Futures Fall After Jobless Claims, Retail Sales Data

Dow Jones futures fell more than 400 points early Thursday after initial jobless claims and U.S. retail sales data were released. The stock market threatened to add to Wednesday’s Federal Reserve-fueled losses, with sellers pressuring chip stocks after analysts warned of industry oversupply. And Tesla stock is set to hit a new low after Chief Executive Elon Musk disclosed share sales worth more than $3.5 billion this week.

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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 (LEN) shares dropped more than 2% after the homebuilder’s fourth-quarter earnings results.

Snapchat-owner Snap (SNAP) fell more than 2% after Jefferies downgraded the stock from hold to buy. Chip stocks were under some early pressure, with Western Digital (WDC) down 5% after Goldman Sachs downgraded the stock to sell, warning of a looming oversupply in memory-chip markets. Nvidia (NVDA) dropped 2% as HSBC initiated coverage with a reduce rating, also citing a short-term chip inventory correction.

Electric-vehicle giant Tesla (TSLA) traded down 3%, set to hit a new 52-week low.

Among the Dow Jones stocks, Verizon Communications (VZ) rose 1% after a Morgan Stanley upgrade from equalweight to overweight. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were sharply lower ahead of today’s stock market open.

Allegro Microsystems (ALGM), IBD Leaderboard stock Dexcom (DXCM), KLA (KLAC) and United Rentals (URI) — as well as Dow Jones names Caterpillar (CAT), Home Depot (HD) and UnitedHealth Group (UNH) — 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.

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Dow Jones Today: Oil Prices, Treasury Yields

Ahead of Thursday’s opening bell, Dow Jones futures lost 1.1% vs. fair value, and S&P 500 futures declined 1.4%. Tech-heavy Nasdaq 100 futures sold off 1.7% in morning action, with Advanced Micro Devices (AMD) leading the declines.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.7% and the SPDR S&P 500 ETF (SPY) moved down 1.4% early Thursday.

The 10-year U.S. Treasury yield ticked lower to 3.48% 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 effectively flat Thursday morning, sitting atop a three-session advance. West Texas Intermediate futures traded above $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.

Five Dow Jones Stocks To Buy And Watch Now

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 0.7% 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 0.2% 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 unchanged early Thursday.

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

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 a fraction Thursday.

IBD Leaderboard stock Dexcom is trying to break out past a 123.46 buy point in a flat base and is just below the entry amid Wednesday’s 1.6% rally. Dexcom stock was flat early 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 flat premarket 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 inactive 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.

Source: IBD Data As Of Dec. 14, 2022

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

Tesla Stock

Tesla stock skidded another 2.6% Wednesday, falling sharply for a third straight day and hitting another 52-week low. Shares traded 3% lower Thursday after it was disclosed that CEO Musk sold more than $3.5 billion, or nearly 22 million Tesla shares this week. Tesla stock is set to hit a new 52-week low, trading below 153 a share in early 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% 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 0.8% early Thursday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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