The Dow Jones Industrial Average sold off more than 700 points Thursday after U.S. jobless claims and retail sales data were released. The stock market threatened to add to Wednesday's Federal Reserve-fueled losses, as sellers pressured chip stocks on warnings of industry oversupply. And Tesla stock hit a new low after Chief Executive Elon Musk disclosed share sales worth more than $3.5 billion this week.
The Labor Department reported first-time jobless claims fell to 211,000 vs. 230,000 the prior week. Other economic data include the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey for December, and the Commerce Department's U.S. retail sales for November.
The Philly Fed Index improved to -13.8 in December, still in a contraction, vs. -19.4 in the previous month. Meanwhile, U.S. retail sales missed estimates, falling 0.6% in November following October's 1.3% rise.
Early Thursday, Lennar shares dropped 3% after the homebuilder's fourth-quarter earnings results.
Stock Market Today
Snapchat-owner Snap fell more than 4% after Jefferies downgraded the stock from buy to hold. Chip stocks were under some early pressure, with Western Digital down 6.5% after Goldman Sachs downgraded the stock to sell, warning of a looming oversupply in memory-chip markets. Nvidia dropped 2.3% as HSBC initiated coverage with a reduce rating, also citing a short-term chip inventory correction.
Electric-vehicle giant Tesla traded up around 1% Thursday, reversing higher after hitting a new 52-week low.
Among the Dow Jones stocks, Verizon Communications rose 1.4% after a Morgan Stanley upgrade from equal weight to overweight. Dow Jones tech leaders Apple and Microsoft were sharply lower after today's stock market open.
Allegro Microsystems, IBD Leaderboard stock Dexcom, KLA and United Rentals — as well as Dow Jones names Caterpillar, Home Depot and UnitedHealth Group — are among the top stocks to buy and watch in the current market.
Dexcom and Trane are IBD Leaderboard stocks. UnitedHealth was featured in this week's Stocks Near A Buy Zone column. Allegro was a recent IBD 50 Stocks To Watch pick. Caterpillar, United Rentals and Dexcom were recent IBD Stock Of The Day companies.
Dow Jones Today: Oil Prices, Treasury Yields
After Thursday's opening bell, the Dow Jones Industrial Average lost 2.1%, while the S&P 500 declined 2.2%. The tech-heavy Nasdaq composite sold off 2.5% in morning action, with Advanced Micro Devices leading the declines.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust fell 2.5% and the SPDR S&P 500 ETF moved down 2.2% early Thursday.
The 10-year U.S. Treasury yield ticked lower to 3.47% Thursday morning. The 10-year Treasury yield inched higher Wednesday after the Federal Reserve's rate hike and Fed Chair Jerome Powell's hawkish comments.
Meanwhile, U.S. oil prices traded down around 1% Thursday morning, sitting atop a three-session advance. West Texas Intermediate futures traded below $77 a barrel after nearly falling below $70 on Friday.
Stock Market Rally
The stock market ended with moderate losses Wednesday, as the major stock indexes dropped after the Fed's rate hike. The Nasdaq composite declined 0.8%, the S&P 500 fell 0.6%, and the Dow Jones Industrial Average dropped 0.4%.
Wednesday's The Big Picture column commented, "By sending the Fed funds rate up 50 basis points to a target range of 4.25%-4.5% on Wednesday, the Fed ended its run of 75-basis-point increases at the prior four meetings. Indeed, this monetary tightening campaign has made history as one of the swiftest in IBD readers' lives. Yet perhaps more importantly, the Fed may have signaled that it won't have to be so aggressive in the coming months to accomplish its twin goals of economic growth and stable prices."
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market volatility.
Dow Jones Stocks To Buy And Watch: Caterpillar, Home Depot, UnitedHealth
Dow Jones member Caterpillar is approaching a 239.95 buy point in a cup with handle, according to IBD MarketSmith pattern recognition, in the wake of Wednesday's 0.4% rise. CAT stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. CAT stock dipped 1% Thursday.
Home improvement retailer Home Depot is in buy range above a cup-with-handle base's 329.77 buy point following Tuesday's breakout move. HD stock traded down 1.3% Thursday morning.
Health care giant UnitedHealth Group is tracing a flat base that features a 558.20 buy point. Shares are about 4% away from the latest entry after finding support near their 50-day line Wednesday. UNH stock was down 1.1% early Thursday.
Top Stocks To Buy And Watch: Allegro, Dexcom, KLA, United Rentals
Allegro Microsystems ended Wednesday still in buy range past a cup-with-handle's 32.07 buy point despite the day's 1.6% decline. ALGM stock lost 1.2% Thursday.
Chip leader KLA remains squarely in the 5% buy range past a cup-with-handle's 392.60 entry after Wednesday's 0.7% drop. The 5% chase zone goes up to 412.23. Bullishly, the relative strength line continues to make new highs in the ongoing market volatility. KLA shares were down 1.8% Thursday.
United Rentals moved back above a 368.04 buy point in a cup-with-handle pattern, according to IBD MarketSmith analysis. Shares closed above the buy point during Wednesday's slight rise. URI stock was down 2.2% Thursday.
Stocks To Buy And Watch
These are seven top stocks to buy and watch in today's stock market, including three Dow Jones leaders.
|Correct Buy Point
|Type Of Base
|Cup with handle
|Cup with handle
|Cup with handle
|Cup with handle
|Cup with handle
Source: IBD Data As Of Dec. 14, 2022
Tesla stock skidded another 2.6% Wednesday, falling sharply for a third straight day and hitting another 52-week low. Shares traded around 1% higher Thursday after it was disclosed CEO Musk sold more than $3.5 billion, or nearly 22 million Tesla shares this week. Tesla stock hit a new 52-week low, trading as low as 153.28 in morning trade.
On Wednesday, TSLA stock hit its lowest level since Nov. 18, 2020, reaching a new 52-week low price at 155.31. Shares closed more than 60% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 1.55% Wednesday, falling back below its key 50-day line. The 50-day line, which had been a key support level, has switched into an area of resistance to monitor. The stock is more than 20% off its 52-week high. Apple stock traded down 1.9% Thursday.
Microsoft inched higher Wednesday as shares test their long-term, 200-day line. The software giant remains around 25% off its 52-week high. Microsoft shares declined 1.8% early Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.