Dow Jones rises on Powell comments; Boeing slips on downgrade

The Dow Jones Industrial Average rose on Tuesday amid Fed Chairman Jerome Powell’s comments. Meanwhile, aerospace giant Boeing (BA) rallied after a Morgan Stanley downgrade.

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Powell comments, earnings results

Powell appeared at the Sveriges Riksbank International Symposium on Central Bank Independence in Stockholm. The central bank is strongly committed to reducing inflation, although raising interest rates to limit economic growth could lead to political backlash, Powell commented in prepared remarks.

Powell’s prepared remarks did not comment on the Federal Reserve’s upcoming interest rate decisions, but instead emphasized the importance of central bank independence without political interference.

Powell’s speech follows comments from Atlanta Federal Reserve President Raphael Bostic and San Francisco Fed President Mary Daly that tripped markets on Monday. Daly and Bostic each pointed to Fed rate hikes somewhere above 5%.

Powell’s comments also follow Friday’s jobs report, which saw wage growth cooling much more than expected and workers working fewer hours for a second straight month. The data should allow the Fed to further reduce the pace of rate hikes.

Late Monday, Jefferies (JEF) reported earnings that met estimates, and sales that topped forecasts. Jefferies shares lost more than 1% in morning trading. Albertsons (ACI) climbed 1% after an earnings call. Bed Bath & Beyond ( BBBY ) jumped 12% in morning trading after missing estimates for the third quarter.

Other companies reporting later this week include KB Home (KBH), Taiwan Semiconductor Manufacturing (TSM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC).

Dow Jones aerospace leader Boeing fell 2.2% after Morgan Stanley downgraded the stock from overweight to equal weight. Royal Caribbean ( RCL ) rose 1% after Morgan Stanley upgraded the cruise operator from underweight to equal weight. Finally, AT&T (T) rose 1.4%, as Wells Fargo upgraded the stock from equal weight to overweight.

Electric vehicle leader Tesla reversed more than 1% lower on Tuesday, amid reports that the automaker delivered more than 10,000 vehicles in a single day on Friday. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) were both higher after today’s market opening.

Deere (DE), IBD Leaderboard stock ELF beauty (ALV), Rio Tinto (RIO) and Super micro computer (SMCI) – as well as Dow Jones names larva (CAT), Chevron (CVX) and Walmart (WMT) — is among the best stocks to buy and watch with the market back in rally mode.

ELF Beauty is an IBD Leaderboard stock. Caterpillar and Rio were featured in this week’s last column for stocks near a buy zone.

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Dow Jones today: Oil prices, Treasury yields

After Tuesday’s opening bell, the Dow Jones Industrial Average rose 0.2%, while the S&P 500 rose 0.15%. And the tech-heavy Nasdaq composite rose 0.25% in morning action.

Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.2% and the SPDR S&P 500 ETF (SPY) traded up 0.15% early Tuesday.

The 10-year Treasury yield ticked up to 3.58% on Tuesday morning, looking to snap a two-day losing streak.

Meanwhile, oil prices headed for a third straight gain, recovering to around the midpoint of their recent trading range. West Texas Intermediate futures rose less than 1%, trading around $75 a barrel.

Stock market rally

On Monday, the Dow Jones Industrial Average closed down 0.3% after giving up solid gains, and the S&P 500 lost 0.1%. The Nasdaq composite showed strong gains to 0.6%.

Monday’s The Big Picture column commented: “If this rally in the stock market is real, investment opportunities will appear for weeks or months. Thus, there is no need to rush. With any purchase, start with half of the intended investment. If the stock continues to rise. , add more as you try to complete your purchases before the stock is more than 5% above the buy point.”

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Caterpillar, Chevron, Walmart

Dow Jones member Caterpillar closed right in buy territory above a flat-base buy point of 239.95 after Monday’s 3.6% advance, according to IBD MarketSmith pattern recognition. The buy zone, which CAT shares have dodged in and out of since December 21, goes up to 251.95. Bullishly, the stock’s relative strength line, an important technical indicator, is at new heights. The stock fell 0.3 percent on Tuesday.

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 is trying to retake its 50-day line as it continues to build a cup base that has a buy point at 189.78. CVX shares rose 0.8% on Tuesday morning, despite the modest rise in oil prices.

Discount retailer Walmart retook its 50-day line during Friday’s 2.45% jump. It then unbullishly returned this support on Monday. Shares are building a cup-with-handle base that has a buy point at 154.74 and is about 5% away from its last entry. Walmart stock rose Tuesday morning.

4 top growth stocks to buy and watch in the new Stock market rally

Top stocks to buy and watch: Deere, ELF Beauty, Rio, Super Micro

Recent IBD Stock Of The Day, Deere, is building a flat base with a buy point of 448.50. The shares have an eye on the buy point when they bounce back after a test of 50-day support. Deere shares lost 0.1 percent on Tuesday morning.

IBD Leaderboard stock ELF Beauty gave up its 57.03 flat-base entry amid Monday’s sharp decline. Shares broke out Friday on heavy volume, indicating strong institutional demand for the cosmetics leader. The 5% buy zone tops out at 59.88 if the stock is able to regain the buy point. The ELF share fell 0.8 percent on Tuesday.

Last IBD stock of the day Rio Tinto rose 0.1% on Monday, moving further above a cup of handle buy point at 73.45. The buying range goes up to 77.13. Rio shares rose 1% on Tuesday.

Super Micro Computer is moving up quickly on the right side of a short consolidation that has a buy point of 95.32. But SMCI stock plunged 7% Tuesday morning after Spruce Point Management issued a brief report.

Shares to buy and watch in new stock market rally

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

Source: IBD data as of 10 January 2023

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

Tesla shares

Tesla shares rose nearly 6% on Monday, adding to Friday’s upside. The shares remain strongly below the 50- and 200-day limits. Last week, shares hit a 52-week low of 101.81. Tesla stock closed Monday about 68% off its 52-week high.

Shares in the EV giant looked set to extend a two-day winning streak, but reversed more than 1% lower on Tuesday morning.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones shares, the Apple share rose 0.4 percent on Monday. Last week the stock hit a new 52-week low of 124.17. The stock is still around 20% lower than its 52-week high. AAPL shares rose 0.2 percent on Tuesday.

Microsoft shares rose 1% on Monday, adding to Friday’s gains. The software giant is about 30% off its 52-week high and remains close to its 52-week low of 213.43, reached on November 4. Microsoft shares rose 1% early Tuesday.

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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