The Dow Jones industrial average rose more than 375 points on Wednesday morning after consumer and housing data. fedex (FDX) Y Nike (FROMShares of ) rose sharply in morning trading after the companies posted earnings results.
Economic data for Wednesday morning includes consumer confidence and existing home sales. December’s consumer confidence index will be closely watched after last week’s data showed a surprise pullback in consumer spending in November. The index beat estimates at 108.3 in December versus November’s reading of 100.2.
Meanwhile, November existing home sales fell further, to an annualized rate of 4.09 million from 4.43 million in October. Housing data on Tuesday was mixed, with home starts beating estimates and new permits missing consensus targets. Homebuilder stocks have shown recent signs of strength, with three names ascending to the IBD 50 list in the last week.
FedEx and Nike reported their quarterly earnings results after the close on Tuesday. FedEx Stock jumped 6%, while Nike shares increased up to 15%. Nike’s strength helped drive adidas (ADDYY) Y shoe drawer (Florida) Share. Adidas jumped nearly 7%, while Foot Locker rallied 3.6%.
Dow Jones energy giant Chevron (CLC) was one of the best in the Dow 30 as a drop in weekly supply data helped push oil prices higher. CVX shares rose more than 1%. Dow Jones Technology Leaders Apple (AAPL) Y Microsoft (MSFT) traded higher after stock market today open.
electric vehicle giant tesla (TSLA) reversed more than 2% more on Wednesday morning, as Chief Executive Elon Musk vowed to step down from his CEO role at the social networking site Twitter.
IBD Classification Table values Neurocrine Biosciences (NBIX), ELK (CLUTCH), O’Reilly Auto Parts (ORLY) Y united rentals (URIs), as well as the names of Dow Jones Amgen (AMGN), Caterpillar (CAT) Y house deposit (High Definition), are among the top stocks to consider for investor watch lists.
Neurocrine and United Rentals are IBD Classification Table stocks. UnitedHealth it was presented in the last week Column Stocks near a buy zone. Caterpillar and United Rentals were recent IBD Stock of the Day companies.
Dow Jones Today: Oil Prices, Treasury Yields
After the opening bell on Wednesday, the Dow Jones industrial average rose 1%, while the S&P 500 rose 0.7%. The Nasdaq technology composite followed with a 0.5% gain in morning action.
The 10-year Treasury yield fell as low as 3.64% on Wednesday morning, pausing after a surprise move by the Bank of Japan upended global bond markets and pushed the US yield up to 3, 68% on Tuesday.
Meanwhile, US oil prices rose around 2% on Wednesday as industry data from the American Petroleum Institute showed US crude inventories fell around 3.1 million barrels last week, more than expected. Official weekly data is due by the Energy Information Administration by 10:30 am ET. West Texas Intermediate futures rose to nearly $78 a barrel in morning trading.
Stock rally under pressure
On Tuesday, the S&P 500 ended the trading day with a slight gain of 0.1%. The benchmark remains stuck below the 50 day moving average, although it remains at a surprising distance. The Nasdaq Composite closed the session virtually unchanged. The high-tech index continues to fall nearly 33% so far in 2022. It is 3.5% below its 50-day line and is nearly 9% below its December 13 high.
Tuesday’s The Big Picture column He commented: “Investors should note that while the indices rebounded slightly, it was far from a decisive move. As the market has slipped into oversold territory, a more powerful rally is desirable.”
Now is an important time to read. IBD’s The Big Picture column amid the current stock market volatility.
Dow Stocks to Watch: Amgen, Caterpillar, Home Depot
Drugmaker Amgen is building a new flatbed after a breakthrough in mid-November. But shares are below their 50-day line after heavy losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to decisively retake its first 50-day position. AMGN shares were down 0.1% on Wednesday.
Dow Jones member Caterpillar continues to trade near a buy point of 239.95 on a flat basis, according to IBD MarketSmith Pattern Recognition, after the rise of 1.2% on Tuesday. Stocks found support at the stock’s 21-day exponential moving average in recent days and the stock’s relative strength line is reaching new highs. CAT shares rose 1.6% on Wednesday.
Home improvement retailer Home Depot is about 4% below the 329.77 buy point of a mug-handle base after reversing last week’s breakout move. HD shares were up 1.3% on Wednesday morning.
Top Stocks to Watch: KLA, Neurocrine, O’Reilly, United Rentals
Chip equipment leader KLA has largely held up amid market weakness, and is roughly 2% down from a cup-handle entry of 392.60 after Tuesday’s modest loss. KLA shares traded 0.7% on Wednesday.
IBD Classification Table Neurocrine stock continues to find support at its 50-day level amid a two-day winning streak. A sharp rally would be bullish on the stock’s immediate outlook and likely lead to the formation of a new base. Meanwhile, a sharp gap could mean stocks need more consolidation. NBIX shares rose 0.4% on Wednesday.
O’Reilly Auto Parts is also finding much needed support on its 50 day line this 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. ORLY shares rose 0.4% on Wednesday.
United Rentals remains directly below a buy point of 368.04 in a mug with handle Pattern. Stocks are roughly 5% below buy point, and further weakness would trigger the 7%-8% loss rule. URI holdings rose 1% on Wednesday.
Actions to watch
Here are the top five stocks to watch in today’s stock market, including three leaders from the Dow Jones.
|company name||Symbol||correct point of purchase||base type|
|ELK||(CLUTCH)||392.60||mug with handle|
|united rentals||(URIs)||368.04||mug with handle|
|house deposit||(High Definition)||329.77||mug with handle|
Source: EII data as of December 20, 2022
tesla shares it plunged another 8.05% on Tuesday, hitting another 52-week low and trading as low as 137.66. Shares rose more than 2% on Wednesday morning, reversing higher after hitting a fresh 52-week low at 135.89.
On Tuesday, TSLA shares hit their lowest level since November 2020. The shares closed about 66% below their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Between dow jones stockApple shares fell on Tuesday, paring losses after nearly hitting a new 52-week low, set at 129.04 on June 16. The stock is around 28% below its 52-week high. Shares traded 1% down on Wednesday.
Microsoft rose 0.6% on Tuesday as shares held support around its 50-day line after snapping a three-day losing streak. The software giant remains around 30% below its 52-week high. MSFT shares were up 0.2% early Wednesday.
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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