The Dow Jones Industrial Average sold as much as 411 points Thursday morning after higher-than-expected wholesale inflation data, as well as a surprise drop in weekly jobless claims. Shopify (SHOP) plummeted 16% after the company’s revenue outlook for 2023 fell short of expectations.
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The Labor Department’s January producer price index rose 0.7% month on month, beating the 0.4% estimate. That represents a year-on-year increase of 6%, up from 6.2% in December. The monthly core rate rose 0.5%, hotter than the estimate of 0.3%, with an annualized rate of 5.4%.
Meanwhile, weekly first jobless claims fell to 194,000 versus 195,000 in the previous week. They were expected to rise to 200,000. Finally, the Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey for February fell to -24.3 from -8.9 in the previous month.
In terms of revenue, Albemarle (ALB), Dow Jones member Cisco systems (CSCO), Year (ROKU) and Twilio (TWLO) reported the results late on Wednesday.
Albemarle shares rose more than 1% after the lithium miner beat fourth-quarter earnings estimates while reiterating guidance released last month. Cisco shares rose 3% after beating earnings estimates to approach a buy point of 50.81. It also increased the quarterly dividend.
Streaming video platform Roku beat estimates for new users and revenue in the fourth quarter, leading to an 8% increase in morning trading. Finally, Twilio was up 12% in early morning trading.
early thursday, Crocs (CROX), Data dog (D.D.O.G.), Shake Shack (To play chess Toast (TOST) reported quarterly results.
CROX stock rose 6%, while Datadog stock plunged 6.5%. Shake Shack lost almost 2% despite a smaller-than-expected loss. Toast shares plummeted 20% in early trading.
Fair today
Electric vehicle leader Tesla was down 1.8% on Thursday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were sharply lower in today’s stock market.
Dexcom (DXCM), IBD Leaderboard Stock Snowflake (SNOW), Inspire medical systems (INSP) and Wing stop (WING) — as well as Dow Jones stocks Caterpillar (CAT), JPMorgan Chase (JPM) and Sales team (CRM) – are among the top stocks to buy and watch amid the recent stock market rally.
Snowflake is an IBD Leaderboard stock. Inspire and Dexcom were recent IBD Stock Of The Day topics. Salesforce was featured this week in Stocks Near a Buy Zone.
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Dow Jones Today: Oil Prices, Treasury Yields
After Thursday’s opening bell, the Dow Jones Industrial Average fell 1.1% and the S&P 500 fell 1.15%. The tech-heavy Nasdaq composite lost 1.15% in the morning action.
Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.5% and the SPDR S&P 500 ETF (SPY) fell 1.1% early Thursday.
The yield on 10-year US Treasury bonds rose to 3.8% on Wednesday, the highest closing price since December 30. Thereafter, the 10-year yield ticked higher to 3.84% Thursday morning after the PPI reading.
Oil prices appeared to stage a two-day pullback on Thursday and rise slightly in morning trading. West Texas Intermediate futures were trading just below $79 a barrel.
Stock market rally
On Wednesday, the Nasdaq composite led the way, up 0.9%, while the Dow Jones Industrial Average was up 0.1% and the S&P 500 up 0.3%.
Wednesday’s Big Picture column noted, “A better-than-expected report on US retail sales in January likely boosted premarket futures. A 3% increase in headline numbers from December bolstered hopes. that the U.S. economy will avoid a hard landing confirms market participants’ view that the Federal Reserve will, yes, be even more adamant about using higher rates to bring inflation back to comfortable levels.”
Five Dow Jones stocks to buy and watch now
Dow Jones Stocks to Buy and Watch: Caterpillar, JPMorgan, Salesforce
Top Dow Jones stock Caterpillar is still in buy range above a 239.85 flat-base entry as it tries to find support around its 50-day moving average, according to IBD MarketSmith chart analysis. Shares recovered 1.8% and bounced off the 50-day line. CAT shares fell 0.8% Thursday morning.
