Dow Jones falls on inflation data; Tesla shares hit new low amid Elon Musk comments

The Dow Jones Industrial Average fell on Friday after the early release of November’s data on personal consumption expenditures, an inflation gauge closely watched by the Federal Reserve. Tesla stock turned lower to hit a new low after CEO Elon Musk said he would not sell any more Tesla shares for at least 18 to 24 months.

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Early on Friday, key inflation data arrived in the form of the personal consumption expenditure price index for November. The PCE price index came in cooler than expected, rising 0.1% in November vs. Econoday’s forecast for 0.2% growth vs. October.

Year over year, the PCE price index rose 5.5%, in line with estimates. Personal income rose 0.4% in November, higher than forecast.

Meanwhile, the core PCE price index came in hotter than expected, rising 4.7% year over year vs. the estimate of 4.6%.

Electric vehicle giant Tesla ( TSLA ) skidded more than 3% Friday after Musk’s comments. Dow Jones Technology Leaders apple (AAPL) and Microsoft (MSFT) traded lower after today’s market opening.

Medpace (MEDP), IBD Leaderboard stock Neurocrine Life Sciences (NBIX), 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 and Medpace were recent IBD Stock Of The Day companies.

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Dow Jones today: Oil prices, Treasury yields

After Friday’s opening bell and heading into a three-day weekend, the Dow Jones Industrial Average was down 0.2%, while the S&P 500 fell 0.3%. The tech-heavy Nasdaq composite lost 0.7% in morning action. The bond market closes early Friday at 2 p.m. ET.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 0.7% and the SPDR S&P 500 ETF ( SPY ) fell 0.4% early Friday.

The 10-year Treasury yield ticked up 3.72% on Friday morning, with the 10-year yield on pace to add to its already strong weekly gain. Meanwhile, US oil prices traded up around 2% on Friday, as West Texas Intermediate futures rose above $79 a barrel in morning trade.

Stock market rally under pressure

On Thursday, the Dow Jones Industrial Average fell 1.05% and the S&P 500 fell 1.45%. The Nasdaq dumped 2.2% while the small-cap Russell 2000 lost 1.3%.

Thursday’s The Big Picture column commented, “IBD’s stock market outlook remains at ‘uptrend under pressure’ after heavy losses in recent sessions. That means investors should maintain cautious and defensive stances, with an already reduced market exposure. IBD readers should avoid most breakouts, unless they occur in stocks with first-rate fundamentals and technicals.”

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 0.4 percent on Friday.

Dow Jones member Caterpillar broke out past a 239.95 buy point in a flat base this week, according to IBD MarketSmith pattern recognition, but is back below the entry after Thursday’s slide. Bullishly, the stock’s relative strength line, an important technical indicator, is at new heights. CAT shares rose 0.5% on Friday.

CAT stock scores a strong 98 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.

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. HD shares were down 0.6% on Friday morning.

4 top growth stocks to watch right nowra stock market rally

Top stocks to watch: Medpace, Neurocrine, O’Reilly, Texas Roadhouse

Medpace bounced sharply from its 50-day line this week, rising for a third straight day on Thursday. For now, the correct buy point is 235.82, but an earlier entry of 220.09 is also in play. The MEDP share fell 0.3 percent on Friday.

IBD Leaderboard stock Neurocrine rose for a fifth straight session Thursday, gaining 1.7% and continuing to rebound from support at its 50-day level. A strong pullback is bullish for the stock’s immediate outlook, and the stock is likely forming the right side of a new base. The NBIX share rose 0.3 percent on Friday.

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. The ORLY share fell 0.1 percent on Friday.

Texas Roadhouse shows a new buy point at 101.85 in a flat base, but is now consolidating below its 50-day line. The IBD Leaderboard stock will try to recover the key benchmark in the coming days, and Thursday’s upside was a promising start. TXRH stock was trading slightly higher on Friday morning.

Stocks to watch

These are five top stocks to watch in today’s stock market, including three Dow Jones leaders.

Source: IBD data as of December 22, 2022

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

Tesla shares hit new low on Elon Musk comments

Tesla shares plunged 8.9% on Thursday, extending a losing streak to five sessions and hitting another 52-week low. Shares reversed from early gains to fall more than 3% on Friday, hitting a new low of 121.02. Late Thursday, Musk pledged not to sell any more Tesla shares for at least 18 to 24 months.

“You absolutely have my commitment that I will not sell shares until, I don’t know, probably two years. Definitely not next year under any circumstances and probably not the year after that,” Musk commented on a Twitter Spaces call. Musk also said that a decision to buy back the company’s stock could be affected by the severity of any economic downturn.

“The board is very open to doing a buyback,” Musk said. He added, “It wouldn’t be smart to do a buyback and then find that the recession is worse than 2009.”

Meanwhile, Wedbush cut its price target on the electric car giant, lowering its target from 250 to 175 due to “cracking in demand”. The brokerage maintained its outperform rating on the stock. The lowered price target is almost 40% above Tesla’s closing price on Thursday.

Canaccord also lowered its price target, to 275 from 304, and maintained a buy rating on the stock.

On Thursday, TSLA stock hit a new 52-week low, trading as low as 122.26. Shares closed about 69% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares sold off 2.4% Thursday, closing just shy of a 52-week low set on June 16 at 129.04. The stock is about 28% lower than its 52-week high. The shares fell 1.5 percent on Friday.

Microsoft shares fell 2.55% on Thursday, ending a two-day winning streak but holding above the 50-day mark. The software giant is still about 30% off its 52-week high. MSFT shares were down 1.2% early Friday.

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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