The Dow Jones Industrial Average dropped more than 300 points Tuesday morning on weak economic data and a surprise interest rate cut out of China, as investors also digested strong U.S. retail sales data from the Commerce Department. Meanwhile, Home Depot shares climbed after the company topped earnings estimates and launched a $15 billion share buyback.
Overnight, China's central bank lowered interest rates by 15 basis points to 2.5%, responding to weaker-than-expected industrial output and retail sales data for July. Regulators there also curtailed reporting of unemployment figures for the 16-24 age group, which had soared above 21% in June.
That stood in contrast to U.S. retail sales for July, which jumped 0.7%. That handily topped estimates for a 0.4% rise compared with June, which had a lower-than-expected gain of 0.2%.
Elsewhere, home building markets get a dose of updated data, with builder sentiment from the National Association of Homebuilders at 10 a.m. ET. The housing market index is expected to hold steady at 56 for August.
Early Tuesday, Cardinal Health, Home Depot, On Holding and Sea Limited were key earnings movers.
Cardinal Health shares rose 1.4% in morning trade, while Home Depot shares gained 0.8%. ONON stock dived 16%, as Sea Limited shares crumbled 27% in early action.
Stock Market Today
Electric-vehicle giant Tesla traded down more than 1% early Tuesday. Dow Jones tech icons Apple and Microsoft were lower after today's stock market open.
Other stock market leaders include Alphabet and Meta Platforms. GOOGL stock dropped 0.2%, while Meta shares traded down 0.3% in early action.
Costco Wholesale, Expro, SLB and MercadoLibre — as well as Dow Jones stocks Boeing, Intel and Visa — are among the best stocks to watch as the market's uptrend comes under increasing pressure.
Tesla and Costco are IBD Leaderboard stocks, while Boeing and SLB were recent IBD Stock Of The Day picks. Costco was featured in this Stocks Near A Buy Zone column. SLB is also an IBD SwingTrader stock.
Dow Jones Today: Oil Prices, Treasury Yields
After Tuesday's opening bell, the Dow Jones Industrial Average dropped 0.9%, while the S&P 500 lost 0.8%. The tech-heavy Nasdaq composite moved down 0.8% in morning action.
JPMorgan led the declines among Dow stocks, down more than 1%. Chipmaker ASML Holdings declined 1.4%.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 0.8%, while the SPDR S&P 500 ETF fell 0.85% early Tuesday.
Early Tuesday, the 10-year U.S. Treasury yield ticked higher to 4.2%, after settling at 4.18% Monday.
West Texas Intermediate oil prices have pulled back from early August highs, with WTI futures trading down more than 1% to below $82 a barrel. That leaves them about even for the month, with the $80 mark becoming the important indicator of support.
Stock Market Action
On Monday, the Nasdaq bounced 1.1%, posting its best day since July 28. The index closed slightly above the 50-day moving average, but has yet to break a downward trajectory. In other words, it's too soon to spot a bottom in the index.
This month, the Dow is down 0.7%. That compares with month-to-date losses of roughly 4% in the Nasdaq and Russell 2000 and 2.2% in the S&P 500. On Monday, the Dow edged up 0.1%, climbing into positive territory thanks to a last-minute rally in the stock market.
Monday's Big Picture column commented, "The diverging trends of the major stock market indexes make it hard to detect a clear direction. While the market remains unsettled, investors should be invested 60% to 80% in stocks. Taking some profits is a smart strategy right now, especially in those where you have gains of 20% or more. With fewer charts setting up in buy areas, investors should buy reluctantly."
Now is an important time to read IBD's The Big Picture column as the stock market pulls back from this year's highs.
Five Best Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks: Boeing, Intel, Visa
Aerospace giant Boeing broke out in recent weeks, topping a 223.91 flat-base entry. Shares are just out of the 5% buy area that went up to 235.11. BA stock moved down 0.5% Tuesday morning.
Chip giant Intel continues to etch a handle onto a cup base, offering a 37.19 buy point. Shares are about 4% away from their latest entry, with a 2.3% rally Monday. Intel shares lost 0.7% Tuesday.
Finally, Dow Jones payments leader Visa continues to hold in buy range past a 235.57 flat-base buy point, according to IBD MarketSmith pattern recognition. V stock fell 0.3% early Tuesday.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Stocks To Watch: Expro, SLB, MercadoLibre, Costco
Offshore drilling services provider Expro is trying to break out past a 23.72 buy point in a cup-with-handle base, according to IBD MarketSmith pattern recognition. XPRO stock was off 2% Tuesday morning.
IBD SwingTrader stock SLB, formerly known as Schlumberger, is breaking out past a 58.70 buy point in a cup with handle. Shares are in the buy area that tops out at 61.64. SLB stock declined 1.5% early Tuesday.
MercadoLibre jumped last week to break out past a cup base's 1,365.64 buy point. But MELI stock is under the buy point, as it dropped another 2.5% Monday. MELI stock dropped 0.9% Tuesday.
In IBD Leaderboard, Costco was a new half-size position Thursday. The megacap retailer is approaching a handle entry at 571.16, but it's already surpassed a mini trendline near 559-560. And on Tuesday morning, Costco stock was up 0.5%.
Learn How To Time The Market With IBD's ETF Market Strategy
Best Stocks In Stock Market Rally
These are four best stocks to buy and watch in today's stock market, including a Dow Jones leader.
| Company Name | Symbol | Correct Buy Point | Type Of Buy Point |
|---|---|---|---|
| MercadoLibre | 1,365.64 | Cup base | |
| Visa | 235.57 | Flat base | |
| SLB | 58.70 | Cup with handle | |
| Costco | 571.16 | Cup with handle |
Source: IBD Data As Of Aug. 14, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
IBD Leaderboard stock Tesla skidded another 1.2% Monday, closing further below its 50-day line. Amid the continued selling, it's clear that the stock requires more time to consolidate before a new entry.
TSLA stock threatened to add to Monday's losses, falling 1.3% Tuesday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock climbed 0.9% Monday, ending a three-day losing streak. The stock remains squarely below the 50-day line following sharp losses in recent weeks. Shares traded down 0.8% Tuesday.
Microsoft shares remain squarely below their 50-day line, a sign the stock needs more time to consolidate before a new buy point emerges. And on Tuesday morning, the stock fell 0.5%.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
