The Dow Jones Industrial Average rose on Wednesday ahead of the Federal Reserve’s interest rate decision this afternoon, followed by a press conference with Fed Chairman Jerome Powell. best buy (BBY) fell more than 3% after a Bank of America downgrade.
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Fed decision, Powell comments
The Two-day Fed policy meeting ends Wednesday. A decision on interest rates is expected at 2 p.m. ET, followed by comments from Fed chief Powell at 2:30 p.m.
The Fed has signaled that it will slow the pace of rate hikes this meeting, with widespread expectations of a half-point rate hike in the 4.25% to 4.5% range. However, it is unclear to what extent Tuesday’s softer-than-expected November CPI inflation report could potentially affect the Fed’s rate hike outlook.
It may not make much of a difference, but investors will be watching Jerome Powell’s comments carefully, following signals that the Fed may be changing its stance on inflation. According to CME’s FedWatch tooltraders are placing a 79% chance of a 50 basis point rate hike.
Early Tuesday, REV Group (REVG) and Weber (WEBR) released their quarterly results. REVG stock climbed 18%, while Weber stock rose less than 1%. Other earnings reports this week include Dard Restaurants (DRI) and Lennar (LEN).
Best Buy shares fell more than 3% after Bank of America downgraded the stock to underperform from neutral, with a new price target at 69, from 80. Delta Airlines (LAD) jumped more than 3% after raising its fourth-quarter forecast and issuing an upbeat outlook for fiscal 2022 and 2023.
Electric vehicle giant You’re here (TSLA) was trading down almost 2% on Wednesday. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) were shuffled after today’s stock market open.
Allegro Microsystems (ALGM), IBD classification Stock Dexcom (DXCM), KLA (KLAC) and United rentals (URI) – as well as the Dow Jones names caterpillar (CAT), Home deposit (HD) and UnitedHealth Group (A H) – are among the best stocks to buy and watch.
Dexcom and Trane are IBD classification shares. UnitedHealth has been presented in this week Stocks Near Buy Zone column. Allegro was a recent IBD 50 Stocks to Watch. Caterpillar, United Rentals and Dexcom were recent IBD stock of the day businesses.
Dow Jones Today: Oil Price, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.5%, while the S&P 500 rose 0.45%. The tech-heavy Nasdaq composite gained 0.4% in morning action, with Charter Communications (CHTR) plunging more than 8% down the index. A handful of analysts cut their price target on Charter after the company raised its 2023 capital spending forecast on Tuesday.
Among exchange traded fundsthe Nasdaq 100 Invesco QQQ Trust tracker (QQQ) fell 0.1% and the SPDR S&P 500 ETF (TO SPY) rose 0.1% early Wednesday.
The 10-year US Treasury yield was little changed at 3.51% on Wednesday morning ahead of the Fed’s rate decision. The 10-year Treasury yield fell on Tuesday cool CPI inflation data.
Meanwhile, U.S. oil prices rose about 1% on Wednesday morning, after the International Energy Agency and the Organization of the Petroleum Exporting Countries forecast a rebound in demand over the coming year. West Texas Intermediate futures settled at $75.39 a barrel on Tuesday.
Stock market rally
The stock market ended with moderate gains on Tuesday, but major equity indices closed far from their intraday highs. The Nasdaq composite rose 1%, the S&P 500 added 0.7% and the Dow Jones Industrial Average climbed 0.3%.
Tuesday’s The Big Picture column commented: “But the stock market sent a clear message on Tuesday that it is still worried about a recession next year. Inflation is still far too high for the Fed, which still faces a labor market extremely tight and low unemployment. The Fed wants to see some softness in the labor market to help it fight inflation.”
This is an important time to read IBD’s The Big Picture column amid ongoing stock market volatility.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: Caterpillar, Home Depot, UnitedHealth
Caterpillar, member of the Dow Jones, continues to move away from the 238 of a cutting basis point of purchase, according IBD Pattern Recognition MarketSmithin the wake of Tuesday’s 1% rise. cat stock shows a solid 95 out of a perfect IBD composite score of 99, according to the IBD inventory check. CAT stock rose 0.2% on Wednesday.
Home improvement retailer The Home Depot ended Tuesday in a buy range above the 329.77 buy point of a cup-with-handle base after the day’s breakout. HD stock traded a fraction higher on Wednesday morning.
Healthcare giant UnitedHealth Group is charting a flat base that has a buy point of 558.20. The shares are only 3% away from the last entry. UNH stock rose 0.4% on Wednesday morning.
4 growth stocks to watch in the currentrStock market rally
Top stocks to buy and watch: Allegro, Dexcom, KLA, United Rentals
Allegro Microsystems ended Tuesday in the buy range past the 32.07 buy point of a cup with handle after the day’s 1.5% gain. ALGM stock traded down 0.3% on Wednesday.
IBD classification Dexcom stock is trying to break above a buy point of 123.46 in a flat basis and sits just below entry amid Tuesday’s 2.4% rally. Dexcom Stock was up 0.1% on Wednesday morning.
Chip leader KLA is at the top of the 5% buy range after a cup-with-handle entry of 392.60 after Tuesday’s 2% advance. The 5% pursuit zone rises to 412.23. On the upside, the relative strength line continues to reach new highs in the current market volatility. UCK shares were down 0.3% on Wednesday.
United Rentals is trying to break above a buy point of 368.04 in a cup with handle model, according to IBD MarketSmith analysis. Shares rose above the entry on Tuesday before closing just below. URI store was up 0.2% on Wednesday.
Stocks to buy and watch
These are the top seven stocks to buy and watch in today’s stock market, including three leaders from the Dow Jones.
| Company Name | Symbol | Correct point of purchase | Basic type |
|---|---|---|---|
| Allegro Microsystems | (ALGM) | 32.07 | Mug with handle |
| Dexcom | (DXCM) | 123.46 | Flat bottom |
| KLA | (KLAC) | 392.60 | Mug with handle |
| United rentals | (URI) | 368.04 | Mug with handle |
| caterpillar | (CAT) | 238.00 | Cup |
| Home deposit | (HD) | 329.77 | Mug with handle |
| UnitedHealth | (A H) | 558.20 | Flat bottom |
Source: IBD data as of December 13, 2022
Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live
Tesla Stock
Tesla Stock slipped 4.1% on Tuesday, falling sharply for a second straight day and hitting a new 52-week low. Shares traded down 1.8% on Wednesday morning, threatening to extend a losing streak to three days. Early Wednesday, Goldman Sachs cut its price target from 305 to 235, citing weaker demand.
On Tuesday, TSLA stock hit its lowest level since Nov. 18, 2020, hitting a new 52-week low at 156.91. Shares closed around 60% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares rebounded 0.7% on Tuesday, just above their key 50-day line. The 50-day line, which had been a key support level, has become a resistance area to watch. The stock is around 20% off its 52-week high. Apple shares fell 0.1% on Wednesday.
Microsoft jumped 1.75% on Tuesday as stocks now test their long-term 200-day line. The software giant remains around 25% off its 52-week high. Microsoft shares rose 0.6% on Wednesday 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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