The Dow Jones Industrial Average rallied on Thursday morning after key economic data, as Meta Platforms (META) crashed 24% and Alignment Technology (ALGN) faded 15% on earnings results. Apple’s earnings are expected after the market closes.
Meta released third quarter results late Wednesday which missed earnings estimates but slightly exceeded revenue. The company reported adjusted earnings of $1.64 per share on revenue of $27.7 billion. Analysts had expected Meta to report earnings of $1.90 per share on revenue of $27.4 billion, according to FactSet. Shares traded below 99, their lowest level since February 2016.
Align, maker of Invisalign dental devices, reported sharp declines in revenue and profit on Wednesday night.
Meanwhile, US GDP, or gross domestic product, rose 2.6% in the third quarter, beating the estimate of 2.3% and compared with a 0.6% drop in the second quarter. First-time jobless claims were also released. Claims rose to 217,000 from 214,000 the previous week, slightly below estimates.
Stock Market Today: Caterpillar, McDonald’s, Merck Earnings
Other key earnings released on Thursday were Dow Jones stocks caterpillar (CAT), McDonald’s (MCD) and Merck (M.K.R.), in the same way Ford engine (F), MasterCard (MY), O’Reilly Automotive (ORLY), ServiceNow (NOW), Shopify (STORE) and Wolfspeed (WOLF).
CAT stock jumped 5%, while McDonald’s rebounded nearly 3% and Merck climbed 2.1% in morning trading. Ford shares slipped almost 2% while Mastercard fell 1%. Shares of O’Reilly rose about 2% and shares of ServiceNow jumped 14%. Shopify jumped 3%, while WOLF stock plunged 25% in early trade.
Auto area (AZO), Cardinal Health (HAC), Eli Lily (THERE IS) and Texas Truck Stop (TXRH) — as well as the Dow Jones stock UnitedHealth Group (A H) – are among the best stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to put their watchlists into action and sharpen their pyramid technique.
Young rallies, especially those fighting bear markets, often fail. Pyramiding provides a method of gradually accessing new equity positions to minimize risk to capital.
Dow Jones Today: Treasury Yields, Oil Prices
After Thursday’s opening bell, the Dow Jones Industrial Average rose 1.3%, while the S&P 500 rose 0.3%. The tech-heavy Nasdaq composite lost 0.4% in morning action, with Align and Meta trading bottom of the list.
The 10-year Treasury yield fell to 3.97% on Thursday morning, adding to this week’s losses. On Monday, the 10-year Treasury yield closed at 4.23%, settling at its highest level since June 2008 before falling the following two sessions.
Meanwhile, US oil prices rose slightly on Thursday, on track to add to Wednesday’s gains. West Texas Intermediate futures were trading above $88 a barrel.
The stock market rally continues
On Wednesday, the Dow Jones Industrial Average soared and the S&P 500 fell 0.7%. The Nasdaq composite sold more than 2%, as Alphabet (GOOGL) and Microsoft weighed on the tech-heavy index.
Wednesday’s Big Picture commented: “With only one pronounced institutional selling session on the books, growth investors can proceed to buy excellent breakouts. However, given the fragile action seen in a number of days of tracking throughout throughout the year, it makes sense to limit exposure to both the general stock market and major stocks to between 20% and 40% of a portfolio.”
This is an important time to read IBD’s The Big Picture column. After Friday’s gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-ups work, so it’s important to increase exposure slowly and methodically as the new uptrend proves its worth.
Dow Jones stocks to buy and watch: UnitedHealth
Healthcare giant UnitedHealth is approaching 553.23 from a cup with handle point of purchase, according IBD Pattern Recognition MarketSmith. SHares were up 0.55% on Wednesday, just ahead of the headline’s last entry.
UNH stock fell slightly on Thursday morning.
Top stocks to buy and watch: AutoZone, Cardinal, Eli Lilly, Texas Roadhouse
Leader in auto parts and Recent IBD stock of the day AutoZone is still in the buy range past the 2,362.34 buy point of a cut basis, despite falling 0.7% on Wednesday. The 5% pursuit zone rises to 2,480.46. AutoZone shares traded up 1.3% on Thursday.
IBD classification Cardinal Health stock is just out of the buy range after entering 71.22 on a short cup with handle, according to IBD MarketSmith graphical analysis. Stocks are also above the buy point of 72.38 on a flat basis. Earnings are set for Nov. 4. CAH stock rose 0.6% early Thursday.
IBD Swing Trader Eli Lilly stock closed outside its buy range above the buy point of 335.43 on a flat basis, climbing 1.9% on Wednesday. Shares rose 0.2% on Thursday morning ahead of Tuesday’s earnings report.
Texas Roadhouse broke above the 95.52 buy point on a flat basis on Wednesday’s 0.7% gain. The stock was down 1.3% before the company’s results Thursday night.
Tesla Stock advanced 1% on Wednesday, up for a second consecutive session after hitting a 52-week low on Monday. Despite its recent gains, the stock closed around 46% off its 52-week high.
Shares of the electric vehicle giant rose more than 1% on Thursday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares sold 2% lower on Wednesday, ending a three-day winning streak. Stocks are running into resistance around their 50-day line, which is a key level to watch. Apple stock fell 1.1% ahead of the company’s earnings Thursday night.
The consumer tech titan is expected to earn $1.27 per share on revenue of $88.7 billion.
Microsoft plunged 7.7% on Wednesday after the company’s results. Stocks are still holding above their recent 52-week low, but have come up against sharp resistance at their 50-day line. The software giant is around 34% off its 52-week high. Microsoft shares fell 1% on Thursday morning.
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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