses to just 0.3%, while the S&P 500, an early 1.8% loser, managed to reduce that decline to less than 0.2%. The Dow Jones Industrial Average, up a combined 5.5% during Monday and Tuesday’s sessions, was 0.1% lower.

Wednesday’s The Big Picture warned: “Of course, upcoming inflation data will get extra attention later this month. But in the short term, investors will now digest another steady stream of third-quarter results. This news will give fund managers more clues to how much higher inflation, and a clear slowdown in the US economy affects profits, perhaps the number one factor in stock prices.”

Monday’s market advance started another rally attempt, which was your day 1. The action on day 2 and day 3 is irrelevant as long as the index does not undercut its most recent low, from Friday. If the low is breached, however, the rally attempt has been made and the market continues to search for a bottom.

Then, on day 4 or later, investors should wait for a follow-up day. From Thursday (day 4), look for the Nasdaq or S&P 500 to rise sharply in higher volume than the previous session. A large enough increase in climbing volume marks a follow-up day. That will give investors the green light to start buying leading stocks that break out previous correct buy points.

Now, ahead of a potential follow-through day, is the perfect time to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market’s bottom signal. Missing that early opportunity can be a costly mistake.

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: UnitedHealth

Dow Jones stock UnitedHealth rose 0.75% on Wednesday, extending a winning streak to three sessions and closing just below the key 50-day mark. Shares are building a flat base that has a buy point at 553.23, according to IBD MarketSmith chart analysis. UNH shares fell 0.5% on Thursday morning.

UNH stock scores a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics. UnitedHealth reports its third quarter results on October 14.

4 top growth stocks to watch right nowrent stock market correction

Top stocks to watch: Cummins, Murphy USA, Neurocrine, Vertex, WWE

Cummins is moving up quickly on the right side of a cup base that has a buy point at 233.95. The stock retook its 50-day line this week on heavy volume, a positive sign. The company’s upcoming earnings results are on November 4. Cummins shares were up 0.3% Thursday morning.

Gas station and mini market leader Murphy USA is building a flat base with a buy point at 303.19. Shares fell more than 1% on Wednesday, continuing lower after Tuesday’s bearish reversal. The stock is finding strong resistance at its 50-day line. A decisive retracement of this level would be bullish for the stock’s base-building prospects. Earnings results for the third quarter will come on 26 October. Shares rose 0.1% on Thursday.

Neurocrine Biosciences is trying to break out past a flat base buy point at 109.36, according to IBD MarketSmith chart analysis. Shares briefly peaked on Tuesday, but are now about 1% below the buy trigger. The RS line hit a new high Friday, a bullish signal. Shares fell 0.1 percent early Thursday.

IBD Leaderboard stock Vertex Pharmaceuticals is fast approaching a flat base 306.05 buy point and above an early entry at 296.24. While the weak market status may keep you on the sidelines, the stock’s resilience makes it a good idea to watch. Its RS line is near new highs, a potential sign of big stock market results. VRTX shares fell nearly 1% Thursday, even as RBC raised its price target from 276 to 281.

World Wrestling Entertainment is trying to break out past a cup base of 75.33, but closed about 2% below the entry after Wednesday’s 0.5% decline. The RS line hit a new high this week. WWE stock was up 0.1% on Thursday.

Join IBD experts as they analyze leading stocks in the current stock market rally attempt on IBD Live

Tesla shares

Tesla shares slid 3.5% on Wednesday, closing at their lowest level since July 18. The stock rose 0.5% on Thursday morning. Mizuho analyst Vijay Rakesh lowered the company’s price target on Tesla shares from 391.67 to 370. In a research note, the analyst believes the September quarter for electric car makers was broadly in line as supply and logistics “remain a challenge.” The firm maintained a buy rating on Tesla stock.

Shares are about 40% off their 52-week high and sharply below the 50- and 200-day lines. The EV giant’s results for the third quarter are on 19 October.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple rose 0.2% on Wednesday, rising for the third day in a row. The stock is still about 20% off its 52-week high and below the 50- and 200-day lines. The result for the third quarter is on 27 October. Apple shares rose 0.1% Thursday morning.

Microsoft rallied on Wednesday, extending a winning streak to three sessions and continuing its retreat from last week’s 52-week low. The software giant is still about 30% off its 52-week high. Microsoft shares fell 0.2% 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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