The Dow Jones Industrial Average rose Wednesday ahead of economic data, with a new housing report and a Fed manufacturing index on the way. Tesla shares hit another new low before bouncing sharply, seeking a small bite from their historic plunge in December.
Wednesday’s economic data includes the Pending Home Sales Index and the Richmond Fed Manufacturing Index. The Richmond Fed probably won’t lead to much stock action.
But in anticipation of November home sales, homebuilder stocks could move, as evidenced recently increasing signs of strength. According to Econoday estimates, home sales pending the National Association of Realtors are expected to fall 0.5% in November, after falling 4.6% in October.
Case Shiller reported that on Tuesday house prices fell in October for the fourth consecutive month, as higher mortgage rates continue to dampen demand. The Case Shiller house price index for November is expected at the end of January.
Meanwhile, the Richmond, Va., index for the Federal Reserve’s Fifth District Survey of Manufacturing Activity is expected to be -6 for December, slightly better than November’s -9 reading. The survey measures manufacturing activity in the region bordered by Maryland, South Carolina and West Virginia.
In terms of revenue, chicken egg distribution giant Cal-Maine Foods (CALM) will report Wednesday after the close. CALM shares are in the buy range past a buy point of 62.74 after strong gains in recent weeks.
Leader of electric vehicles Tesla (TSLA) reversed higher on Wednesday, rising more than 6% as Baird reaffirmed its outperform rating for the stock despite a price target cut, and following Wedbush forecasts, the automaker was likely to fall short of its fourth-quarter estimates. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) traded higher thereafter today’s stock market Open.
Cardinal Health (CAH), Medtempo (MEDP), IBD ranking stock Neurocrine Biosciences (NBIX) and Texas Roadhouse (TXRH) – as well as Dow Jones names Amgen (AMGN), Caterpillar (CAT) and Chevron (CVX) — are among the top stocks to consider for investor watchlists. Keep in mind that the recent market weakness should keep investors on the defensive.
Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 rose 0.4%. The tech-heavy Nasdaq composite gained 0.5% in the morning action.
The 10-year Treasury yield fell to 3.80% on Wednesday morning, with the yield fighting to hold its 50-day mark after two weeks of sharp gains. Meanwhile, US oil prices traded slightly lower on Wednesday as West Texas Intermediate futures met resistance just above $79 a barrel after a two-week run.
Stock market rally under pressure
On Tuesday, the Dow Jones Industrial Average rose 0.1%, while the S&P 500 fell 0.4%. The tech-heavy Nasdaq composite sold 1.4%.
Tuesday’s Big Picture column noted: “The stock market began a shortened trading week on Tuesday with mixed results as rising bond yields fueled more sales in the technology sector. Historically, the last trading week of the year is usually a good one for the stock market. But with the market uptrend under pressure, sellers still dictate the action.”
Dow Jones stocks to watch: Amgen, Caterpillar, Chevron
Drugmaker Amgen continues to track a flat base amid a three-week losing streak. And stocks are further below their 50-day line after more losses Tuesday. For now, the correct buy point is 296.77, but the stock must recapture its decisive 50 days. AMGN shares were up 0.4% on Wednesday.
Dow Jones member Caterpillar finished in the 5% chase zone past a buy point of 239.95 in a flat base Tuesday, according to IBD MarketSmith pattern recognition. The buying area goes up to 251.95. Bullish, the stock’s relative strength line, a key technical indicator, is at new highs. The CAT share rose 0.1% on Wednesday.
Energy giant Chevron came firmly above its 50-day line during Tuesday’s 1.3% rally, moving to the right of a flat base with a buy point of 189.78. CVX shares fell 0.5% Wednesday morning, in line with oil prices.
Top stocks to watch: Cardinal Health, Medpace, Neurocrine
cardinal health, a recent IBD Stock Of The Day, holding close to a buy point of 81.67 in a flat base. Shares fell 1.1% on Tuesday. CAH shares were up slightly on Wednesday.
Medpace bounced sharply off its 50-day line last week, gaining 3.3%. But the stock gave up much of that gain during Tuesday’s 2% drop. For now, the right buy point looms at 235.82, but an earlier entry at 220.09 is also in play. MEDP shares rose 0.1% on Wednesday.
IBD ranking Shares of Neurocrine fell 1.15% on Tuesday, retesting support around the 50-day level. A recent bounce from that 50-day line was upbeat for the stock’s outlook, but now the stock is once again testing that key area. Shares of NBIX fell a fraction on Wednesday.
Texas Roadhouse shows a new buy point at 101.85 in a flat base, but is now consolidating below the 50-day line. The restaurant leader will try to recover that important benchmark in the coming sessions, but Tuesday’s 2.2% drop was a warning sign. The share of TXRH was 0.3% higher on Wednesday morning.
Stocks to watch
Here are six top stocks to watch in today’s stock market, including three Dow Jones leaders.
|Company Name||Symbol||Correct point of sale||Base type|
|Cardinal Health||(CAH)||81.67||Flat base|
|Texas Roadhouse||(TXRH)||101.85||Flat base|
Source: IBD data as of December 28, 2022
Tesla stock plunged another 11.4% on Tuesday, extending a streak of losses to seven sessions and hitting another 52-week low of 108.76. Stocks closed about 73% from their 52-week high.
Shares hit another new low at 108.24 Wednesday morning before moving higher and rising more than 6%. TSLA stock will drop 44% in the month of December, its worst monthly performance ever, according to Dow Jones Market Data.
Early Wednesday, Baird lowered his price target for the EV giant from 316 to 252, but that’s still more than 130% higher than where the shares closed on Tuesday. The note maintained Tesla’s outperform rating and recommended it as a “Best Buy” stock for 2023.
Dow Jones leaders: Apple, Microsoft
Amid Dow Jones StocksApple shares sold off 1.4% on Tuesday, losing after hitting a new 52-week low at 128.72. The stock is about 30% lower than its 52-week high. Shares gained 0.5% on Wednesday.
Microsoft shares fell 0.7% on Tuesday, falling further below the 50-day mark. The software giant is about 31% off its 52-week high. MSFT shares rose 0.7% early Wednesday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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