Banking giant JPMorgan remains in the 5% buy range above a buy point of 138.76 on a flat basis after a fourth consecutive gain on Wednesday. The 5% buy zone reaches a maximum of 145.70. JPM shares fell 0.5% early Thursday. JPM shares show a solid 95 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
In this week’s Stocks Near a Buy Zone column, Salesforce builds a handle cup with a buy point of 178.94. Shares rose 0.7% on Wednesday, finishing just 4% from entry. The CRM share fell 1.6% early Thursday.
4 Top Growth Stocks to Buy and Watch in the Stock market rally
Top stocks to buy and watch: Inspire, Snowflake
Recent IBD shares of the day Inspire Medical Systems ended just outside the 5% buy territory past the buy point of a flat base of 262.64 amid Wednesday’s 2.9% rally, according to pattern recognition from IBD MarketSmith. The buy zone peaked at 275.77. INSP shares show a modest 84 IBD Composite Rating. INSP shares fell 1.7% early Thursday.
backstory: The company sells an implantable device to treat sleep apnea through electrical stimulation of the nerves — a process called neurostimulation.
Recent addition to the IBD leaderboard, Snowflake, is fast approaching an early entry at 178.80 as the software leader moves up the right side of a deep cup base with a buy point of 205.76. SNOW shares fell 3.5% on Thursday morning.
backstory: The software company offers enterprises and large organizations a new way to access, organize and analyze their data. To help customers maximize their data analytics investments, Snowflake charges based on time of use. Income is paid on March 1.
Dexcom, Wingstop Eye Latest Buying Points
Dexcom shares rose 1.4% on Wednesday, extending a profit streak to four sessions and moving further to the right side of a cup base with a buy point of 125.65. Equities may also be a handle in the coming weeks, so keep an eye out for a possible lower entry. The stock fell 1.4% on Thursday.
backstory: On February 9, Dexcom reported stronger-than-expected quarterly results. The beat comes as Dexcom’s latest continuous glucose monitor, or CGM, picks up steam in the US and Europe. These body-worn devices monitor blood sugar levels in real time. The Food and Drug Administration approved Dexcom’s new device, the G7, last year.
Wingstop continued past a buy point of 169.04 in a handle cup and was up 2.2% on Wednesday in the wake of Tuesday’s breakout move. WING shares fell 0.7% on Thursday.
backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. The international offices include Mexico, Colombia, Panama, Singapore and the UK. The company added 40 net stores in the previous quarter. Earnings are expected on February 22.
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Stocks to buy and watch in Stock Market Rally
Here are seven top stocks to buy and watch in the current stock market, including two Dow Jones leaders.
| Company Name | Symbol | Correct point of purchase | Base type |
|---|---|---|---|
| Inspire medical systems | (INSP) | 262.64 | Flat base |
| visteon | (VC) | 152.20 | Cup base |
| Caterpillar | (CAT) | 239.95 | Flat base |
| Snowflake | (SNOW) | 205.76 | Cup base |
| JPMorgan | (JPM) | 138.76 | Flat base |
| Wing stop | (WING) | 169.04 | Cup with handle |
Source: IBD data as of February 15, 2023
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Tesla stock
Tesla shares rose another 2.4% on Wednesday, adding to Tuesday’s high gains. Despite their strong recovery since Jan. 6, stocks are still below the 200-day line, but that important level looms as a potential area of resistance. Shares closed around 44% of their 52-week high on Wednesday.
Stocks threatened to give up much of Wednesday’s gains, falling nearly 2% Thursday morning.
Dow Jones leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.4% on Wednesday to close at their highest level since Oct. 28. Shares are about 14% below their 52-week high and are rising on the right side of a new base. Apple shares fell 1% on Thursday.
Microsoft shares fell 1.05% on Wednesday, ending a two-day rally. The stock is above its 200-day line and about 15% from its 52-week high after recent gains. MSFT shares fell 1.9% Thursday morning.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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