Dow Jones rally on December jobs report; Tesla shares plunge to a new low after price cuts in China

The Dow Jones Industrial Average rose on Friday after the Labor Department’s December jobs report. Meanwhile, Tesla shares plunged 7%, hitting a new low after the company cut prices again in China.


For the December jobs report, nonfarm payrolls grew by 223,000, more than the 200,000 workers expected for the month, and less than the 263,000 new hires in November. Unemployment fell to 3.5% against the expected 3.7%.

Average hourly earnings rose just 0.3%, below the estimate of 0.4% and down from November’s 0.6% increase. Per Econoday, November was the seventh month in a row — and the ninth of the last 10 months — that wage growth exceeded estimates.

Meanwhile, the Institute for Supply Management’s service index for December will also be released on Friday. The ISM services index is expected to expand, with a reading of 55.0.

Ulta beauty ( ULTA ) fell nearly 2% after Wells Fargo downgraded the stock from equal weight to underweight, with a lowered price target of $400. Southwest Airlines ( LUV ) fell 1.5% after warning that the recent flight cancellations will cost up to $825 million.

Head of electric vehicles Tesla ( TSLA ) dived as much as 7% Friday. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was mixed after today’s stock market opening.

Cardinal health (CAH), Deere (OF), Medpace (MEDP) and IBD Leaderboard stocks Neurocrine Life Sciences (NBIX) – as well as Dow Jones names larva (CAT), Chevron (CVX) and Walmart (WMT) – is among the top stocks to consider for investor watchlists. Remember that the ongoing weakness in the market should keep investors on the sidelines.

Neurocrine is an IBD Leaderboard stock. Caterpillar and Medpace were recent IBD Stock Of The Day companies. And Cardinal Health was featured in last week’s Stocks Near a Buy Zone column.

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Dow Jones today: Oil prices, Treasury yields

After Friday’s opening bell, the Dow Jones Industrial Average was up 0.3%, and the S&P 500 was up 0.15%. And the tech-heavy Nasdaq composite fell 0.2% in morning action, with Tesla and a handful of China-based names trailing at the bottom of the list.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.5% and the SPDR S&P 500 ETF (SPY) traded up 0.7% early Friday.

The 10-year Treasury yield ticked down to 3.7% on Friday morning after the December jobs report, looking to add to Thursday’s modest gain. The 10-year yield is still in the process of falling sharply for the week.

Meanwhile, oil prices extended their gains on Friday morning after Thursday’s setback. West Texas Intermediate futures rose more than 1%, trading just above $74 a barrel, set for solid weekly losses.

Steep declines in natural gas continued, with Henry Hub futures down more than 3% early at $3.59 per million British thermal units. Natural gas prices fell more than 35% in December, and are down nearly 20% so far in January.

Stock correction

On Thursday, the Dow Jones Industrial Average fell 1%, and the S&P 500 fell 1.2%. The Nasdaq composite sold 1.5 percent.

Thursday’s The Big Picture column commented: “Thursday was Day 4 of a rally attempt, so a potential follow-through day could occur at any time. However, there aren’t very many leading stocks near new buy points, which is a key factor in successful follow-through days.” “

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Caterpillar, Chevron, Walmart

Dow Jones member Caterpillar held above its flat-base buy point of 239.95 despite Thursday’s 0.45% drop. according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. The shares rose 1.5 percent 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.

Energy giant Chevron pared this week’s losses, rallying 1.8% on Thursday. Shares remain below the 50-day mark, although they are building a cup base that has a buy point at 189.78. CVX shares rose 1% Friday morning, rising with oil prices.

Discount retailer Walmart builds a cup with a handle that has a buy point of 154.74. But shares are below the 50-day mark after heavy losses in recent weeks. Walmart shares rose 1.5% Friday morning.

4 top growth stocks to watch right nowrent stock market correction

Top stocks to watch: Cardinal Health, Deere, Medpace, Neurocrine

Cardinal Health, a recent IBD Stock Of The Day, fell 0.5% Thursday, still below its 50-day mark. CAH shares rose 0.7% on Friday.

Recent IBD Stock Of The Day Deere is building a flat base with a buy point at 448.50, although it gave up support around its 50-day line during Thursday’s 2.1% decline. DE stock traded up 0.9% on Friday morning.

Medpace fell further below support at its 50-day line on Thursday, indicating that the medical leader needs more time to consolidate. It is normal with the market trend in a correction. For now, the correct buy point remains at 235.82, but an earlier entry at 220.09 is also in play. MEDP shares rose 1% on Friday.

IBD Leaderboard stock Neurocrine Biosciences is back from support at its 50-day line. A flat base is close to forming and could form as early as this week. If it completes, the flat base will show a buy point at 129.39, with an early entry at 122.93. NBIX shares rose 0.8% on Friday.

Shares to watch in ongoing stock market correction

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

company name Symbol Right point of purchase Type of base
Cardinal health (CAH) 81.67 Flat base
Deere (OF) 448.50 Flat base
larva (CAT) 239.95 Flat base
Chevron (CVX) 189.78 Cup base
Walmart (WMT) 154.74 Cup with handle
Source: IBD data as of January 6, 2023

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Tesla shares dive on price cut in China

Tesla shares slipped 2.9% on Thursday, giving up a large part of Wednesday’s bounce. This week, shares hit a 52-week low of 104.64 and are about 73% lower than their 52-week high.

Shares threatened to extend Thursday’s losses, plunging more than 7% Friday morning. Tesla stock hit a new low, trading as low as 101.81.

Tesla said it cut prices by between about 6% and 13% on its two most popular electric car models in China, which are made at the Shanghai factory. Including the latest rebates, Model Y prices now start at the equivalent of around $37,000. The Model 3 starts at about $32,700, more than 30% cheaper than the price of a standard Model 3 sold on Tesla’s US website.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares sold off 1.1% on Thursday, ending close to a 52-week low of 124.17 set on Tuesday. The stock is around 32% lower than its 52-week high. The stock rose 1.1 percent on Friday morning.

Microsoft shares fell another 3% on Thursday, on pace to fall more than 7% for the week. The software giant is about 34% off its 52-week high and nearing its 52-week low of 213.43, reached on November 4. MSFT shares were down 0.2% 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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