The Dow Jones Industrial Average fell 100 points after a key gauge showed hotter-than-expected inflation Wednesday, as the stock market threatened to add to Tuesday’s losses. Early earnings movers included Coinbase, Unity Software and Upstart. And the Rivian IPO is set to begin trading Wednesday.
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Among the Dow Jones leaders, Apple (AAPL) moved down 1.1% Wednesday, while Microsoft (MSFT) lost 0.4% in today’s stock market. American Express (AXP), JPMorgan Chase (JPM) and Nike (NKE) continue to trade near new buy points in the current rally.
Tesla (TSLA) dropped almost 2% Wednesday, following Tuesday’s dive.
Among companies reporting earnings, Coinbase (COIN), Unity Software (U) and Upstart (UPST) posted results after the market close Tuesday.
Among the top stocks to buy and watch, Academy Sports & Outdoors (ASO), Adobe (ADBE) and Sprout Social (SPT) are in or near buy zones.
Microsoft and Tesla are IBD Leaderboard stocks. Academy Sports is an IBD SwingTrader stock. Apple is featured in this week’s Stocks Near A Buy Zone story. And Sprout was Tuesday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Inflation Fears
After the stock market open Wednesday, the Dow Jones Industrial Average fell 0.15%. The S&P 500 moved down 0.5%, while the tech-heavy Nasdaq composite dropped 1.1% in morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.8% after the market open. And the SPDR S&P 500 ETF (SPY) descended 0.3%.
At 8:30 a.m. ET, the Labor Department said the October consumer price index surged 6.2%, higher than Econoday estimates for a 5.8% rise in October from the same month a year ago. The CPI measures what consumers pay for goods and services and is a key gauge of inflation. On a monthly basis, the CPI climbed 0.9% in October from the prior month vs. the 0.5% estimate.
Meanwhile, weekly jobless claims fell to 267,000, meeting Econoday estimates, down slightly from last week’s 269,000 reading.
Stock Market ETF Strategy And How To Invest
Stock Market Rally
The stock market rally took a breather Tuesday, as the Nasdaq and S&P 500 snapped extended winning streaks. The Dow Jones Industrial Average fell from Monday’s record highs.
On Tuesday, The Big Picture commented, “After a five-week run that sent the Nasdaq composite up 13% from an Oct. 4 low of 14,181 to Friday’s peak of 16,053, it probably surprised no one to see the stock market indexes catch their breath.”
Despite an extended market rally, the major stock indexes continue to progress higher with a limited amount of distribution. That signals investors to remain bullish on the market’s positive trend. But be disciplined about your purchases. Don’t chase extended stocks, and be sure to cut losses after sell signals. And it’s also OK to take some profits, to sell into strength, in order to avoid some potential downside.
For daily stock market commentary, be sure to check out IBD’s The Big Picture.
Five Best Dow Jones Stocks To Watch Now
Dow Jones Stocks To Buy And Watch: Amex, JPMorgan, Nike
American Express ended Tuesday in buy range past a 178.90 entry in a cup with handle, according to IBD MarketSmith chart analysis. Shares traded up 0.6% Wednesday.
Meanwhile, JPMorgan remains in the 5% buy zone past a 163.93 entry in a cup with handle after a recent bounce off its 50-day moving average. The 5% buy area tops out at 172.13. JPM stock was up 0.3% Wednesday.
Dow Jones retail leader Nike is just below its cup base’s 174.48 buy point following Tuesday’s 1.15% gain. Shares fell over 1% Wednesday.
Rivian IPO To Debut
The Rivian IPO priced 153 million shares at $78 a share Tuesday night, giving the electric-vehicle maker an initial valuation of roughly $77 billion. That was above the already-raised price range of $72-$74. Rivian stock will begin trading as RIVN sometime on Wednesday.
Investors should be disciplined about buying new issues. Wait for an IPO base to form and offer the stock’s first buy point before considering a purchase.
Stock Market Earnings: Coinbase, Unity, Upstart
Coinbase plunged more than 7% Wednesday after reporting third-quarter results that missed expectations. COIN stock remains above a 280.71 double-bottom entry. But premarket action suggested those gains could be wiped away at the start of regular trade.
Unity Software tumbled about 8% early Wednesday despite crushing Wall Street’s sales target for the third quarter and reporting a smaller-than-expected loss. The stock remains sharply above its 50-day moving average.
Upstart reported strong earnings and sales results and better-than-expected guidance, but UPST stock plummeted 22% in early trade. Shares closed just below their 50-day line amid Tuesday’s 6.2% skid.
Stocks To Buy And Watch: Academy, Adobe, Sprout
IBD SwingTrader stock Academy Sports & Outdoors ended Tuesday in the buy range past a cup-with-handle’s 45.53 buy point following last week’s breakout move. The 5% buy range goes up to 47.81. Academy shares were down 1.5% Wednesday.
The IBD Stock Checkup shows that Academy stock has a 96 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating identifies stocks with a blend of strong fundamental and technical characteristics.
IBD Leaderboard stock Adobe is in buy range, going past its 659.29 entry in a cup with handle, according to IBD MarketSmith chart analysis. Shares were down nearly 1% Wednesday. Per Leaderboard analysis, the new base is a third-stage pattern. Later-stage bases tend to have less upside, and are more prone to fail than earlier-stage patterns.
Tuesday’s IBD 50 Stocks To Watch pick, Sprout Social, is forming a choppy consolidation with a 145.52 buy point. Meanwhile, shares moved above an early entry at 139.90 during Tuesday’s 7.6% advance. The stock was down over 3% after Wednesday’s opening bell.
Join IBD experts as they analyze leading stocks in the current stock market uptrend on IBD Live
Tesla Stock
Tesla stock lost almost 2% Wednesday, threatening to extend a losing streak to four sessions following Tuesday’s 12% tumble. Shares are nearly 20% off their 52-week high after trading as high as 1,243.49 on Thursday.
TSLA shares remain sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730. The chart also shows an alternate entry at 900.50.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple has formed a new cup-with-handle base with a 153.27 buy point, according to IBD MarketSmith chart analysis. Shares traded down 1.1% Wednesday and are just shy of the new buy point. Meanwhile, an early entry at 152.53 is also in play as a result of a downsloping trendline.
Software giant Microsoft moved down 0.4% Wednesday. On Oct. 18, Microsoft broke out past a flat base’s 305.94 buy point. The 5% buy zone tops out at 321.24, so the stock is now extended. Shares are at record highs.
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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