The Dow Jones Industrial Average plunged 500 points on Friday morning after the Department of Labor’s stronger-than-expected jobs report in September. Advanced micro-systems (AMD) plunged 8% and sparked early selling among chip stocks, posting weaker-than-expected third-quarter earnings preliminary results Thursday night.
AMD warned that the weakness was a combination of a “weaker-than-expected PC market and significant inventory correction actions throughout the PC supply chain.” Meanwhile, Semiconductor manufacturing in Taiwan (TSM) reported quarterly earnings above expectations. But shares were still down about 3.5%.
Stock Market Today: Employment Report
September employment report came out before Friday’s opening, at 8:30 a.m. ET. The U.S. economy grew by 263,000 jobs in September, beating Econoday estimates that called for job growth of 250,000. The unemployment rate fell to 3.5%, below the estimate of 3 .7%.
Aehr test systems (AEHR) countered early action from the chip sector. This beat Wall Street estimates for its first fiscal quarter and maintained its strong growth targets for the full year. Shares jumped more than 12% in morning trading.
Lyft (LYFT) slid more than 5% after RBC downgraded the stock from outperform to sector performance with a price target of 16, down from 30. Twitter (TWTR) fell 1% on Friday morning, as a judge ruled that Elon Musk must close his $44 billion Twitter deal before October 28, or else face trial in November.
Leader in electric vehicles You’re here (TSLA) was trading down 3.1% on Friday. Among the industrialists of the Dow Jones, the titans of tech Apple (AAPL) and Microsoft (MSFT) were both significantly lower after today’s stock market open.
As the stock market continues to wait for a day of trend change, Cummins (CMI), Murphy UNITED STATES (MUSA), Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX) and World wrestling entertainment (WWE) — as well as the Dow Jones stock UnitedHealth (A H) – are among the best stocks to watch. Amidst this week’s volatility, the market’s status remains “in correction” and investors are likely to remain on the defensive.
Vertex is a recent addition to IBD classification. Cummins is a IBD Swing Trader Stock. Murphy USA was featured in the Stock column near a buy zone this week, along with three other best stock ideas. The global struggle was a Stock of the day September 29. Neurocrine was a Stock of the day September 26.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday’s opening bell, the Dow Jones Industrial Average fell 1.7%, while the S&P 500 lost 2.2%. The tech-heavy Nasdaq composite fell 2.8%, with AMD, Nvidia (NVDA), Intel (INTC) and ASML (ASML) leading the declines.
The 10-year Treasury yield rose to 3.9% on Friday morning. The 10-year Treasury yield fell to 3.56% this week before rebounding. Last week, the 10-year Treasury yield briefly topped 4%, the lowest it had been in over a decade.
Meanwhile, US oil prices continued their rebound from this week, rising more than 1% on Friday. West Texas Intermediate futures climbed near $90 a barrel. Last week, oil fell to its lowest level of the year – around $76 a barrel – before rebounding.
Stock market rally attempt
On Thursday, the Dow Jones Industrial Average was down 1.1%, while the S&P 500 closed down 1%. The Nasdaq composite lost 0.7% and the small-cap Russell 2000 fell 0.6%. The S&P 500 and the Nasdaq remain above their latest lows, so their attempts to rally remain intact.
Monday’s market advance kicked off another rally attempt, which was your first day. Should the major indices cut their September 30 lows, it would stifle the attempted rally and leave the market still searching for a bottom.
Thursday’s The Big Picture commented“Thursday was Day 4 of the stock market’s attempted rally, so investors are now patiently waiting for a follow-up day, which will signify the start of a new uptrend. Keep in mind that not all follow-ups work, so it’s important to increase exposure slowly and methodically as the uptrend reveals itself.”
Now, before a possible follow-up day, is the perfect time to build a strong watchlist best performing stocks. Many long-term leaders tend to break out at or near the trailing, market bottom signal. Missing that first opportunity can be a costly mistake.
A challenge with forming a watchlist during a correction is that while you wait for a tracking day, stock charts may change. This means that certain bases among the stocks on your watchlist may deteriorate. The update is therefore important.
Dow Jones stocks to watch: UnitedHealth
Dow Jones UnitedHealth stock fell 1.5% on Thursday, ending a three-day winning streak and meeting resistance at the key 50-day line. The shares are building a flat base that has a buy point of 553.23, according to IBD MarketSmith graphical analysis. UNH stock fell 1.55% on Friday morning.
UNH stock shows a solid 94 over a perfect 99 IBD Composite Assessment, speak IBD inventory check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics. UnitedHealth releases its third quarter results on October 14.
Top stocks to watch: Cummins, Murphy USA, Neurocrine, Vertex, WWE
Cummins is moving quickly to the right side of a cup base that has a buy point of 233.95. Stocks recovered their 50-day line this week in strong volume, a positive sign. The company’s next results are Nov. 4. Cummins stock was down 0.7% on Friday morning.
Murphy USA, the leader in gas stations and mini-markets, is building a flat base with a buy point of 303.19. Shares were down 1.5% on Thursday, continuing their decline after Tuesday’s bearish reversal. The stock is finding strong resistance at its 50-day line. A decisive recovery from this level would be bullish for the stock’s basis building outlook. Third quarter results are expected on October 26. The shares were down 1.4% on Friday.
Neurocrine Biosciences is in the 5% buy zone after the buy point of 109.36 from a flat base, according to IBD MarketSmith graphical analysis. The RS line hit a new high on Thursday, a bullish signal. Shares rose 0.7% early Friday.
IBD Ranking Stock Vertex Pharmaceuticals is rapidly approaching the buy point of 306.05 on a flat basis and above an early entry at 296.24. While market weakness may keep you on the sidelines, the stock’s resilience makes it a great idea to watch. Its RS line is just off new highs, a potential sign of a big stock market outperformance. VRTX stock fell 0.3% on Friday.
World Wrestling Entertainment is trying to top the entry of 75.33 from a cut base, but closed about 3% below the entry after Thursday’s 0.7% decline. The RS line hit a new high this week. WWE shares rose 0.1% on Friday.
Tesla Stock fell 1.1% on Thursday, closing at its lowest level since July 13. Shares were down 3.1% on Friday morning, as CEO Musk tweeted, “Excited to announce the start of Tesla Semi Truck production with deliveries to @Pepsi on December 1st!” He added, “500 mile range and super fun to drive.”
The shares are around 40% off their 52-week high and significantly below their 50- and 200-day lines. The electric vehicle giant’s third-quarter results are on Oct. 19.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares fell 0.7% on Thursday, ending a three-day winning streak. The shares are still around 21% off their 52-week high and below their 50- and 200-day lines. Third-quarter results are October 27. Apple shares fell 2.6% on Friday morning.
Microsoft fell 1% on Thursday, ending a three-day winning streak. Stocks are still rebounding from last week’s 52-week low. The software giant remains around 30% off its 52-week high. Microsoft shares slid 4% early Friday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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