Futures Extend Losses After GDP, Jobless Claims

Dow Jones futures extended losses Thursday morning after the Labor Department’s first-time jobless claims, along with another estimate for third-quarter GDP. Chip stocks came under some selling pressure after weak quarterly results from Micron Technology. On Friday, investors will shift their attention to more inflation data, with the release of November’s personal consumption expenditures figures.

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Both pieces of Thursday’s economic data came out at 8:30 a.m. ET. Initial jobless claims rose to 216,000, below estimates for a rise to 225,000 vs. 211,000 in the prior week.

Meanwhile, the third estimate of third-quarter GDP came in stronger than expected, showing growth of 3.2% vs. the second estimate’s 2.9% level of growth.

Micron Technology (MU) declined 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 results that were much lower than what analysts expected for the current quarter, sending chip stocks to broad early losses.

CarMax (KMX) careened 13% lower, after management said inflation and rising interest rates led to “vehicle affordability issues,” as the company fell far short of third-quarter earnings estimates.

Chinese stocks rallied sharply 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) and JD.com (JD) rose around 2% each, while Pinduoduo (PDD) also climbed 2%.

Electric-vehicle giant Tesla (TSLA) dropped 1% Thursday. Dow Jones energy giant Chevron (CVX) climbed 0.7% Thursday morning, as U.S. oil prices continue to rise. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded lower ahead of 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.

Neurocrine and United Rentals are IBD Leaderboard stocks. UnitedHealth was featured in last week’s Stocks Near A Buy Zone column. Caterpillar and United Rentals were recent IBD Stock Of The Day companies.

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Dow Jones Today: Oil Prices, Treasury Yields

Ahead of Thursday’s opening bell, Dow Jones futures moved down 0.7% vs. fair value. S&P 500 futures fell 0.9%. Tech-heavy Nasdaq 100 futures lost 1.2% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1% and the SPDR S&P 500 ETF (SPY) moved down 0.7% early Thursday.

The 10-year Treasury yield ticked lower to 3.66% 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.

Five Dow Jones Stocks To Buy And Watch Now

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 a fraction higher Thursday.

Dow Jones member Caterpillar broke out past 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 inched lower Thursday.

CAT stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.

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 unchanged Thursday morning.

4 Top Growth Stocks To Watch In The Current Stock Market Rally

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 1.6% premarket Thursday.

IBD Leaderboard stock Neurocrine rallied for a fourth straight sessions Wednesday, gaining 1% and continuing 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 1.6% 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 unchanged Thursday morning.

Stocks To Watch

These are five top stocks to watch in today’s stock market, including three Dow Jones leaders.

Source: IBD Data As Of Dec. 21, 2022

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla Stock

Tesla stock declined 0.2% Wednesday, extending a losing streak to four sessions and hitting another 52-week low. Shares lost 1% Thursday morning,

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 0.4% 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 0.3% 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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