The Dow Jones Industrial Average fell Wednesday morning as it threatened to extend a three-day losing streak. Tesla stock will officially split on Wednesday when the number of shares outstanding increases to 4 billion, but trading at the new 3-to-1 adjusted price will begin on Thursday.
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Advanced auto parts (PAA), Dycom (DY), Intuitive (INTU), Nordström (JWN), Toll Brothers (To land Urban outfitters (URBN) are the main drivers of earnings on Wednesday.
AAP shares slipped 8% while Dycom rose around 3%. Intuit jumped 8% while Nordstrom plunged 16%. Toll Brothers fell 3% after topping earnings views, but lowered its full-year guidance on shipments. And Urban Outfitters fell more than 2% in early trade.
Leader in electric vehicles You’re here (TSLA) traded up 2% on Wednesday. Elsewhere, technology leaders from Dow Jones Apple (AAPL) and Microsoft (MSFT) were mixed after the stock market opened today.
In the current stock market downturn, Albemarle (ALB), Arista Networks (A NET), Axcelis Technologies (AATC) and Costco (COST) – as well as Dow Jones stocks Amgen (AMGN) and McDonald’s (MCD) – are among the best stocks to buy and watch.
The Costco stock was added to the IBD rankings following last week’s breakout move. Arista and Axcelis were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Powell’s Speech
Early Wednesday, the Dow Jones Industrial Average fell 0.1%, while the S&P 500 edged higher. The tech-heavy Nasdaq rose 0.2% in morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.2% and the SPDR S&P 500 ETF (SPY) was flat in early trading.
The 10-year Treasury yield rose to 3.09% early Wednesday, following Tuesday’s rise. This week, the 10-year Treasury yield is above the 3% level for the first time since July 21.
U.S. oil prices continued to rebound on Wednesday after last week’s losses saw West Texas Intermediate futures hit their lowest level since January. WTI futures rose 1% early Wednesday, trading above $94 a barrel.
Members of the Federal Reserve board will be keeping a close eye on July’s durable goods, which came out of the Commerce Department at 8:30 a.m. ET. New orders were flat in July compared to the previous month, with a 0.3% increase minus transportation orders. Economists were forecasting a sharp slowdown from June – a 0.5% gain for overall orders and a 0.1% increase minus transportation orders. Overall orders rose 2% in June.
Fed Chief Jerome Powell will deliver a speech on the central bank’s economic outlook Friday from Jackson Hole, Wyo. The Fed has raised interest rates this year in an attempt to bring down inflation, but has sent more and more mixed signals on the rises to come.
Last week’s Fed minutes appeared to push back market expectations for a dovish pivot, following a six-week stock market rally following the June 14-15 meeting. Markets are pricing in about a 58% chance of a 75 basis point rate hike on September 21. A week ago, there was a 39% chance.
Stock market downturn
On Tuesday, the stock market posted another disappointing performance as early gains faded at the close. The Dow Jones Industrial Average lagged, falling 0.5%, while the S&P 500 lost 0.2%.
Tuesday’s The Big Picture column commented: “Airline supply appears to be a problem as the Nasdaq and S&P 500 have fallen after approaching or touching their downward-sloping 200-day moving averages. Indeed, both have now struggling to maintain their 21-day lines.”
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Five Dow Jones stocks to watch now
Dow Jones stocks to watch: Amgen, McDonald’s
Dow Jones Amgen stock is building a flat base that has a buy point of 258.55, amid strong performance from biotechs so far this year. An early entry at 253.87 is also in play. Shares gave up their 50-day support level on Tuesday’s 1% decline. The stock traded down 0.5% on Wednesday morning.
AMGN stock is posting a solid 92 out of a perfect IBD composite rating of 99, according to the IBD stock balance sheet. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.
Shares of McDonald’s are still trading below an entry of 265.56 cup with handle after Tuesday’s 0.9% loss, according to IBD MarketSmith’s chart analysis. MCD shares edged higher on Wednesday morning.
4 most important growth stocks to buy and watch in the currentrStock market rally
Top stocks to watch: Albemarle, Arista, Axcelis, Costco
Lithium producer Albemarle is squarely in the buy range after rallying Monday from a buy point of 273.78 in a large cup base with handle. The 5% buy zone rises to 287.47. In the previous weeks, shares have moved above a smaller cup with the 250.25 buy point of the handle. The stock was down 0.1% on Wednesday morning.
Arista Networks, one of last week’s IBD 50 Stocks To Watch picks, continues to rise off the right side of a double-bottom base that offers a buy point of 143.67. With the stock around 11% from the current entry, wait for a handful – which is likely forming now – to offer a more risk-optimal buying point. Arista’s RS line has been trending higher and is approaching a new high. ANET shares fell slightly early on Wednesday.
IBD Leaderboard Costco stock fell further below its buy point of 552.81 from a cup with handle as the shares were down 0.6%. Wait for a bullish resumption of the entry before buying stocks. Shares added 0.3% early Wednesday.
Chip equipment maker Axcelis Technologies continues to build a mug with handle that offers a buy point of 79.93, according to IBD MarketSmith’s chart analysis. The stock fell 0.5% on Wednesday morning.
Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live
Tesla Stock
Tesla stock rebounded 2.3% on Tuesday, ending a five-day losing streak. Shares of the electric vehicle giant rose 2% on Wednesday morning, looking to add to Tuesday’s gains. Tesla stock will begin trading at the new adjusted 3-to-1 price on Thursday.
Tesla stock struggled to overcome resistance around its 200-day line. Tesla is about 30% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 0.2% on Tuesday as the stock continues to build the right side of a cut base that has a buy point of 179.71. Another interpretation could be a large double bottom that dates back to January. Either way, the point of purchase is the same. On the upside, the recent losing streak will likely result in a handful, which would offer a lower entry.
On the upside, the stock’s relative strength line is holding new highs, indicating strong stock market outperformance. Shares rose 0.7% on Wednesday morning.
Microsoft fell another 0.5% on Tuesday, extending a six-session losing streak and moving further away from its long-term 200-day line. The stock rose slightly early on Wednesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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