The Dow Jones Industrial Average declined more than 325 points Thursday in the wake of first-time jobless claims and another estimate for third-quarter gross domestic product. Chip stocks came under pressure after weak quarterly results from Micron Technology. And CarMax plunged as it reported consumers are starting to balk at car prices.
The Labor Department said Thursday that initial jobless claims rose to 216,000, below estimates for a rise to 225,000 vs. 211,000 in the prior week. Also, the Commerce Department reported another estimate of third-quarter GDP came in stronger than expected. This third estimate showed growth of 3.2% vs. the second estimate’s 2.9%.
On Friday, investors will shift their attention to more inflation data, with the release of November’s personal consumption expenditures figures.
Micron Technology (MU) dropped more than 3% Thursday. Late Wednesday, the memory-chip maker missed estimates for its fiscal first quarter amid a cyclical downturn. The chip industry bellwether also predicted current-quarter results that were far below analyst views, sending chip stocks to broad early losses.
CarMax (KMX) careened 8% lower, after management said inflation and rising interest rates led to “vehicle affordability issues.” The company fell far short of third-quarter earnings estimates.
Chinese stocks were strong outperformers Thursday morning, as Hong Kong’s Hang Seng Index surged nearly 3% on pledges for new growth initiatives and some easing of international tension. Alibaba (BABA) rose nearly 1%, while JD.com (JD) was unchanged. Pinduoduo (PDD) inched lower.
Electric-vehicle giant Tesla (TSLA) dropped more than 3% Thursday. Dow Jones energy giant Chevron (CVX) fell 0.6% Thursday morning, as U.S. oil prices continue to rise. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded lower after today’s stock market open.
IBD Leaderboard stock Neurocrine Biosciences (NBIX), KLA (KLAC), O’Reilly Auto Parts (ORLY) and Texas Roadhouse (TXRH) — as well as Dow Jones names Amgen (AMGN), Caterpillar (CAT) and Home Depot (HD) — are among the top stocks to consider for investor watchlists. Keep in mind the recent market weakness should keep investors on the defensive.
Dow Jones Today: Oil Prices, Treasury Yields
After Thursday’s opening bell, the Dow Jones Industrial Average moved down 1%, while the S&P 500 fell 1.3%. The tech-heavy Nasdaq composite lost 1.8% in morning action.
The 10-year Treasury yield ticked lower to 3.67% Thursday morning, on pace to snap a three-day win streak.
Meanwhile, U.S. oil prices traded up nearly 2% Thursday, as West Texas Intermediate futures rose to almost $80 a barrel in morning trade.
Stock Market Rally Under Pressure
On Wednesday, the stock market posted a strong performance, with the Dow Jones Industrial Average rallying 1.6%. The S&P 500 and Nasdaq composite both rose 1.5%.
Wednesday’s The Big Picture column commented, “Meanwhile, the new rally attempt faces another inflation data test on Friday. Before the stock market opens, the last traders manning equity desks across the country ahead of the three-day Christmas holiday will be eyeing closely the November personal consumption expenditures figures.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.
Dow Jones Stocks To Watch: Amgen, Caterpillar, Home Depot
Drugmaker Amgen is building a new flat base following a big advance into the middle of November. But shares are below their 50-day line after sharp losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. AMGN stock traded down 0.8% Thursday.
Dow Jones member Caterpillar broke out past a 239.95 buy point in a flat base, according to IBD MarketSmith pattern recognition, during Wednesday’s 2.8% breakout move. Bullishly, the stock’s relative strength line, a key technical indicator, hit a new high. CAT stock lost 1.1% Thursday.
Home improvement retailer Home Depot is about 4% below a cup-with-handle base’s 329.77 buy point after reversing last week’s breakout move. HD stock traded down 1.6% Thursday morning.
Top Stocks To Watch: KLA, Neurocrine, O’Reilly, Texas Roadhouse
Chip equipment leader KLA reclaimed its cup-with-handle’s 392.60 entry during Wednesday’s 2.8% advance. KLA shares traded down 3.9% Thursday.
IBD Leaderboard stock Neurocrine rallied for a fourth straight session Wednesday, gaining 1% and continuing to rebound from support at its 50-day level. A strong rebound is bullish for the stock’s immediate prospects and would likely lead to the formation of a new base. NBIX stock added 0.4% Thursday.
O’Reilly Auto Parts is also finding much-needed support at its 50-day line this week and remains squarely above a 750.98 flat-base entry. A big rebound off the 50-day line could bring a follow-on entry point, but the market uptrend is under pressure right now, which increases the risk of buying stocks. ORLY shares dipped 1% Thursday.
Texas Roadhouse shows a new buy point at 101.85, but is now consolidating below its 50-day line. The IBD Leaderboard stock will look to recover that key benchmark over the coming days. TXRH stock traded down 1.1% Thursday morning.
Stocks To Watch
These are five top stocks to watch in today’s stock market, including three Dow Jones leaders.
Correct Buy Point
Type Of Base
Cup with handle
Cup with handle
Source: IBD Data As Of Dec. 21, 2022
Tesla stock declined 0.2% Wednesday, extending a losing streak to four sessions and hitting another 52-week low. Shares lost more than 3% Thursday morning, marking a fresh 52-week low at 132.28.
On Wednesday, TSLA stock hit a new 52-week low, trading as low as 135.89. Shares closed about 66% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares jumped 2.4% Wednesday, snapping a five-day losing streak. The stock remains near its 52-week low, which was set on June 16 at 129.04. The stock is around 26% off its 52-week high. Shares traded down 1.5% Thursday.
Microsoft rose 1.1% Wednesday, rising for a second straight day and moving further above their 50-day line. The software giant remains about 30% off its 52-week high. MSFT stock moved down 1.6% 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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