The Dow Jones Industrial Average rose Wednesday after economic data, with another housing report and a Fed manufacturing index out. Tesla stock hit another new low before bouncing sharply, looking to recover a small bite of its historic December plunge.
Wednesday’s economic data includes the pending home sales index and the Richmond Fed manufacturing index. The Richmond Fed isn’t likely to stir much stock action.
But November pending home sales could move homebuilder stocks, which have recently shown increasing signs of strength. Per Econoday estimates, pending home sales from the National Association of Realtors dropped 4% in November, much worse than the expected 0.5% fall.
On Tuesday, Case Shiller reported that home prices fell in October for the fourth straight month, as higher mortgage rates continue to curb demand. The Case Shiller home price index for November is due in late January.
Meanwhile, the index out of Richmond, Va., 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 gauges manufacturing activity in the region bordered by Maryland, South Carolina and West Virginia.
On the earnings front, chicken egg distribution giant Cal-Maine Foods (CALM) will report Wednesday after the close. CALM stock is in buy range past a 62.74 buy point after strong gains in recent weeks.
Electric-vehicle leader Tesla (TSLA) reversed higher Wednesday, rallying more than 4% as Baird affirmed its outperform rating on the stock, despite a price target cut, and after Wedbush forecast the automaker would likely miss its fourth-quarter estimates. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded higher after today’s stock market open.
Cardinal Health (CAH), Medpace (MEDP), IBD Leaderboard stock Neurocrine Biosciences (NBIX) and Texas Roadhouse (TXRH) — as well as Dow Jones names Amgen (AMGN), Caterpillar (CAT) and Chevron (CVX) — are among the top stocks to consider for investor watchlists. Keep in mind the recent market weakness should keep investors on the defensive.
Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average moved up 0.1%, while the S&P 500 rose 0.15%. The tech-heavy Nasdaq composite gained 0.2% in morning action.
The 10-year Treasury yield swung lower to 3.80% Wednesday morning, with the yield fighting to hold its 50-day line after two weeks of sharp gains. Meanwhile, U.S. oil prices traded modestly lower Wednesday, as West Texas Intermediate futures running into resistance just above $79 a barrel after a two-week advance.
Stock Market Rally Under Pressure
On Tuesday, the Dow Jones Industrial Average edged up 0.1%, while the S&P 500 dropped 0.4%. The tech-heavy Nasdaq composite sold off 1.4%.
Tuesday’s The Big Picture column commented, “The stock market kicked off a shortened week of trading with a mixed performance Tuesday as rising bond yields fueled more selling in the technology sector. Historically, the final trading week of the year is usually a good one for the stock market. But with the market uptrend under pressure, sellers are still dictating the action.”
Dow Jones Stocks To Watch: Amgen, Caterpillar, Chevron
Drugmaker Amgen continues to trace a flat base amid a three-week losing streak. And shares are further below their 50-day line after more losses Tuesday. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. AMGN stock traded up 0.4% Wednesday.
Dow Jones member Caterpillar finished in the 5% chase zone past a 239.95 buy point in a flat base Tuesday, according to IBD MarketSmith pattern recognition. The buy area goes up to 251.95. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. CAT stock was up 0.1% Wednesday.
Energy giant Chevron decisively moved above its 50-day line during Tuesday’s 1.3% rally, moving up the right side of a flat base that has a 189.78 buy point. CVX stock moved down 0.5% Wednesday morning, falling in line with oil prices.
Top Stocks To Watch: Cardinal Health, Medpace, Neurocrine
Cardinal Health, a recent IBD Stock Of The Day, is holding close to a 81.67 buy point in a flat base. Shares declined 1.1% Tuesday. CAH stock was up slightly Wednesday.
Medpace bounced sharply from its 50-day line last week, with a gain of 3.3%. But the stock gave up a big part of those gains during Tuesday’s 2% fall. For now, the correct buy point looms at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock was up 0.1% Wednesday.
IBD Leaderboard stock Neurocrine slipped 1.15% Tuesday, again testing support around its 50-day level. A recent bounce off that 50-day line was bullish for the stock’s prospects, but now the stock is again testing that key area. NBIX stock was down a fraction 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 look to recover that key benchmark over the coming sessions, but Tuesday’s 2.2% decline was a cautionary 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||Correct Buy Point||Type Of Base|
|Cardinal Health||(CAH)||81.67||Flat base|
|Texas Roadhouse||(TXRH)||101.85||Flat base|
Source: IBD Data As Of Dec. 28, 2022
Tesla stock crumbled another 11.4% Tuesday, extending a losing streak to seven sessions and hitting another 52-week low at 108.76. Shares closed about 73% off their 52-week high.
Shares hit another new low Wednesday morning at 108.24 before reversing higher and moving up more than 4%. TSLA stock is set to plunge 44% for the month of December, its worst monthly performance on record, according to Dow Jones Market Data.
Early Wednesday, Baird cut its price target on the EV giant from 316 to 252, but that’s still more than 130% above where shares closed on Tuesday. The note maintained Tesla’s outperform rating and recommended it as a “Best Buy” stock for 2023.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 1.4% Tuesday, paring losses after hitting a new 52-week low price at 128.72. The stock is around 30% off its 52-week high. Shares gained 0.5% Wednesday.
Microsoft stock dropped 0.7% Tuesday, falling further below the 50-day line. The software giant is about 31% off its 52-week high. MSFT stock moved up 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.
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