The Dow Jones Industrial Average plunged more than 400 points on Thursday following early jobless claims and another estimate of third-quarter gross domestic product. Chip stocks came under pressure after weak quarterly results from Micron Technology. And CarMax plunged as it signaled consumers were beginning to balk at car prices.
The Labor Department said Thursday that initial jobless claims rose to 216,000, below estimates of an increase to 225,000 from 211,000 the previous week. Additionally, the Commerce Department announced that another third-quarter GDP estimate was stronger than expected. This third estimate showed a growth of 3.2% against 2.9% for the second estimate.
On Friday, investors will turn their attention to more inflation data, with the release of personal consumption expenditure figures for November.
Micron Technology (MU) fell more than 3% on Thursday. Late Wednesday, the estimates missed by memory chip maker for its first fiscal quarter in a context of cyclical slowdown. The chip industry leader also predicted current-quarter results that were well below analysts’ views, sending chip stocks to wide early losses.
CarMax (KMX) fell 8%, after management said inflation and rising interest rates were causing “vehicle affordability issues”. The company remained well below third-quarter earnings estimates.
Chinese stocks outperformed on Thursday morning, as Hong Kong’s Hang Seng index jumped nearly 3% on promises of new growth initiatives and some easing of international tensions. Ali Baba (BABA) increased by nearly 1%, while JD.com (J.D.) was unchanged. Pinduo-duo (PDD) inch lower.
Electric vehicle giant You’re here (TSLA) fell more than 3% on Thursday. Energy giant Dow Jones Chevron (CLC) fell 0.6% Thursday morning as U.S. oil prices continued to rise. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) traded lower after today’s stock market open.
IBD classification Stock Neurocrine Biosciences (NBIX), KLA (KLAC), O’Reilly Auto Parts (ORLY) and Texas Truck Stop (TXRH) – as well as the Dow Jones names Amgen (AMGN), caterpillar (CAT) and Home deposit (High Definition) – are among the most important stocks to consider for investor watchlists. Keep in mind that recent market weakness should keep investors on the defensive.
Dow Jones Today: Oil Price, Treasury Yields
After Thursday’s opening bell, the Dow Jones Industrial Average fell 1.3%, while the S&P 500 fell 1.6%. The tech-heavy Nasdaq composite lost 2.2% in morning action.
The 10-year Treasury yield fell to 3.67% on Thursday morning, on pace with a three-day winning streak.
Meanwhile, U.S. oil prices rose nearly 2% on Thursday, as West Texas Intermediate futures hit nearly $80 a barrel in morning trading.
Stock market rally under pressure
On Wednesday, the stock market posted a strong performance, with the Dow Jones Industrial Average rebounding 1.6%. The S&P 500 and the Nasdaq composite both rose 1.5%.
Wednesday’s The Big Picture column commented: “Meanwhile, the fresh rally attempt faces another test of inflation data on Friday. three-day Christmas holiday will keep a close eye on November’s personal consumption expenditure figures.”
This is an important time to read IBD’s The Big Picture column amid ongoing stock market volatility.
Dow Jones stocks to watch: Amgen, Caterpillar, Home Depot
Drugmaker Amgen is building a new flat base after a big breakthrough in mid-November. But stocks are below their 50-day line after steep losses in recent weeks. For now, the correct buy point is 296.77, but the stock must first decisively resume its 50-day run. AMGN stock traded down 0.8% on Thursday.
Dow Jones member Caterpillar broke above a buy point of 239.95 in a flat basis, according to IBD Pattern Recognition MarketSmith, on Wednesday’s breakout of 2.8%. On the upside, the stock’s relative strength line, a key technical indicator, hit a new high. CAT stock fell 1.1% on Thursday.
Home improvement retailer The Home Depot is around 4% below the 329.77 buy point for a base cup with handle after reversing last week’s breakout move. HD stock traded up 1.6% on Thursday morning.
Top stocks to watch: KLA, Neurocrine, O’Reilly, Texas Roadhouse
Chip equipment leader KLA reclaimed entry of 392.60 from its cup with handle during Wednesday’s 2.8% advance. KLA shares traded down 3.9% on Thursday.
IBD classification Stock Neurocrine rallied for a fourth consecutive session on Wednesday, gaining 1% and continuing to rebound from support at its 50-day level. A strong rally is bullish for the stock’s immediate outlook and would likely lead to the formation of a new base. NBIX stock added 0.4% on Thursday.
O’Reilly Auto Parts is also finding much-needed support on its 50-day line this week and remains squarely above a flat base entry of 750.98. A big bounce off the 50-day line could bring a follow-on entry point, but the uptrend in the market is currently under pressure, increasing the risk of buying stocks. ORLY shares plunged 1% on Thursday.
Texas Roadhouse is showing a new buy point at 101.85, but is now consolidating below its 50-day line. The IBD Leaderboard stock will look to recover this key benchmark over the next few days. TXRH stock was trading down 1.1% on Thursday morning.
Stocks to Watch
These 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||Basic type|
|KLA||(KLAC)||392.60||Mug with handle|
|Texas Truck Stop||(TXRH)||101.85||Flat bottom|
|Home deposit||(High Definition)||329.77||Mug with handle|
Source: IBD data as of December 21, 2022
Tesla Stock fell 0.2% on Wednesday, extending a losing streak to four sessions and hitting another 52-week low. Shares lost more than 3% on Thursday morning, marking a new 52-week low at 132.28.
On Wednesday, TSLA stock hit a new 52-week low, trading as low as 135.89. Shares closed about 66% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares jumped 2.4% on Wednesday, ending a five-day losing streak. The stock remains close to its 52-week low, which was set on June 16 at 129.04. The stock is about 26% off its 52-week high. The shares traded down 1.5% on Thursday.
Microsoft rose 1.1% on Wednesday, rising for a second straight day and again topping its 50-day line. The software giant remains around 30% off its 52-week high. MSFT stock was down 1.6% early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
YOU MIGHT ALSO LIKE: