The Dow Jones Industrial Average fell Thursday morning after the Labor Department’s weekly jobless claims data. Meanwhile, the pivotal September payroll report is due out Friday morning.
Conagra (CAG), Constellation Brands (STZ) and McCormick (MKC) are key earnings reporters Thursday. Conagra rallied more than 2%, while Constellation fell 1% in morning trade. And McCormick shares were up more than 5% despite missing Q3 earnings and sales targets.
Peloton Interactive (PTON) rose less than 1% after the company said it plans to cut about 500 jobs, or roughly 12% of its remaining workforce. Chief Executive Barry McCarthy said the company has six months to prove it can survive on its own. Shares are more than 90% off their 52-week high.
Electric-vehicle leader Tesla (TSLA) traded 0.5% higher Thursday, as Mizuho lowered its price target on the stock from 391.67 to 370. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were mixed after today’s stock market open.
As the stock market continues to search for a bottom, Cummins (CMI), Murphy USA (MUSA), Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Despite this week’s gains, the market’s status remains “in correction,” and investors should remain on the defensive.
Vertex is a recent addition to IBD Leaderboard. Cummins is an IBD SwingTrader stock. Murphy USA was featured in this week’s Stock Near A Buy Zone column, along with three other top stock ideas. World Wrestling was a Stock Of The Day on Thursday. Neurocrine was a Stock Of The Day on Sept. 26.
Dow Jones Today: Treasury Yields, Oil Prices, Jobless Claims
After Thursday’s opening bell, the Dow Jones Industrial Average declined 0.3%, while the S&P 500 fell 0.1%. The tech-heavy Nasdaq composite rose 0.2% in morning action.
The 10-year Treasury yield ticked higher to 3.77% Thursday morning. The 10-year Treasury yield fell as low as 3.56% this week before rebounding. Last week, the 10-year Treasury yield briefly topped 4%, which hadn’t been done for more than decade.
Meanwhile, U.S. oil prices gave up small part of their recent gains, easing Thursday, with West Texas Intermediate futures still holding above $87 a barrel. Last week, oil fell to its lowest level of the year — around $76 a barrel — before rebounding. On Wednesday, OPEC+ agreed to slash production by up to 2 million barrels a day, the biggest cut since the start of the pandemic.
The Labor Department’s first-time unemployment claims came out at 8:30 a.m. ET. Initial claims rose to 219,000, above estimates that called for a rise to 203,000 from 193,000 in the previous week, according to Econoday.
Stock Market Rally Attempt
On Wednesday, the Nasdaq cut losses to just 0.3%, while the S&P 500, a 1.8% loser in the early going, managed to whittle that decline to less than 0.2%. The Dow Jones Industrial Average, rising a combined 5.5% over Monday and Tuesday’s sessions, inched 0.1% lower.
Wednesday’s The Big Picture cautioned, “Certainly, upcoming inflation data will get extra attention later this month. But in the near term, investors will now digest another steady flow of third-quarter results. This news will give fund managers more clues to how much high inflation, and a definite slowdown in the U.S. economy, is affecting profits, perhaps the No. 1 factor in stock prices.”
Monday’s market advance kicked off a new rally attempt, which was your Day 1. The action on Day 2 and Day 3 is irrelevant as long as the index doesn’t undercut its latest low, from Friday. If that low is undercut, however, the rally attempt is done and the market continues to search for a bottom.
Next, on Day 4 or later, investors should be waiting for a follow-through day. Starting Thursday (Day 4), you are looking for the Nasdaq or S&P 500 to rise sharply in higher volume than the previous session. A large enough rise in climbing volume marks a follow-through day. That would give investors the green light to start buying leading stocks breaking out past correct buy points.
Now, ahead of a potential follow-through day, is the perfect time to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market bottoming signal. Missing that early opportunity can be a costly mistake.
Dow Jones Stocks To Watch: UnitedHealth
Dow Jones stock UnitedHealth advanced 0.75% Wednesday, extending a win streak to three sessions and closing just below the key 50-day line. Shares are building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. UNH stock fell 0.5% Thursday morning.
UNH stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics. UnitedHealth reports its third-quarter results on Oct. 14.
Top Stocks To Watch: Cummins, Murphy USA, Neurocrine, Vertex, WWE
Cummins is moving rapidly up the right side of a cup base that has a 233.95 buy point. Shares reclaimed their 50-day line this week in heavy volume, a positive sign. The company’s upcoming earnings results are Nov. 4. Cummins stock was up 0.3% Thursday morning.
Gas station and mini-market leader Murphy USA is building a flat base with a 303.19 buy point. Shares declined more than 1% Wednesday, continuing lower after Tuesday’s bearish reversal. The stock is finding stout resistance at its 50-day line. A decisive retake of this level would be bullish for the stock’s base-building prospects. Q3 earnings results are due out Oct. 26. Shares were up 0.1% Thursday.
Neurocrine Biosciences is trying to break out past a flat base’s 109.36 buy point, according to IBD MarketSmith chart analysis. Shares briefly topped the entry Tuesday, but are now about 1% below the buy trigger. The RS line hit a new high Friday, a bullish signal. Shares dipped 0.1% early Thursday.
IBD Leaderboard stock Vertex Pharmaceuticals is rapidly approaching a flat base’s 306.05 buy point and above an early entry at 296.24. While the weak market status may keep you on the sidelines, the stock’s resilience makes it a top idea to watch. Its RS line is just off new highs, a potential sign of big stock market outperformance. VRTX stock fell almost 1% Thursday, even as RBC upped its price target from 276 to 281.
World Wrestling Entertainment is trying to break out past a cup base’s 75.33 entry, but closed about 2% below the entry following Wednesday’s 0.5% decline. The RS line hit a new high this week. WWE shares added 0.1% Thursday.
Tesla stock skidded 3.5% Wednesday, closing at its lowest level since July 18. Shares rose 0.5% Thursday morning. Mizuho analyst Vijay Rakesh lowered the firm’s price target on Tesla shares from 391.67 to 370. In a research note, the analyst believes the September quarter for electric vehicle makers was mostly in-line as supply and logistics “remain a challenge.” The firm kept a buy rating on Tesla stock.
Shares are about 40% off their 52-week high and sharply below their 50- and 200-day lines. The EV giant’s Q3 results are Oct. 19.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.2% Wednesday, rising for a third straight day. Shares are still about 20% off their 52-week high and below their 50- and 200-day lines. Third-quarter earnings results are Oct. 27. Apple stock rose 0.1% Thursday morning.
Microsoft inched higher Wednesday, extending a win streak to three sessions and continuing its rebound from last week’s 52-week low price. The software giant remains about 30% off its 52-week high. Microsoft shares slipped 0.2% early Thursday.
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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