The Dow Jones Industrial Average fell on Wednesday ahead of the minutes of the Federal Reserve’s latest policy meeting. Tesla shares race higher after Citigroup boosts EV giant.
Before the Fed’s Minutes are released at 2pm ET, consumer sentiment, durable goods orders, first jobless claims, purchasing managers’ index readings and new home sales are all out in the morning. Stock markets will be closed Thursday for the Thanksgiving holiday, followed by a shortened trading session on Friday.
Initial jobless claims, out at 8:30 a.m. ET, jumped to 240,000 vs. 222,000 in the previous week. Meanwhile, durable goods rose 1% in October, higher than the Econoday estimate of 0.4%.
Autodesk shares fell 9%, while HPQ shares fell 3.5% in morning trading. Nordstrom shares fell 9.5%. And Deere shares jumped 3% in morning trading.
IBD Leaderboard stock Arista Network (SIDE), KLA (CLUTCH), Shoals Technology (SHLS) and Ulta Beauty (birthday) – also the name of Dow Jones caterpillar (CAT) – is among the top stocks to buy and watch.
Arista Networks is IBD Leaderboard His stock was the latest IBD Stocks Today. Ulta Beauty featured in this week’s Stocks Near A Buy Zone column. The shoals were Thursday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Oil Prices, Treasury Yields
After the opening bell on Wednesday, the Dow Jones Industrial Average fell 0.1%, while the S&P 500 fell 0.1%. The tech-heavy Nasdaq composite traded up less than 0.1% in morning action.
China-related stocks showed early strength, after news reports said the State Council had announced pending stimulus measures, including cuts to the reserve requirement ratio for Chinese banks.
The 10-year Treasury yield ticked down to 3.73% Wednesday morning.
Oil stocks are under some pressure as oil prices retreated after Tuesday’s rebound. West Texas Intermediate futures fell more than 3%, down to $79 a barrel despite industry data showing US crude stockpiles fell more sharply than expected last week. Official weekly oil inventory data will come out from the EIA at 10:30 a.m. ET.
Natural gas stocks get a boost as gas prices continue to rise. US natural gas futures leapt nearly 7% after Russia warned after Russia accused Ukraine of stealing gas from the pipeline, and threatened to limit deliveries in Russia’s last supply line to Europe.
Stock Market Rally
Tuesday, the stock market posted solid gains. The S&P 500 and Nasdaq composite each rallied 1.4%. The Dow Jones Industrial Average rose 1.2%.
Tuesday’s The Big Picture commented, “While it’s nice to put money to work in the stock market now, keep your exposure on the conservative side with a small position to start. Just because the stock market is in a confirmed uptrend doesn’t mean you have to be 100% invested. And don’t be afraid to take a 10% profit if you have it, given the volatile nature of the market.”
Now is an important time to read IBD’s The Big Picture column Amid the ongoing stock market volatility.
Dow Jones Stocks to Buy and Watch: Caterpillar
Dow Jones member Caterpillar is close to regaining its trophy base of 238 buy points, according to MarketSmith’s IBD pattern recognition, and is less than 1% below the entry. CAT gained 0.1% on Wednesday, trading higher with Deere. Stocks are still below their buy point.
Top Stocks to Buy and Watch: Arista, KLA, Shoals, Ulta
KLA closed in the cup-with-handle of 392.60 points Toko Ditema climbed 2.7% on Tuesday. Bullishly, the stock’s relative strength line hit a new high last week, a sign of big outperformance vs. the S&P 500. KLAC stock was down 0.5% on Wednesday.
Shoals Technologies is still out of the buy range past a 28.57 buy point after a third straight decline on Tuesday. The 5% buy zone tops out at 30. Wait for a nurse pullback into the buy range before considering a stock buy. SHLS shares rose 1% early Wednesday.
Ulta Beauty moved out of the buying range on Tuesday, rising almost 2%. Buy zone 5% past the buy point 426.99 in one cup with handle flow up to 448.34. Ulta reported third quarter results on December 1. Shares traded down 0.3% on Wednesday.
Tesla shares rose 1.2% Tuesday, snapping a four-day losing streak that saw the stock hit its lowest level since November 23, 2020. The stock hit a new 52-week low Monday at 167.54. Tesla shares are about 57% off their 52-week highs and below their 50- and 200-day moving averages.
Shares of the EV giant traded up 2.1% Wednesday morning after Citigroup upgraded the stock from sell to neutral, raising the price target from 141.33 to 176.
Dow Jones Leaders: Apple, Microsoft
In between Dow Jones stocks, Apple shares rebounded 1.5% on Tuesday and are still holding above their recently recaptured 50-day line. The stock is about 20% off its 52-week high. The stock traded down 0.3% on Wednesday, as Foxconn workers clashed with police officers. Foxconn is the largest iPhone assembly plant in China.
Microsoft rose 1.2% Tuesday, adding to Monday’s gains. Stocks continue to hold above the 50-day line. The software giant remains more than 30% off its 52-week high. Microsoft shares fell 0.1% Wednesday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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