The Dow Jones Industrial Average reversed higher on Wednesday despite hot inflation data from the Producer Price Index. Minutes of the Federal Reserve’s latest policy meeting are expected to be released later today.
The U.S. Department of Labor’s producer index, or PPI, rose 0.4% in September from the previous month, warmer than the expected 0.2% rise, according to Econoday estimates. Wholesale inflation rose 8.5% from a year ago, above the estimate of 8.4%.
Also on Wednesday, the minutes of the September 20-21 Federal Reserve meeting are due at 2 p.m. ET. And the consumer price index is due Thursday, with September retail sales released Friday.
The third quarter earnings season begins this week, with PepsiCo (DYNAMISM) reporting strong results Wednesday morning. Shares rebounded 3% in early morning trading.
Stock market today: profits at your fingertips
Leader in electric vehicles You’re here (TSLA) was trading down 1.5% on Wednesday. Among the industrialists of the Dow Jones, the titans of tech Apple (AAPL) and Microsoft (MSFT) were shuffled after today’s stock market open. Intel (INTC) fell 0.7% after Bloomberg reported the company plans to lay off thousands of workers as early as this month.
Cardinal Health (HAC), Conoco Phillips (COP), Denbury (LAIR) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Chevron (CLC) and Merck (M.K.R.) – are among the best stocks to watch. Keep in mind that the current stock market correction is a time for investors to sit on the sidelines and build watchlists of top growth stocks.
Cardinal Health and Vertex are IBD classification shares. Chevron and Conoco were presented in this week’s Stock Near A Buy Zone column, along with two other top stock ideas. Vertex was IBD Stock of the day Friday. Merck was Tuesday’s IBD 50 stock picks to watch.
Dow Jones Today: Treasury Yields, Oil Prices
After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.4% after reversing from early losses, while the S&P 500 rose 0.2%. The tech-heavy Nasdaq composite gained 0.2% in morning action.
The 10-year Treasury yield rose on Wednesday, hitting 3.96% and on track to extend a four-day winning streak. The yield on the 10-year Treasury is approaching 4%, just like at the end of September.
Meanwhile, U.S. oil prices fell more than 1% on Wednesday, sending West Texas Intermediate futures near $88 a barrel. Oil prices continue to fall after two consecutive days of steep losses.
Stock market rally attempt
On Tuesday, the Nasdaq extended its losing streak to five sessions, down 1.1%. Four consecutive closes near session lows bring into play the possibility of a trip to the 10,000 level. This is a key support level to watch, especially since it is quite close to the Nasdaq breakout zone in June 2020.
Tuesday’s The Big Picture commented“With the Dow Jones still holding above its Sept. 30 low, Tuesday marked the seventh day of an attempted rally for the index, but the S&P 500 and Nasdaq are still awaiting day one. of their rally attempts. The S&P undercut its Sept. 30 low with Tuesday’s loss.”
The S&P 500 held just above its own recent lows. Thus, the S&P 500’s attempted rally remains intact, meaning that a potential tracking day on this index is still possible.
Before a potential follow-up day, now is the perfect time to build a strong watchlist best performing stocks. Many long-term leaders tend to break out on or near the trailing day, confirming a new uptrend. 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: Chevron, Merck
Energy giant Chevron decisively recovered its 50-day line last week as U.S. oil prices rallied. Shares are consolidating below a buy point of 182.50 ahead of the company’s earnings release on Oct. 28. Shares of Chevron fell 0.3% early Wednesday, following a decline with oil prices.
CVX Stock Boasts a strong 98 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.
Member of the Dow Jones and IBD Stock 50 Merck builds a double bottom with a 93.12 point of purchase, according IBD Pattern Recognition MarketSmith. The relative force line hit a new high on Monday, as the stock decisively recovered its main 50-day moving average. Third-quarter results are due October 27 before the opening bell.
Merck shares rose slightly on Wednesday morning. Meanwhile, biotechnology Modern (mrna) rose nearly 5% on news of its partnership with Merck to develop a melanoma treatment the companies are calling a personalized cancer vaccine.
Top stocks to watch: Cardinal, Conoco, Denbury, Vertex
IBD classification Stock market and medical leader Cardinal Health is shaping a flat base that has a buy point of 72.38, according to IBD MarketSmith graphical analysis. The stock is also in the buy range amid an initial test of its 10-week moving average, according to the rankings commentary. Earnings are expected on November 4. The shares traded down almost 2% on Wednesday.
Energy giant ConocoPhillips has again fallen under a 118.49 purchase point in a cup with handle in Tuesday’s 1% drop. The stock’s RS line hit a new high last week, illustrating strong market outperformance. Earnings are expected on November 3. Shares were down 0.2% on Wednesday, its fall coinciding with lower oil prices.
Denbury jumped 6.6% on Monday, topping the 94.05 buy point by a cup base, following reports this Exxon Mobil (XOM) is considering a recovery. Stocks are barely back in the 5% hunting zone which rises to 98.75, although the market remains in a correction. The company will report earnings on November 3. Stocks fell 0.3% on Wednesday.
Biotech leader Vertex Pharmaceuticals continues to build a flat base with a buy point of 306.05 and an early entry at 296.90. Its RS line reached a new high on Tuesday, a sign of a big stock market outperformance. VRTX stock fell 0.4% on Wednesday after the company announced it was advancing a research program into the treatment of a rare protein-based disease that can cause liver and lung damage.
Tesla Stock slipped 2.9% on Tuesday, extending a losing streak to five sessions. Shares are at their lowest level since early July and about 48% off their 52-week high. Tesla stock fell 1.5% on Wednesday morning.
The electric vehicle giant’s third-quarter results are on Oct. 19. Tesla is expected to earn $1.03 per share adjusted on sales of $22.4 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares fell 1% on Tuesday, but still hold above recent lows. Still, stocks are around 24% off their 52-week high and below their 50- and 200-day lines. Apple stock fell 0.1% on Wednesday.
Microsoft slid 1.7% on Tuesday, extending a four-session losing streak and hitting another 52-week low. The software giant is around 36% off its 52-week high. Microsoft shares were down 0.4% early Wednesday.
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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