Dow Jones Sells Off On Key Inflation Data; Disney Tumbles On Earnings

The Dow Jones Industrial Average cut losses early Thursday, after another round of heavy selling on Wednesday sent the major stock indexes to new correction lows. More inflation data — the Labor Department’s producer price index — came out ahead of the market open. And Dow Jones media giant Disney tumbled after reporting an earnings miss late Wednesday.

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Dutch Bros (BROS) and Rivian (RIVN) also reported earnings late Wednesday. BROS stock crashed 37%. Rivian shares bounced 11%, after diving 28% for the week through Wednesday.

Electric-vehicle giant Tesla (TSLA) cut losses to about 3.5% Thursday morning. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded down 3.4% and 1.8%, respectively, in today’s stock market.

As the stock market correction continues to worsen, Dow Jones leaders Chevron (CVX) and Merck (MRK) — along with Cheniere Energy (LNG), Exxon Mobil (XOM) and Northrop Grumman (NOC) — are among IBD’s top stocks to watch for Thursday.

Cheniere Energy and Microsoft are IBD Leaderboard stocks. Exxon and Merck were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Today: Treasury Yields, Oil Prices, Inflation Data

After Thursday’s open, the Dow Jones Industrial Average moved down 0.6%, and the S&P 500 lost 0.8%. The tech-heavy Nasdaq composite sold off 1% in morning trade.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 1%. The SPDR S&P 500 ETF (SPY) lost 0.8%.

The 10-year Treasury yield dropped to 2.82% Thursday morning, as bonds continued to rebound vs. the stock market’s retreat. On Wednesday, the 10-year Treasury yield fell for a third straight day, closing at 2.92%. Meanwhile, U.S. oil prices traded more than 1% lower, with Texas Intermediate crude hovering around $104 a barrel after taking a 6% bounce on Wednesday.

CPI Inflation Rate Is Finally Falling But Not Enough

Producer prices rose 0.5% in April, down from a 1.4% rise in March, meeting Econoday estimates. Producer inflation rose 11% in April from a year ago, hotter than the 10.7% estimate. The producer price index is a measure of pricing strength based on selling prices received by domestic producers for their output.

On Wednesday, April’s consumer price index rose at an annual pace of 8.3%, down vs. the previous month’s 8.5%, but higher than economists projected.

Finally, first-time claims for unemployment rose to 203,000. Initial jobless claims were expected to fall to 190,000 compared with the previous week’s 200,000 applications.

Stock Market Correction Deepens

On Wednesday, the major stock indexes sold off sharply, hitting fresh correction lows. The Nasdaq composite dived 3.2%, leading the stock market lower.

Wednesday’s The Big Picture column commented, “Indexes started off strong and managed to hold in the green for much of the day. But the temporary respite was used as a tactical selling opportunity, causing a painful reversal into the close.”

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Dow Jones Earnings: Disney

Within the Dow Jones industrials, Disney reported earnings and sales below analysts’ targets for its fiscal second quarter. But subscriber growth for the Disney+ streaming service topped expectations by a wide margin.

Disney stock tumbled more than 4% early Thursday. DIS shares finished Wednesday more than 40% off their 52-week high.

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Chevron, Merck

Dow Jones leader and energy giant Chevron in a flat base that has a 174.86 buy point, according to IBD MarketSmith chart analysis. CVX shares traded up 1.5% Wednesday, as they fight to regain their 50-day line. Chevron shares backed off 0.7% Thursday morning.

CVX stock boasts a perfect 99 IBD Composite Rating, per IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.

Drug leader Merck is just below a cup with handle’s 89.58 buy point following Wednesday’s 1.6% advance. Shares inched up early Thursday. Positively, the stock’s relative strength line hit another high, indicating big stock market outperformance during the current correction.

Three Top Growth Stocks To Watch In The Current Stock Market Correction

Stocks To Watch: Cheniere, Exxon, Northrop

IBD Leaderboard stock Cheniere Energy is one of the top stocks to watch, even as it continues to trade below its 50-day line. Shares moved up 1% Wednesday, as they continue to etch a flat base that shows a 149.52 buy point, according to IBD MarketSmith chart analysis. LNG shares edged down Thursday.

Energy giant Exxon Mobil broke out past a cup with handle’s 89.90 buy point last week. But shares gave up the entry Monday and remain about 3% below the buy point. That stops short of triggering the automatic sell rule. The faltering breakout illustrates the danger of owning any stocks in the current market environment. XOM shares moved down 0.5% Thursday.

Defense contractor Northrop Grumman continues to etch a cup with handle with a 477.36 buy point. Shares are just below their 50-day line after Wednesday’s 0.8% loss. Northrop shares rose 0.6% Thursday.

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla Stock

Tesla stock declined more than 3% Thursday morning, threatening to add to Wednesday’s 8.25% skid. Shares remain sharply below their 50- and 200-day lines amid their recent weakness and are at their lowest level since February.

The stock traded as high as 1,243.49 on Nov. 4 and is about 36% away from that mark.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares slid 5.2% Wednesday, falling to their lowest level since October 2021. The stock is sharply below its 200-day line and about 20% off its 52-week high. Apple stock dropped 3.4% Thursday.

Software leader Microsoft dropped 3.3% Wednesday, its lowest level since June 2021. The stock closed about 25% off its 52-week high. MSFT shares moved down 1.8% Thursday 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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