The Dow Jones Industrial Average traded sharply higher Wednesday ahead of the Fed's crucial rate-policy decision this afternoon. Microsoft climbed on strong earnings results, while Boeing drifted higher on earnings. And Tesla earnings are due out after the close.
Among the Dow Jones leaders, Apple jumped 2.2% Wednesday, while an earnings-fueled Microsoft added around 6% in today's stock market.
Electric-vehicle leader Tesla traded more than 3% higher Wednesday. Lucid Group rose around 3%. And Chinese EV leaders Li Auto and Xpeng Motors were squarely higher after Wednesday's open.
Among Wednesday's top stocks to watch, American International Group, Baker Hughes, CF Industries and ConocoPhillips are near new buy zones. Keep in mind the current stock market status cautions investors to remain on the sidelines.
Microsoft and Tesla are IBD Leaderboard stocks. ConocoPhillips featured in this week's Stocks Near A Buy Zone column.
Dow Jones Today: Fed Decision
After the stock market open Wednesday, the Dow Jones Industrial Average climbed 0.8%, while the S&P 500 moved up 1.5%. The-tech heavy Nasdaq surged 2.5%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust rose 2.2% Wednesday, and the SPDR S&P 500 ETF moved up 1.5%.
The Federal Reserve's two-day meeting concludes with a policy decision due out at 2 p.m. ET, followed by comments from Fed Chief Jerome Powell. The Fed is expected to wrap up the rapid taper of its asset purchases in March and then start to raise interest rates in a bid to fight inflation. There is some speculation that Fed policymakers could speed up the bond taper yet again, ending asset purchases by mid-February instead of mid-March — signaling an even-faster shift to outright tightening.
The 10-year Treasury yield ticked down to 1.77% Wednesday morning. On Tuesday, the 10-year Treasury yield rose above 1.78%. Oil prices pushed higher, with West Texas Intermediate up 0.8% to above $86 a barrel.
Stock Market Sell-Off Continues
The Nasdaq and S&P 500 sold off sharply Tuesday in the wake of Monday's dramatic recovery. The current volatility underscores the importance of remaining in cash during market corrections.
Despite Tuesday's weakness, the indexes held above Monday's intraday lows, so the rally attempt is still intact. Monday was Day 1 of a new rally attempt. Be on the lookout for a follow-through day, which is when a major index posts strong gains in volume heavier than the prior day. Follow-throughs occur as early as Day 4 of the attempted rally.
Tuesday's The Big Picture cautioned: "The reversal off morning lows on Tuesday did not match the scale of Monday's breathtaking rebound. That may reflect a stance among equity trading desks across the land to wait and see what the Federal Reserve will say and do about inflation, which hit 7% at the consumer-prices level in December."
Amid this recent weakness, now is an important time to check out IBD's The Big Picture.
Five Best Dow Jones Stocks To Watch Now
Dow Jones Earnings: Boeing
Dow Jones stock Boeing reported earnings early Wednesday, sparking a 1% rise in morning trade. Boeing shares closed Tuesday almost 30% off their 52-week high amid a six-day losing streak.
Stock Market Earnings: Texas Instruments
Chipmaker Texas Instruments crushed analyst targets for the fourth quarter and guided higher for the current period. TXN shares rose more than 5% after sliding 2.5% on Tuesday.
Three Top Growth Stocks To Watch In The Current Stock Market Weakness
Stocks To Watch: AIG, Baker, CF, ConocoPhillips
AIG rose 1.3% Tuesday, closing further above the 50-day moving average. AIG shares are forming a cup-with-handle base with a 62.35 buy point, according to IBD MarketSmith chart analysis. The stock was up 1% Wednesday. AIG was IBD's Stock Of The Day on Jan. 19.
Energy leader Baker Hughes is back above a 27.76 cup-base buy point after Tuesday's 3.2% advance. Shares of the oilfield services and equipment leader were up another 1% Wednesday.
Fertilizer producer CF Industries is building an ascending base with a 74.87 buy point. Shares rebounded further from their 50-day line, rising 4.5% Tuesday. Bullishly, the stock's RS line hit a new high, indicating strong stock market outperformance. The stock was down 0.2% Wednesday.
Oil and gas giant ConocoPhillips is once again sharply extended above a 78.08 buy point in a consolidation following Tuesday's 4.9% climb. COP stock boasts a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The stock moved up more than 1% Wednesday.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
EV Stocks: Li Auto, Xpeng, Lucid Motors
Li Auto stock extended a losing streak to six sessions Tuesday, falling 6.75%. Shares closed further below their long-term 200-day line. Li Auto stock rose about 4% Wednesday.
Xpeng Motors slid 4.95% Tuesday, dropping further below its 200-day line. Shares moved up more than 4% Wednesday.
Among U.S.-based EV stocks, Lucid Motors shares rose more than 3% Wednesday. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base. Meanwhile, the stock's basing process ran into more trouble during last week's losses and the stock is once again back below the key 50-day line.
Tesla Earnings
Tesla stock rose more than 3% Wednesday, looking to snap a three-day losing streak. On Monday, the stock briefly hit its lowest level since Oct. 18 during the session's heavy midday losses. Shares are now sharply below their 50-day line and approaching their 200-day moving average line.
The stock traded as high as 1,243.49 on Nov. 4, but ended Tuesday about 26% off that 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock dropped another 1.1% Tuesday, falling further below the key 50-day line. Shares are about 4% past a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Shares rose 2.2% Wednesday.
Software leader Microsoft slid 2.7% Tuesday, closing below its long-term 200-day moving average line. Late Tuesday, Microsoft beat Wall Street's targets for the December quarter and guided higher for the March quarter. MSFT shares rallied more than 6% in morning trade.
If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watch lists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
