The Dow Jones Industrial Average rose ahead of economic data on Wednesday, with another housing report and Fed manufacturing index due. Tesla stock hit another new low before staging a strong recovery, trying to recover a small part of its historic December plunge.
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Wednesday’s economic data includes the Richmond Fed’s Pending Home Sales Index and Manufacturing Index. The Richmond Fed is unlikely to stimulate much stock action.
But home sales coming up in November could move stocks in construction companies, which have shown increasing signs of strength lately. According to Econoday estimates, the National Association of Realtors’ pending home sales are expected to fall 0.5% in November, after a 4.6% drop in October.
On Tuesday, Case Shiller reported that house prices fell for a fourth straight month in October as higher mortgage rates continue to dampen demand. Case Shiller’s November home price index is due in late January.
Meanwhile, the Richmond, Virginia index for the Federal Reserve’s Fifth District Survey of Manufacturing Activity is expected to return -6 for December, slightly better than November’s -9 reading. The survey measures manufacturing activity in the region, which borders Maryland, South Carolina and West Virginia.
On the earnings front is the chicken egg distribution giant Cal Maine Foods (CALM) will report after the market close on Wednesday. CALM stock is in the buy range beyond a buy point of 62.74 after strong gains over the past few weeks.
Market leader in electric vehicles Tesla (TSLA) reverted higher on Wednesday, climbing more than 6% as Baird reiterated its outperform rating on the stock despite cutting its target price and after Wedbush forecast the automaker likely to miss its fourth-quarter estimates would. Dow Jones technology leader Apple (AAPL) and Microsoft (MSFT) traded higher after the market open today.
cardinal health (CAH), Medpace (MEDP), IBD Leaderboard Stock Neurocrine Life Sciences (NBIX) and Texas Roadhouse (TXRH) – as well as Dow Jones names amgen (AMGN), Caterpillar (CAT) and rafters (CVX) – are among the top stocks to consider for investors’ watch lists. Keep in mind that recent market weakness should put investors on the defensive.
Neurocrine is an IBD Leaderboard stock. Caterpillar and Medpace were the most recent IBD Stock Of The Day companies. And Cardinal Health is featured in this week’s “Stocks Near a Buy Zone” column.
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Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average was up 0.3%, while the S&P 500 was up 0.4%. The tech-heavy Nasdaq Composite gained 0.5% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.5% and SPDR S&P 500 ETF (SPY) was up 0.4% early Wednesday.
The 10-year Treasury yield fell to 3.80% on Wednesday morning, with the yield struggling to hold its 50-day moving average after two weeks of strong gains. Meanwhile, US oil prices traded slightly lower on Wednesday as West Texas Intermediate futures hit resistance just above $79 a barrel after a two-week surge.
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 lost 1.4%.
Tuesday’s The Big Picture column commented: “The stock market started a shortened trading week on Tuesday with a mixed performance as rising bond yields led to more selling in the technology sector. Historically, the last trading week of the year is usually good for the stock market. But with the market uptrend under pressure, the sellers are still dictating what’s happening.”
Five Dow Jones stocks to buy and watch
Eyes on Dow Jones stocks: Amgen, Caterpillar, Chevron
Drugmaker Amgen continues to track a flat base amid a three-week losing streak. And shares remain below their 50-day moving average after further losses on Tuesday. Right now, the right buy point is 296.77, but the stock needs to decisively retrace its 50-day mark first. AMGN shares rose 0.4% on Wednesday.
Dow Jones constituent Caterpillar ended Tuesday in the 5% tracking zone behind a buy point of 239.95 on a flat basis, according to pattern recognition by IBD MarketSmith. The buy range goes to 251.95. On an optimistic note, the stock’s relative strength line, a key technical indicator, is at fresh highs. CAT shares rose 0.1% on Wednesday.
CAT stocks show strong 98 out of 99 perfect IBD Composite Ratings according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Energy giant Chevron moved decisively above its 50-day moving average during Tuesday’s 1.3% rally, moving up on the right side of a flat base with a buy point of 189.78. CVX shares fell 0.5% Wednesday morning, falling in line with oil prices.
4 Top Growth Stocks to Watchrightde Stock market rally
Top stocks to watch: Cardinal Health, Medpace, Neurocrine
Cardinal Health, a recent IBD stock of the day, is holding near a buy point of 81.67 on a flat basis. Shares fell 1.1% on Tuesday. CAH stock was up slightly on Wednesday.
Medpace rebounded sharply from its 50-day moving average last week, up 3.3%. But the stock gave up much of those gains during Tuesday’s 2% decline. Right now, the right buy point is 235.82, but an earlier entry at 220.09 is also in play. MEDP shares rose 0.1% on Wednesday.
IBD leaderboard stock Neurocrine slipped 1.15% on Tuesday, retesting support around its 50-day level. A recent bounce off this 50-day moving average was optimistic about the stock’s prospects, but now the stock is retesting this key area. NBIX stock fell a fraction on Wednesday.
Texas Roadhouse shows a new buy point at 101.85 on a flat basis but is now consolidating below its 50-day moving average. The restaurant manager will look to regain this key benchmark in the coming sessions, but Tuesday’s 2.2% drop was a cautionary tale. TXRH shares were up 0.3% on Wednesday morning.
stocks to look at
These are six top stocks to watch in today’s stock market, including three top Dow Jones stocks.
| Name of the company | symbol | Correct purchase point | type of base |
|---|---|---|---|
| cardinal health | (CAH) | 81.67 | flat base |
| Medpace | (MEDP) | 235.82 | consolidation |
| Texas Roadhouse | (TXRH) | 101.85 | flat base |
| Caterpillar | (CAT) | 239.95 | flat base |
| rafters | (CVX) | 189.78 | flat base |
| amgen | (AMGN) | 296.77 | flat base |
Source: IBD data as of December 28, 2022
Join IBD experts as they analyze leading stocks from the current stock market rally on IBD Live
Tesla stock
Tesla shares tumbled 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% below their 52-week high.
Shares hit another fresh low on Wednesday morning at 108.24 before reversing higher and gaining more than 6%. According to Dow Jones Market Data, TSLA stock will plummet 44% for the month of December, its worst monthly performance on record.
Early Wednesday, Baird cut its price target on the EV giant to 252 from 316, but that’s still more than 130% off where shares closed on Tuesday. The note retained Tesla’s Outperform rating and recommended it as a “Best Buy” stock for 2023.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares sold off 1.4% on Tuesday, erasing losses after hitting a fresh 52-week low of 128.72. The stock is down about 30% from its 52-week high. Shares gained 0.5% on Wednesday.
Microsoft shares fell 0.7% on Tuesday, further falling below the 50-day moving average. The software giant is down about 31% from its 52-week high. MSFT shares were up 0.7% early Wednesday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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