Dow falls after housing data as Apple hits new low; Tesla plunges into production reduction plan
The Dow Jones Industrial Average fell 130 points on Tuesday, after an initial dose of economic data launched the final short week of trading of the year. Tesla shares fell more than 6% after Reuters reported that the electric vehicle giant plans to run a reduced production schedule at its Shanghai plant in January. Apple shares hit a new 52-week low. And China-based stocks rose as that nation further eased its Covid restrictions.
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Tuesday’s economic data includes two housing reports, with the Case-Shiller Home Price Index and the FHFA Home Price Index both released at 9 a.m. ET, along with the Dallas Fed’s manufacturing survey at 9 a.m. ET. 10:30 a.m.
The Case-Shiller House Price Index for October came in better than estimates, but still fell 0.5% after September’s 1.2% decline and 8.6% year-over-year increase. Meanwhile, the FHFA House Price Index was flat in October, up 9.8% year-on-year.
Finally, the Dallas Fed Manufacturing Survey is expected to post a reading of -11.0 in December versus -14.4 in the prior month.
On the earnings front, the calendar is empty this week heading into the final week of 2022, with Cal-Maine Foods (CALM DOWN) the only reporter on Wednesday after closing.
southwest airlines (light) decreased by more than 4% after the company canceled more than two-thirds of its flights on Monday, with plans to reduce its schedules on Tuesday and Wednesday due to holiday winter storms.
giant EV tesla (TSLA) dipped around 6% on Tuesday. Dow Jones Technology Leaders Apple (AAPL) Y Microsoft (MSFT) traded lower after stock market today open.
med pace (MEDP), IBD Classification Table values Neurocrine Biosciences (NBIX), O’Reilly Auto Parts (ORLY) Y Texas Roadhouse (TXRH), as well as the names of Dow Jones Amgen (AMGN) Y Caterpillar (CAT), are among the top stocks to consider for investor watch lists. Note that recent market weakness should keep investors on the defensive.
Neurocrine and Texas Roadhouse are IBD Classification Table stocks. caterpillar and med pace were recent IBD Stock of the Day companies.
Dow Jones Today: Oil Prices, Treasury Yields
After the opening bell on Tuesday, the Dow Jones Industrial Average was down 0.4%, while the S&P 500 lost 0.8%. The big-tech Nasdaq composite fell 1.5% in morning action, with Tesla pulling sharply lower while China names trip.com (TCOM), pinduoduo (dpd) Y jd.com (JD) posted strong gains.
Among us exchange traded fundsNasdaq 100 follower Invesco QQQ Trust (QQQ) fell 1.3% and the SPDR S&P 500 ETF (TO SPY) was down 0.6% early Tuesday.
Chinese authorities said the country would end its mandatory quarantine requirement for incoming travelers from January 8. Restrictions on the number of passengers and international flights will also be lifted. The latest step in easing China’s strict Covid restrictions comes even as infections are reported to be spreading rapidly across the country.
China-based solar makers posted some of the strongest early moves, with jinkosolar (J.K.S.) Y daqo new energy (DQ) each more than 4%. Among ETFs, KraneShares CSI China Internet (WEB) jumped 2.3%. The iShares MSCI China (MCHI) added 2.2%.
The 10-year Treasury yield rose as high as 3.82% Tuesday morning, and the 10-year bond yield rose after strong gains last week. Meanwhile, US oil prices rose less than 1% on Tuesday as West Texas Intermediate futures traded just above $80 a barrel in morning trading.
Stock rally under pressure
On Friday, the Dow Jones industrial average rose 0.5% and the S&P 500 advanced 0.6%. The tech-heavy Nasdaq Composite was up just 0.2%.
Friday’s The Big Picture column He commented: “The Nasdaq Composite also rebounded from negative territory, although its gain was a measly 0.2%. The Tech Index ended up falling 1.9% for the week and has work to do to break its downtrend. is faring far worse than the S&P 500 this year, shedding nearly 34%.”
