The Dow Jones Industrial Average rose on Wednesday after the economic data, with another housing report and a manufacturing index from the Fed. Tesla stock hit a new low before rebounding sharply, seeking to recover a small portion of its historic December plunge.
Wednesday’s economic data includes the Richmond Fed’s Pending Home Sales Index and Manufacturing Index. The Richmond Fed is not expected to generate much stock market action.
But November’s pending home sales could move homebuilder stocks, which recently showed increased signs of strength. According to Econoday estimates, pending home sales from the National Association of Realtors fell 4% in November, much worse than the expected 0.5% decline.
On Tuesday, Case Shiller reported that house prices fell in october for the fourth month in a row, with rising mortgage rates continuing to dampen demand. The Case Shiller home price index for November is due out at the end of January.
Meanwhile, the Richmond, Va., index for the Federal Reserve’s Fifth District survey of manufacturing activity posted a reading of 1 for December, higher than the expected reading of -6 and the reading from -9 of November. The survey measures manufacturing activity in the region bordered by Maryland, South Carolina and West Virginia.
On the profit side, the chicken egg distribution giant Cal Maine Foods (CALM) will report Wednesday after the close. CALM stock is in the buy range past a buy point of 62.74 after strong gains in recent weeks.
Leader in electric vehicles You’re here (TSLA) reversed higher on Wednesday, rallying more than 4% as Baird affirmed its outperform rating on the stock, despite a price target cut, and after Wedbush forecast the automaker would miss probably its fourth-quarter estimates. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) traded higher after today’s stock market open.
Cardinal Health (HAC), Medpace (MEDP), IBD classification Stock Neurocrine Biosciences (NBIX) and Texas Truck Stop (TXRH) – as well as the Dow Jones names Amgen (AMGN), caterpillar (CAT) and Chevron (CLC) – 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 Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.1%, while the S&P 500 rose 0.15%. The tech-heavy Nasdaq composite gained 0.2% in morning action.
The 10-year Treasury yield fell to 3.80% on Wednesday morning, with the yield struggling to maintain its 50-day line after two weeks of strong gains. Meanwhile, U.S. oil prices edged lower on Wednesday as West Texas Intermediate futures hit resistance just above $79 a barrel after a two-week advance.
Stock market rally under pressure
On Tuesday, the Dow Jones Industrial Average edged up 0.1%, while the S&P 500 fell 0.4%. The tech-heavy Nasdaq composite fell 1.4%.
Tuesday’s The Big Picture column commented: “The stock market kicked off a shortened trading week on Tuesday with a mixed performance as rising bond yields fueled more selling in the tech sector. Historically, the last trading week of the year is generally good for the stock market. But with the uptrend of the market under pressure, sellers are still dictating the action.”
Dow Jones stocks to watch: Amgen, Caterpillar, Chevron
Drugmaker Amgen continues to chart a flat base amid a three-week losing streak. And stocks are still below their 50-day line after further losses on Tuesday. For now, the correct buy point is 296.77, but the stock must first decisively resume its 50-day run. AMGN stock traded down 0.4% on Wednesday.
Dow Jones member Caterpillar ended in the 5% hunting zone after buying 239.95 in a flat base on Tuesday, according to IBD MarketSmith Pattern Recognition. The buy zone rises to 251.95. On the upside, the stock’s relative strength line, a key technical indicator, hits new highs. CAT stock rose 0.1% on Wednesday.
Energy giant Chevron decisively breached its 50-day line in Tuesday’s 1.3% rally, moving up the right side of a flat base that has a buy point of 189.78. CVX stock was down 0.5% on Wednesday morning, in line with oil prices.
Main stocks to watch: Cardinal Health, Medpace, Neurocrine
Cardinal Health, a recent IBD stock of the day, stands near a buy point of 81.67 in a flat base. Shares fell 1.1% on Tuesday. CAH stock was up slightly on Wednesday.
Medpace rebounded strongly from its 50-day line last week, gaining 3.3%. But the stock gave away much of those gains in Tuesday’s 2% plunge. For now, the correct buy point lies at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock rose 0.1% on Wednesday.
IBD classification Neurocrine stock fell 1.15% on Tuesday, retesting support around its 50-day level. A recent bounce off this 50-day line was bullish for the stock’s outlook, but now the stock is testing this key area again. NBIX stock fell a fraction on Wednesday.
Texas Roadhouse is showing a new buy point at 101.85 in a flat basis, but is now consolidating below its 50-day line. The restaurant chief will look to reclaim this key benchmark over the coming sessions, but Tuesday’s 2.2% drop was a warning sign. TXRH stock was trading down 0.3% on Wednesday morning.
Stocks to Watch
These are the top six stocks to watch in today’s stock market, including three leaders from the Dow Jones.
|Company Name||Symbol||Correct point of purchase||Basic type|
|Cardinal Health||(HAC)||81.67||Flat bottom|
|Texas Truck Stop||(TXRH)||101.85||Flat bottom|
Source: IBD data as of December 28, 2022
Tesla Stock slumped another 11.4% on Tuesday, extending a losing streak to seven sessions and hitting another 52-week low at 108.76. Shares closed about 73% off their 52-week high.
Shares hit a new low on Wednesday morning at 108.24 before reversing higher and rising more than 4%. TSLA stock is expected to plunge 44% for the month of December, its worst monthly performance on record, according to Dow Jones Market Data.
Early Wednesday, Baird cut its price target on the electric vehicle giant from 316 to 252, but it’s still more than 130% above where the shares closed on Tuesday. The rating maintained Tesla’s outperform rating and recommended it as a “Best Buy” stock for 2023.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares sold 1.4% on Tuesday, paring losses after hitting a fresh 52-week low at 128.72. The stock is around 30% off its 52-week high. Shares gained 0.5% on Wednesday.
Microsoft stock fell 0.7% on Tuesday, falling further below the 50-day line. The software giant is around 31% off its 52-week high. MSFT stock rose 0.7% 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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