The Dow Jones Industrial Average surged higher Thursday after a day of Fed-fueled stock market volatility. Tesla stock skidded on earnings results. Apple earnings are due late. And Intel, McDonald’s, Mastercard and Vertex Pharmaceuticals were also key earnings movers Thursday.
Chips were mixed, with Xilinx (XLNX) and Nvidia (NVDA) posting strong early moves. Meanwhile, Intel (INTC) slumped more than 4% after delivering a mixed outlook. Chip gear maker Teradyne (TER) plummeted 24% on weak guidance.
Netflix (NFLX) powered more than 5% higher after activist investor Bill Ackman’s Pershing Square Holdings disclosed a 3.1 million-share stake in the online entertainment giant worth more than $1 billion.
Tesla (TSLA) skidded over 4% Thursday. The electric-vehicle leader reported earnings late Wednesday.
Among Thursday’s top stocks to watch, American International Group (AIG), Baker Hughes (BKR), CF Industries (CF) and Matson (MATX) are near new buy zones. Keep in mind the current stock market status cautions investors to remain on the sidelines.
Microsoft and Tesla are IBD Leaderboard stocks.
Dow Jones Today
After the stock market open Thursday, the Dow Jones Industrial Average surged 1.5%, while the S&P 500 moved up 1.6%. The tech-heavy Nasdaq composite rallied 1.5% in morning trade. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) scaled up 1.4% Thursday, and the SPDR S&P 500 ETF (SPY) moved up 1.2%.
The 10-year Treasury yield ticked down below 1.8% Thursday morning. On Wednesday, the 10-year Treasury yield jumped, closing below 1.85% and just shy of multi-year highs. Oil prices jumped, sending West Texas Intermediate 1% higher, to above $88 a barrel — a new seven-year high.
The Labor Department said first-time unemployment claims fell to 260,000, slightly lower than forecast, vs. a much higher-than-expected 286,000 in the prior week, per Econoday.
Meanwhile, the Commerce Department said the U.S. economy grew at a 6.9% annual rate in the fourth quarter of 2021, higher than the Econoday forecast of a 5.7% annual rate. In the third quarter, GDP grew at a 2.3% annual rate.
Stock Market Sell-Off Continues
Despite Wednesday’s disappointing performance, the indexes held above Monday’s intraday lows, so the ongoing rally attempt is still intact. Monday was Day 1 of a new rally attempt. Now, be on the lookout for a follow-through day, which is when a major index posts strong gains in volume heavier than the prior day. Follow-throughs occur as early as Day 4 of the attempted rally.
Wednesday’s The Big Picture cautioned: “Initially the market rallied after the Federal Open Market Committee (FOMC) issued a policy statement that signaled an upcoming hike in the Fed funds rate. The U.S. central bank said it will end winding down asset purchases before its mid-March meeting. A first interest-rate hike is also likely to occur that month. This was in line with Wall Street expectations. But Powell spooked the stock market by saying inflation is actually getting worse as wage hikes and supply-chain issues continue to take a toll.”
Amid this recent weakness, now is an important time to check out IBD’s The Big Picture.
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard.
Investors also can create watch lists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Best Dow Jones Stocks To Watch Now
Dow Jones Earnings: Intel, McDonald’s
Chip giant Intel beat Wall Street’s targets for the fourth quarter but gave a mixed outlook for the current period. Shares slid more than 4% in morning trade.
McDonald’s (MCD) reported weaker-than-expected earnings and sales results, as shares dropped almost 1% Thursday morning.
Stock Market Earnings: Mastercard, Vertex
Mastercard (MA) reported earnings ahead of Thursday’s open, beating both earnings and revenue targets. Shares slipped 0.3% as investors dug into the early report.
Three Top Growth Stocks To Watch In The Current Stock Market Weakness
Stocks To Watch: AIG, Baker, CF Industries, Matson
AIG dropped 1% Wednesday, but held above its 50-day moving average. AIG shares are forming a cup-with-handle base with a 62.35 buy point, according to IBD MarketSmith chart analysis. The stock was up almost 2% Thursday. AIG was IBD’s Stock Of The Day on Jan. 19.
Gas and oilfield services and equipment leader Baker Hughes is back below a 27.76 cup-base buy point after Wednesday’s 1.5% fall. Shares of the Houston-based outfit gained more than 2% Thursday.
Fertilizer producer CF Industries suffered a setback in its 5.1% dive on Wednesday. Shares are still building an ascending base with a 74.87 buy point. Bullishly, the stock’s RS line hit a new high this week, indicating strong stock market outperformance. CF stock boasts a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The stock was up 2% Thursday.
IBD Leaderboard stock Matson broke out past a cup-with-handle buy point of 93.27 during Wednesday’s 3.3% advance. Bullishly, the stock’s RS line hit a new high, confirming the shipping stock as a market leader. Shares advanced 3% Thursday morning.
Tesla stock skidded over 4% Thursday, threatening to give back all of Wednesday’s 2.1% climb. On Monday, the stock briefly hit its lowest level since Oct. 18 during the session’s heavy midday losses. Shares are now sharply below their 50-day line and approaching their 200-day moving average line.
Late Wednesday, Tesla reported fourth-quarter earnings that were better than expected, but said supply-chain issues continue to slow production.
The stock traded as high as 1,243.49 on Nov. 4, but ended Tuesday about 26% off that 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock dropped another 0.1% Wednesday, falling further below the key 50-day line. Shares are about 4% past a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Shares rose 2% Thursday.
Late Thursday, the tech titan will report its quarterly results. Analysts expect the company to earn $1.90 a share on sales of $119 billion.
Software leader Microsoft jumped 2.85% Wednesday, closing back above its long-term 200-day moving average line. MSFT shares rallied 2% in morning trade.
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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