Now is an important time to read. IBD’s The Big Picture column amid the current stock market volatility.
Five Dow Jones Stocks to Buy and Watch Now
Dow Stocks to Watch: Amgen, Caterpillar
Drugmaker Amgen continues to chart a flat bottom amid a three-week losing streak. And the stock is below its 50-day line after heavy losses. For now, the correct buy point is 296.77, but the stock needs to decisively retake its first 50-day position. AMGN shares traded 0.6% higher on Tuesday.
Dow Jones member Caterpillar broke above a buy point of 239.95 on a flat basis last week, according to IBD MarketSmith Pattern Recognition, and just a few cents below the entry that follows Friday’s advance. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. CAT shares rose 0.2% on Tuesday.
CAT shares shows a strong 98 from a perfect 99 IBD Composite Classificationfor him IBD Stock Check. The composite rating is designed to help investors easily find the fastest growing stocks.
4 Top Growth Stocks to Watch in the Current stock rally
Top Stocks to Watch: Medpace, Neurocrine, O’Reilly, Texas Roadhouse
Medpace rebounded sharply from its 50-day line last week, gaining 3.3%. The stock rose 0.7% on Friday to extend a winning streak to four sessions. For now, the correct buy point looms at 235.82, but an earlier entry at 220.09 is also in play. MEDP shares were down 0.3% on Tuesday.
IBD Classification Table Neurocrine shares fell 1.7% on Friday, ending a five-day winning streak in which the biotech leader found support at its 50-day level. A strong bounce is bullish for the stock’s immediate outlook and the stock is likely forming the right hand side of a new bottom. NBIX shares were down 0.1% on Tuesday.
O’Reilly Auto Parts also found much-needed support at its 50-day line last week and is holding directly above a flat bottom entry of 750.98. A big rally off the 50-day line could trigger a trailing entry point, but the market’s uptrend is under pressure right now, increasing the risk of buying stocks. It is likely that a new base is being formed, which will offer a new entrance in the near future. ORLY shares rose 0.5% on Tuesday.
Texas Roadhouse shows a new buy point at 101.85 on a flat basis, but is now consolidating below its 50-day line. IBD Leaderboard stocks will look to regain that key benchmark over the coming sessions, and the current two-day winning streak is a promising start. TXRH shares traded slightly higher Tuesday morning.
Actions to watch
Here are the top four stocks to watch in today’s stock market, including two Dow Jones leaders.
| company name | Symbol | correct point of purchase | base type |
|---|---|---|---|
| med pace | (MEDP) | 235.82 | Consolidation |
| Texas Roadhouse | (TXRH) | 101.85 | flat base |
| Caterpillar | (CAT) | 239.95 | flat base |
| Amgen | (AMGN) | 296.77 | flat base |
Source: EII data as of December 27, 2022
Join IBD experts as they discuss the top stocks in the current stock market rally on IBD Live
Tesla Stock
tesla shares it declined another 2% on Friday, extending a losing streak to six sessions and hitting another 52-week low. Last week, Tesla shares fell 18% to hit a new 52-week low of 121.02. Shares closed about 69% below their 52-week high.
Shares extended their losses on Tuesday morning, falling another 6% after Reuters reported that Tesla extended its production cuts that began this month into next year. Tesla shares hit a new low, trading as low as 114.75.
Tesla reportedly suspended production at its Shanghai plant on Saturday, accelerating its plan to pause production at the plant in late December.
Dow Jones Leaders: Apple, Microsoft
Between dow jones stock, Apple shares fell 0.3% on Friday, closing just below its 52-week low, which was set on June 16 at 129.04. The stock is around 28% below its 52-week high. The shares lost 2.1% on Tuesday, hitting a new 52-week low and trading as high as 128.72.
Microsoft shares rose 0.2% on Friday but remain below the 50-day line after falling 2.4% last week. The software giant remains around 30% below its 52-week high. MSFT shares were down 0.9% early Tuesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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