The Dow Jones Industrial Average dropped more than 225 points Thursday morning before cutting losses, as Federal Reserve Chairman Jerome Powell spoke at the Cato Institute’s annual monetary conference.
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Key overnight earnings included Casey’s General Stores (CASY), Copart (CPRT) and Dave & Buster’s Entertainment (PLAY).
CASY stock declined more than 2% on mixed results. Copart shares were down 4%, while Dave & Buster’s slid more than 7%.
Advanced Micro Devices (AMD) rose after Stifel Nicolaus started the stock with a buy rating, while First Solar (FSLR) jumped 2% on a Goldman Sachs upgrade to buy. Electric-vehicle leader Tesla (TSLA) declined more than 1% Thursday.
Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were both lower after today’s stock market open.
In the market’s current volatility, Arista Networks (ANET), Costco (COST), Restaurant Brands (QSR) and Ulta Beauty (ULTA) — as well as Dow Jones stock Chevron (CVX) — are among the top issues to buy and watch. Keep in mind the market’s increased volatility is a good reason for investors to be more defensive.
Costco is a IBD Leaderboard stock in the wake of a recent breakout, while Apple stock and Restaurant Brands were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices
After the opening bell Thursday, the Dow Jones Industrial Average fell 0.4%, while the S&P 500 lost 0.3%. The tech-heavy Nasdaq composited traded down 0.4% in morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 0.55%, and the SPDR S&P 500 ETF (SPY) retreated 0.45% in early trade.
The 10-year Treasury yield ticked higher to 3.28% early Thursday, continuing to fall after Wednesday’s decline to 3.26%. Previously this week, the 10-year Treasury yield notched its highest closing level since June 15.
The European Central Bank hiked interest rates by 75 basis points Thursday morning, moving to fight record inflation. An energy crisis has Europe on the edge of a recession.
U.S. oil prices inched higher Thursday, rebounding a bit from Wednesday’s sharp selloff. West Texas Intermediate futures traded just above $82 a barrel.
Early Thursday, the Labor Department’s first-time jobless claims fell to 222,000, well below an expected rise to 240,000. Jobless claims were 232,000 in the previous week.
Stock Market Rally Under Pressure
On Wednesday the Nasdaq Composite and smaller issues led the upside. The former rebounded 2.1%, finally snapping a nasty seven-session selling streak.
Wednesday’s The Big Picture column commented, “If the current rebound truly has legs, expect the major averages to hop back above their own 50-day moving averages. The summer rebound back above this intermediate technical level was successful. But the benefit of hindsight shows that resistance at the longer-term 200-day averages has proved too strong so far this year.”
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 and SwingTrader.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron
Dow Jones stock Chevron dropped 1.3% Wednesday, stemming its slide just above the key 50-day line. The stock added a handle to a cup base, moving the correct buy point to 166.93 — according to IBD MarketSmith chart analysis — amid a strong performance by energy stocks so far this year. The stock rose 0.5% early Thursday.
CVX stock shows a strong 97 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.
4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally
Top Stocks To Watch: Arista, Costco, Restaurant Brands, Ulta
Arista Networks has added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith chart analysis. Arista’s relative strength line is starting to give ground, as the stock stays below its long-term 200-day line. ANET shares were down 0.6% early Thursday.
IBD Leaderboard stock Costco regained its 50-day line Wednesday and is about 4% below its 552.81 buy point from a cup with handle. The stock came close to triggering the 7%-8% loss-cutting sell rule earlier this week. Shares traded down 0.8% Thursday.
Restaurant Brands rallied 2% Wednesday, ending just 2% from a cup with handle that has a 61.19 buy point. Restaurant Brands franchises and operates 29,000 Burger King and Tim Hortons restaurants globally. The stock was down 0.7% early Thursday.
Cosmetics retailer Ulta Beauty moved squarely out of buy range Wednesday past a 417.08 buy point in a double bottom base. The RS line hit another new high, as the stock demonstrates abnormal strength in a weak market environment. ULTA shares moved down 0.5% Thursday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rallied 3.4% Wednesday, rebounding from its 50-day line, which continues to be a potential support level to watch. Shares of the electric-vehicle giant fell more than 1% Thursday morning.
Tesla stock found resistance at its 200-day line in recent months and is about 32% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares gained 0.9% Wednesday as the Dow Jones tech giant unveiled the iPhone 14, but are still below their 50-day line. The stock is about 12% away from a buy point at 176.25 off a cup with handle. Despite the recent losses, the stock’s relative strength line is holding near new highs, indicating steady stock market outperformance. Shares fell 0.8% Thursday.
Microsoft moved up 1.9%, snapping a seven-session losing streak. The software giant remains sharply below below its 50- and 200-day lines. Shares are about their 52-week high. The stock dropped 0.7% 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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