Stocks Mixed As Tesla Skids On Weak Sales Results
The Dow Jones Industrial Average rose Thursday morning, as first-time unemployment claims fell. Tesla stock dived more than 8% on weak revenue results, even as Chief Executive Elon Musk predicted an “epic” fourth quarter.
First-time unemployment claims surprisingly dropped to 214,000, much lower than the expected rise to 235,000 vs. 228,000 in the previous week, per Econoday estimates.
Stock Market Today: Earnings Season Continues
The momentum of third-quarter earnings reports picked up, with results from Alcoa (AA), AT&T (T), Dow Jones member IBM (IBM), Lam Research (LRCX) and Tesla (TSLA).
Alcoa shares lost 4%. AT&T stock jumped 5%. Lam Research beat Wall Street’s targets for the September quarter and guided higher for the current period. But it warned that U.S. export restrictions on China will hurt its sales next year. Lam shares rose more than 2% in morning trade.
Airline stocks moved higher following earnings from American Airlines (AAL) and Alaska Air Group (ALK). American moved up 1%. Alaska declined 2%.
Among Dow Jones earnings, IBM climbed 3%, with Verizon (VZ) and American Express (AXP) due to report Friday morning. Elsewhere, tech titans Apple (AAPL) and Microsoft (MSFT) were mixed after today’s stock market open.
AutoZone (AZO), DoubleVerify (DV), Molina Healthcare (MOH) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Chevron (CVX) and Merck (MRK) — are among the top stocks to watch. Keep in mind that the ongoing stock market rally attempt is the perfect time for investors to build and perfect their watchlists of top growth stocks.
DoubleVerify and Vertex are IBD Leaderboard stocks. Merck and Molina Healthcare were featured in this week’s Stocks Near A Buy Zone column, along with two other top stock ideas. AutoZone was the IBD Stock Of The Day on Thursday. DoubleVerify was Tuesday’s IBD Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
After Thursday’s opening bell, the Dow Jones Industrial Average rose 0.6%. The S&P 500 moved up 0.3%, while the Nasdaq was up 0.45% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.4%, and the SPDR S&P 500 ETF (SPY) gained 0.3%.
The 10-year Treasury yield rose to 4.17% Thursday morning, after Wednesday’s jump to 4.12%. The 10-year Treasury yield on Wednesday settled at its highest level since July 23, 2008, per Dow Jones Market Data.
U.S. oil prices rose more than 2% Thursday, looking to add to Wednesday’s rebound as Chinese authorities flashed the first signs of easing the county’s stringent Covid rules. West Texas Intermediate futures moved above $87 a barrel. Last week, WTI futures topped $93 a barrel.
Stock Market Rally Attempt Continues
On Wednesday, the Dow Jones Industrial Average eased 0.3%, while the Nasdaq composite and S&P 500 declined 0.7% and 0.85%, respectively.
Wednesday’s The Big Picture commented, “The market is still working on a rally attempt, despite high volatility and multiple whipsaws in the last week. Investors should watch patiently, from the sidelines if possible, waiting for a decisive sell-off or the elusive follow-through rally day.”
Psychologically, watching the market work through repeated rally attempts can be a challenging process. Investors want to keep watchlists handy, in order to jump on follow-through day breakouts. But not all follow-throughs work, so buying too soon or with too much conviction can lead to frustration.
This is why it’s important to raise exposure slowly and methodically, as the uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron continues to hold above support at its 50-day line and is consolidating below a 182.50 buy point ahead of the company’s Oct. 28 earnings release. An early entry at 166.93 is also in play. Chevron shares rose 1.2% Thursday morning, moving up with rising oil prices.
CVX stock boasts a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Dow Jones member and IBD 50 stock Merck remains in buy range past a double bottom‘s 93.12 buy point, according to IBD MarketSmith pattern recognition. Keep in mind the ongoing market correction should keep you on the sidelines. The stock’s relative strength line hit a new high last week. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares lost 0.65% Thursday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: AutoZone, DoubleVerify, Molina, Vertex
Auto parts leader and recent IBD Stock Of The Day AutoZone is about 3% away from a cup base’s 2,362.34 buy point. Keep an eye out for a potential handle to offer a lower entry. AutoZone shares were up nearly 1% early Thursday, as Raymond James maintained its overweight rating and raised its price target to 2,500.
IBD Leaderboard stock and DoubleVerify is just shy of a flat base’s 30.02 buy point, according to IBD MarketSmith chart analysis. DoubleVerify provides digital media measurement and data analytics. The company designs verification technology to help reduce ad fraud. It also promises to ensure placement of ads in safe and suitable environments for brands. Shares were up 1.3% Thursday.
Molina Healthcare finished Wednesday about 2% away from a flat base’s 361.35 buy point. The stock’s RS line hit a new high last week, confirming the health care stock as a leader to watch. Molina’s earnings are due Oct. 26. MOH stock was up 0.5% early Thursday.
Biotech leader Vertex Pharmaceuticals is again testing its 50-day line amid Wednesday’s 2.7% slide. Shares are still building a flat base that has a 306.05 buy point and an early entry at 296.90. Its RS line made a new high in recent sessions, a sign of big stock market outperformance. Earnings are due Oct. 27. Shares edged higher Thursday morning.
Tesla earnings topped expectations late Wednesday, though revenue came in on the soft side. Although CEO Musk predicted an “epic” fourth quarter, he appeared to shift the goal posts somewhat on Tesla’s full-year delivery target.
Musk also said a “meaningful buyback” was likely in 2023, throwing around a figure of $5 billion to $10 billion as realistic even in a difficult year.
Earnings beat estimates by 5 cents a share, rising 69% from a year ago to $1.05 per share. Revenue of $21.454 billion, up 56% from a year ago, fell short of estimates of $22.3 billion.
Join IBD experts as they analyze leading stocks in the current stock market rally attempt on IBD Live
Tesla stock moved up 0.8% Wednesday, rising for a third straight day. Last week, shares closed at their lowest level since June 2021. Despite a two-day win streak, shares remain about 47% off their 52-week high. Tesla stock skidded more than 8% Thursday morning in the wake of the company’s earnings results.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares inched up 0.1% Wednesday, but are still about 21% off their 52-week high and below their 50- and 200-day lines. AAPL stock moved down a fraction Thursday morning.
Microsoft dropped 0.85% Wednesday, ending a two-day win streak. Shares are still trying to rebound from last week’s 52-week low price. The software giant is about 32% off its 52-week high. Shares moved up 0.2% Thursday morning.
Apple earnings are expected on Oct. 27, while Microsoft’s are due Oct. 25.
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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