The Dow Jones Industrial Average dropped 200 points Wednesday morning after much stronger-than-expected U.S. retail sales data. Meanwhile, Tesla stock reversed lower even though Barclays started coverage with an overweight rating and a 275 price target.
The Commerce Department's January retail sales jumped 3% on the month, higher than estimates that called for a 1.7% rise following December's 1.1% fall. Excluding autos, retail sales rose 2.3% for the month vs. a 0.7% estimate. And excluding autos and gas, retail sales gained 2.6% month over month vs. a 0.6% estimate.
Elsewhere on the economic front, the New York Fed's Empire State manufacturing index came in better than expected, though still in contraction territory at -5.8 vs. an expected -18.5 reading, up from January's fall to -32.9. Lastly, the February housing market index is due at 10 a.m. from the National Association of Home Builders. The report is expected to show homebuilder sentiment rising to 37 from 35 in February.
Airbnb, Devon Energy and Tripadvisor reported earnings after Tuesday's close.
ABNB stock surged around 8%, while Devon shares dived more than 7%. TRIP stock soared more than 8%.
Meanwhile, Analog Devices, Biogen, Kraft Heinz, Roblox and Trade Desk reported Wednesday morning.
Analog shares jumped more than 6% after a solid fiscal first-quarter sales and earnings beat. Biogen lost nearly 1%. Kraft shares lost 0.6%, as Trade Desk jumped 15%. Roblox spiked more than 18% after its report.
Stock Market Today
Electric-vehicle leader Tesla traded down 0.5% Wednesday morning, while Dow Jones tech giants Apple and Microsoft were modestly lower after today's stock market open.
Dexcom, IBD Leaderboard stock Snowflake, Inspire Medical Systems and Wingstop — as well as Dow Jones stocks Caterpillar, JPMorgan Chase and Salesforce — are among the top stocks to buy and watch, amid the recent pullback in the market rally.
Snowflake is an IBD Leaderboard stock. Inspire and Dexcom were recent IBD Stock Of The Day subjects. Salesforce was featured in this week's Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday's opening bell, the Dow Jones Industrial Average fell 0.5%, and the S&P 500 moved down 0.4%. The tech-heavy Nasdaq composite lost 0.2% in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust traded down 0.35% and the SPDR S&P 500 ETF fell 0.5% early Wednesday.
The 10-year U.S. treasury yield rose to 3.76% Tuesday, rebounding from Monday's losses. Then the 10-year yield ticked higher to 3.78% Wednesday morning after the retail sales numbers.
Oil prices threatened to extend a losing streak to three sessions, falling modestly Wednesday morning. West Texas Intermediate futures traded below $79 a barrel ahead of the Energy Information Agency's weekly release of petroleum inventories.
Stock Market Rally
On Tuesday, the Dow Jones Industrial Average lost 0.5%, and the S&P 500 inched lower. Meanwhile, the Nasdaq composite advanced 0.6% after reversing from sharp morning losses.
Tuesday's The Big Picture column commented, "The prospect of more interest rate hikes — and rates staying higher for longer — rattled the stock market for a while Tuesday as Wall Street weighed the latest report on inflation. But the market uptrend showed strength once again as major stock indexes pared early losses or reversed higher, and closed near session highs."
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Caterpillar, JPMorgan, Salesforce
Top Dow Jones stock Caterpillar is still in buy range above a 239.85 flat-base entry, as it tries to find support around its 50-day moving average, according to IBD MarketSmith chart analysis. Shares fell 1.5% Tuesday, closing right at the 50-day line. CAT stock dipped 0.2% Wednesday morning.
Banking giant JPMorgan is still in the 5% buy range above a 138.76 flat-base buy point after a third straight gain Tuesday. The 5% buy zone tops out at 145.70. JPM shares inched lower early Wednesday. JPM stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Featured in this week's Stocks Near A Buy Zone column, Salesforce is building a cup with handle that has a 178.94 buy point. Shares lost 0.65% Tuesday. CRM stock was down a fraction early Wednesday.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Inspire, Snowflake
Recent IBD Stock Of The Day Inspire Medical Systems closed squarely in the 5% buy area past a flat base's 262.64 buy point amid Tuesday's 0.3% drop, according to IBD MarketSmith pattern recognition. The buy zone tops out at 275.77. INSP stock shows a modest 84 IBD Composite Rating. INSP stock rose 0.3% Wednesday.
Backstory: The company sells an implantable device to treat sleep apnea through electrical stimulation of the nerves — a process called neurostimulation.
Recent IBD Leaderboard addition Snowflake is approaching an early entry at 178.80, as the software leader moves up the right side of a deep cup base that features a 205.76 buy point. SNOW stock gained 0.8% Wednesday morning.
Backstory: The software firm offers a new way for enterprises and large organizations to access, arrange and analyze their data. To help customers maximize their investments in data analytics, Snowflake charges by time of usage. Earnings are due out March 1.
Dexcom, Wingstop Eye Latest Buy Points
Dexcom shares rose 0.3% Tuesday, extending a win streak to three sessions and moving further up the right side of a cup base with a 125.65 buy point. Shares could also form a handle over the next few weeks, so keep an eye out for a potential lower entry. The stock was up 0.2% Wednesday.
Backstory: On Feb. 9, Dexcom reported stronger-than-expected quarterly results. The beat comes as Dexcom's newest continuous glucose monitor, or CGM, gains steam in the U.S. and Europe. These body-worn devices keep track of blood sugar in real time. The Food and Drug Administration cleared Dexcom's new device, G7, last year.
Wingstop is breaking out past a 169.04 buy point in a cup with handle, rallying 4.6% Tuesday. WING stock added 1% Wednesday.
Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the U.K. The company added a net 40 stores in the prior quarter. Earnings are due out Feb. 22.
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Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today's stock market, including two Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Inspire Medical Systems | 262.64 | Flat base | |
| Visteon | 152.20 | Cup base | |
| Caterpillar | 239.95 | Flat base | |
| Snowflake | 205.76 | Cup base | |
| JPMorgan | 138.76 | Flat base | |
| Wingstop | 169.04 | Cup with handle |
Source: IBD Data As Of Feb. 15, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock raced 7.5% higher Tuesday, snapping a two-day skid. Despite their strong rebound since Jan. 6, shares are still below the 200-day line. Shares closed Tuesday around 46% off their 52-week high.
Shares looked to add to Tuesday's gains, but reversed 0.5% lower Wednesday morning even after Barclays initiated coverage on the EV giant with an outperform rating and a 275 price target.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 0.4% Tuesday, ending a two-day win streak. Shares are around 15% off their 52-week high and are moving up the right side of a new base. Apple shares fell 0.1% Wednesday.
Microsoft stock moved up 0.3% Tuesday, adding to Monday's jump. Shares are above their 200-day line and about 14% off their 52-week high after recent gains. MSFT stock was down 0.9% Wednesday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
