The Dow Jones Industrial Average rose on Wednesday after economic data, with another housing report and a Fed manufacturing index out. Tesla stock hit yet another low before rebounding sharply, looking to recover a little bit of its historic fall in December.
Wednesday’s economic data includes the pending home sales index and the Richmond Fed’s manufacturing index. The Richmond Fed likely won’t touch much of the stock market.
But pending home sales in November could move homebuilder stocks, which have recently shown increasing signs of strength. Per the Econoday estimate, pending home sales from the National Association of Realtors fell 4% in November, much worse than the expected 0.5% drop.
On Tuesday, Case Shiller reported that home prices fell in October for a fourth straight month, as higher mortgage rates continue to dampen demand. Case Shiller’s housing price index for November will be released at the end of January.
Meanwhile, the Richmond, Va., index for the Federal Reserve’s Fifth District survey of manufacturing activity posted a 1 reading for December, higher than the expected -6 reading and November’s -9 reading. The survey measures manufacturing activity in the region bordering Maryland, South Carolina and West Virginia.
On the earnings front, chicken egg distribution giant Cal-Maine Foods (CALM) will report Wednesday after the close. The CALM share is in buy territory past a buy point of 62.74 after strong gains in recent weeks.
Head of electric vehicles Tesla ( TSLA ) reversed higher on Wednesday, rising more than 4% as Baird reaffirmed its outperform rating on the stock, despite a price target cut, and according to Wedbush forecasts the automaker is likely to miss its fourth-quarter estimates. Dow Jones Technology Leaders apple (AAPL) and Microsoft (MSFT) traded higher after today’s market opening.
Cardinal health (CAH), Medpace (MEDP), IBD Leaderboard stock Neurocrine Life Sciences (NBIX) and Texas Roadhouse (TXRH) – as well as Dow Jones names Amgen (AMGN), larva (CAT) and Chevron (CVX) – is among the top stocks to consider for investor watchlists. Remember, the recent weakness in the market should keep investors on the defensive.
Neurocrine is an IBD Leaderboard stock. Caterpillar and Medpace were recent IBD Stock Of The Day companies. And Cardinal Health is featured in this week’s Stocks Near a Buy Zone column.
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 Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.1%, while the S&P 500 rose 0.15%. The technology-heavy Nasdaq composite rose 0.2% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) was up 0.5% and the SPDR S&P 500 ETF ( SPY ) was up 0.4% early Wednesday.
The 10-year Treasury yield dipped to 3.80% on Wednesday morning, struggling to hold the 50-day line after two weeks of sharp gains. Meanwhile, U.S. oil prices traded modestly lower on Wednesday, as West Texas Intermediate futures hit resistance just above $79 a barrel after a two-week gain.
Stock market rally under pressure
On Tuesday, the Dow Jones Industrial Average rose 0.1 percent, while the S&P 500 fell 0.4 percent. The technology-heavy Nasdaq composite sold 1.4 percent.
Tuesday’s The Big Picture column commented: “The stock market started a shortened week of trading with a mixed performance on Tuesday as rising bond yields led to more selling in the technology sector. Historically, the last trading week of the year is usually a good one for the stock market. But with the market rally under pressure, the sellers still dictate the action.”
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Amgen, Caterpillar, Chevron
Drugmaker Amgen continues to track a flat base amid a three-week losing streak. And shares are further below the 50-day line after several losses on Tuesday. For now, the correct buy point is 296.77, but the stock needs to recover the 50 days first. The AMGN share rose 0.4 percent on Wednesday.
Dow Jones member Caterpillar finished in the 5% chase zone past a 239.95 buy point in a flat base on Tuesday, according to IBD MarketSmith pattern recognition. The buying range goes up to 251.95. Bullishly, the stock’s relative strength line, an important technical indicator, is at new heights. CAT shares rose 0.1% on Wednesday.
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 decisively moved above its 50-day line during Tuesday’s 1.3% rally, moving up on the right side of a flat base that has a buy point at 189.78. CVX shares were down 0.5% on Wednesday morning, falling in line with oil prices.
4 top growth stocks to watch right nowra stock market rally
Top stocks to watch: Cardinal Health, Medpace, Neurocrine
Cardinal Health, a recent IBD Stock Of The Day, is holding near an 81.67 buy point in a flat base. The stock fell 1.1 percent on Tuesday. The CAH share rose slightly on Wednesday.
Medpace bounced sharply from its 50-day line last week, with a gain of 3.3%. But the stock gave up a large part of these gains during Tuesday’s 2% fall. For now, the correct buy point is 235.82, but an earlier entry of 220.09 is also in play. The MEDP share rose 0.1 percent on Wednesday.
IBD Leaderboard stock Neurocrine fell 1.15% on Tuesday, retesting support around its 50-day level. A recent rejection of the 50-day line was bullish for the stock’s outlook, but now the stock is retesting that key area. NBIX shares fell a fraction on Wednesday.
Texas Roadhouse shows a new buy point at 101.85 in a flat base, but is now consolidating below its 50-day line. The restaurant leader will try to recover the key benchmark in the coming sessions, but Tuesday’s 2.2% decline was a warning sign. TXRH stock traded up 0.3% Wednesday morning.
Stocks to watch
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|
|Texas Roadhouse||(TXRH)||101.85||Flat base|
Source: IBD data as of December 28, 2022
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares fell another 11.4% on Tuesday, extending a losing streak to seven sessions and hitting another 52-week low of 108.76. The shares closed approx. 73% of its 52-week high.
Shares hit another new low on Wednesday morning at 108.24 before turning higher and gaining more than 4%. TSLA stock is set to plunge 44% for the month of December, its worst monthly performance ever, according to Dow Jones Market Data.
Early Wednesday, Baird cut his price target on the electric car giant from 316 to 252, but it is still more than 130% above where the shares closed on Tuesday. The note maintained Tesla’s outperformance and recommended it as a “Best Buy” stock for 2023.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares shed 1.4% on Tuesday, paring losses after hitting a new 52-week low of 128.72. The stock is around 30% off its 52-week high. The share rose 0.5 percent on Wednesday.
Microsoft shares fell 0.7% on Tuesday, falling further below the 50-day mark. The software giant is about 31% off its 52-week high. MSFT shares rose 0.7% early Wednesday.
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