The Dow Jones Industrial Average dropped more than 225 points Thursday morning after the Labor Department’s first-time jobless claims. Meanwhile, Netflix (NFLX) earnings are due out after the market close, kicking off fourth-quarter tech earnings.
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Initial unemployment claims dropped to 190,000 vs. 205,000 in the previous week. Claims were expected to rise to 215,000, per Econoday estimates.
Elsewhere on the economic front, housing starts and permits — along with the Philadelphia Fed Manufacturing Index — were released. Housing starts and permits for December fell to 1.382 million and 1.330 million, respectively, vs. expectations for 1.362 million and 1.380 million.
Also, the Philly Fed index came in at -8.9 in January, better than the expected -10.3 reading and higher compared with a -13.8 reading in December.
Alcoa (AA) and Discover Financial Services (DFS) reported earnings late Wednesday, while Fastenal (FAST) and Procter & Gamble (PG) earnings came out ahead of Thursday’s open.
Alcoa shares slid more than 3%, while Discover stock sold off more than 6%. Fastenal was up 1% after beating top-and bottom-line estimates. And P&G stock declined nearly 2% after earnings matched estimates and sales beat targets.
Stock Market Today
Charles Schwab (SCHW) dropped almost 5% after a rare double downgrade at Bank of America. Roblox (RBLX) skidded more than 7% after Morgan Stanley downgraded the stock from equal weight to underweight.
Electric-vehicle leader Tesla (TSLA) fell nearly 1% Thursday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were both squarely lower after today’s stock market open.
IBD Leaderboard stock Fluor (FLR), recent IBD Stock Of The Day Medpace (MEDP), Monster Beverage (MNST) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones names Amgen (AMGN), Chevron (CVX) and Walmart (WMT) — are among the top stocks to buy and watch with the market testing the strength of a new rally.
Fluor and Medpace are IBD Leaderboard stocks.
Dow Jones Today: Oil Prices, Treasury Yields
After Thursday’s opening bell, the Dow Jones Industrial Average moved down 0.7%, and the S&P 500 lost 0.75%. And the tech-heavy Nasdaq composite fell 1% with Nvidia (NVDA) leading the declines.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1% and the SPDR S&P 500 ETF (SPY) traded down 0.7% early Thursday.
The 10-year Treasury yield rose to 3.39% Thursday morning, retaking a small portion of Wednesday’s tumble to 3.37%.
Oil prices rebounded Thursday, taking West Texas Intermediate futures back above $80 a barrel. On Wednesday, WTI futures ended an eight-day runup, reversing after reaching their highest level since early December.
Stock Market Rally
On Wednesday, the Dow Jones Industrial Average sold off 1.8%, and the S&P 500 lost 1.6%. The Nasdaq Composite moved down 1.2%, snapping a seven-day win streak.
Wednesday’s The Big Picture column cautioned, “On a practical level, it’s time to throttle back on stocks. Exposure should remain 20% to 40%, although much depends on the success of breakouts. While dozens of quality stocks have made it out of bases, MarketSmith’s list of recent breakouts shows fewer than 10 still up more than 5% from buy points.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Amgen, Chevron, Walmart
Drug giant Amgen is shaping a flat base that has a 296.77 buy point, according to IBD MarketSmith pattern recognition. First, Amgen shares must retake their 50-day line, which is a key resistance level to watch. AMGN shares fell 1% early Thursday.
Energy giant Chevron fell back below its 50-day line during Wednesday’s 1.8% tumble, as it remains below a flat base’s 189.78 buy point. Chevron’s fourth-quarter earnings are due Jan 27. CVX shares lost 0.4%, despite the rise in oil prices.
CVX stock shows a solid 93 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Discount retailer Walmart fell further below its 50-day line after Wednesday’s 2.5% loss. Shares are building a cup-with-handle base that has a 154.74 buy point. Walmart shares edged 0.2% higher Thursday morning.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Fluor, Medpace
IBD Leaderboard stock Fluor is trying to break out past a flat base’s 36.16 buy point, but shares gave up their buy point during Tuesday’s 3.4% drop. If shares retake that entry, the 5% buy area tops out at 37.97. FLR stock fell 0.65% early Thursday.
Back story: Fluor manages big infrastructure projects in the oil and gas, chemical, mining and transport industries. This is an earnings turnaround play. A poor EPS Rating reflects net losses in 2019 and 2020 and a dip in profit expected in 2022 to 86 cents a share. Analysts, however, see earnings vaulting 95% next year to $1.68 a share.
Medpace inched higher Wednesday, edging closer to a consolidation’s 235.82 buy point. Last week, shares moved above an early entry at 220.09. The company’s earnings results are expected on Feb. 13. Medpace shares dropped 0.6% early Thursday.
Back story: Medpace is a clinical contract resource organization, or CRO. It helps drugmakers run the clinical studies needed to gain approval for new medicines. In the third quarter, the company issued a bullish outlook for 2023, calling for 18% sales growth at the midpoint of its guidance.
Monster, Vertex Trace Flat Bases
Monster Beverage is fighting for support around its 50-day line amid Wednesday’s 1.4% decline. Shares are tracing a flat base with a 104.75 buy point. MNST stock was down 0.3% Thursday.
Back story: Monster Beverage leads an energy-drink duopoly with privately held competitor Red Bull. The company’s portfolio of energy drink brands include Monster Energy, Reign and NOS Energy.
Monster dominates energy drinks in the U.S. and claimed a 39% market share last year, according to Jefferies data, resulting in a record $5.5 billion in revenue for the company. Red Bull accounted for 37% of the American energy drink market in 2021. Rising challenger Celsius (CELH), which is on an impressive growth streak, claimed 4.9% of the market.
Wednesday’s IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after bullishly retaking its 50-day line this week. VRTX stock was down 0.8% Thursday.
Back story: The company is well-known for its cystic fibrosis treatments — a market that Vertex estimates at 88,000 patients. Of those, there are still 20,000 patients who could receive its old-school oral treatments. But analysts are watching for what’s new from Vertex, including an updated regimen of three drugs that could strengthen Vertex’s position against rival AbbVie (ABBV).
Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Monster | (MNST) | 104.75 | Flat base |
| Fluor | (FLR) | 36.16 | Flat base |
| Vertex | (VRTX) | 324.85 | Flat base |
| Medpace | (MEDP) | 235.82 | Consolidation |
| Amgen | (AMGN) | 296.77 | Flat base |
| Chevron | (CVX) | 189.78 | Cup base |
| Walmart | (WMT) | 154.74 | Cup with handle |
Source: IBD Data As Of Jan. 19, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock skidded 2.1% Wednesday, giving up a part of Tuesday’s 7.4% surge. Despite their recent rebound, shares remain sharply below their 50- and 200-day lines. In early January, shares hit a 52-week low at 101.81. Tesla stock closed Wednesday about 66% off its 52-week high. Tesla earnings are due out Jan. 25.
Shares of the EV giant looked to bounce back from Wednesday’s losses, but fell around 1% Thursday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 0.5% Wednesday, closing at their highest level since Dec. 15. The stock remains around 24% off its 52-week high. Apple will report its quarterly earnings on Feb. 2. AAPL stock traded down 0.7% Thursday.
Microsoft stock slipped 1.9% Wednesday, snapping a seven-day win streak. The software giant is about 25% off its 52-week high. MSFT earnings are due out Jan. 24. Shares traded 1.3% lower 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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