Dow Jones futures dropped Wednesday morning, after a key jobs report and ahead of the Federal Reserve’s interest rate decision. Chip giant Advanced Micro Devices jumped after reporting quarterly earnings results late Tuesday.
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Released early Wednesday, the ADP National Employment Report showed October’s private payrolls added 239,000 jobs vs. 208,000 in September and above estimates. The report provides a preliminary gauge of monthly hiring, ahead of official numbers reported in Friday’s Labor Department jobs report.
Meanwhile, the Fed’s interest-rate decision is set for 2 p.m. ET, followed by Fed Chair Jerome Powell’s comments at 2:30. Investor sentiment shows an 88% probability of a 75 basis-point hike, according to the CME FedWatch Tool.
Key earnings movers Wednesday were Advanced Micro Devices (AMD), Airbnb (ABNB), Chesapeake Energy (CHK), CVS Health (CVS), Devon Energy (DVN) and Paycom Software (PAYC).
AMD stock rallied 6% despite missing Wall Street’s lowered expectations for the third quarter and disappointing with its sales guidance. ABNB stock tumbled 6% in early morning trade. Chesapeake stock rose less than 1%, while CVS stock was effectively unchanged. Devon shares reversed early gains and dipped 3%. And Paycom stock inched higher.
Electric-vehicle giant Tesla (TSLA) traded up a fraction Wednesday morning., while Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were mixed ahead of today’s stock market open.
Among the top stocks to buy and watch, Dycom (DY), IBD Leaderboard stock Cheniere Energy (LNG), IBD SwingTrader stock Dollar General (DG) and Pure Storage (PSTG) — as well as Dow Jones stocks Chevron (CVX) and UnitedHealth (UNH) — are among the top stocks to buy and watch. Keep in mind that the ongoing stock market rally is the perfect time for investors to look for stocks in their buy zones.
Cheniere is an IBD Leaderboard stock. Dollar General is an IBD SwingTrader stock. Pure Storage was featured in this week’s Stocks Near A Buy Zone column, along with three other top stock ideas. Pure Storage was also an IBD Stock Of The Day on Friday.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Wednesday’s opening bell, the Dow Jones futures lost 0.3%, while S&P 500 futures moved down 0.2% vs. fair value. Nasdaq 100 futures inched lower in morning action, with AMD and Match Group (MTCH) among the strongest advances.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded up 0.1%, and the SPDR S&P 500 ETF (SPY) lost 0.1%.
The 10-year Treasury yield held steady at 4.04% Wednesday morning ahead of the Fed’s rate hike decision. Meanwhile, U.S. oil prices traded barely higher, looking to hold Tuesday’s gains. West Texas Intermediate futures are riding support at their 50-day moving average, trading above $88 a barrel.
Stock Market Rally Continues
On Tuesday, the Dow Jones Industrial Average dropped 0.2%, while the S&P 500 declined 0,4%. The tech-heavy Nasdaq composite lost 0.9%.
Tuesday’s The Big Picture commented, “Wednesday afternoon’s announcement on interest rates and Fed Chair Jerome Powell’s press conference will have the stock market’s full attention. The indexes have bounced in recent weeks on hopes that, after this week’s expected 75-basis-point hike, the Fed will tone down its tightening strategy.”
Now is an important time to read IBD’s The Big Picture column. Following recent gains, investors have the green light to buy top stocks breaking out past correct buy points. But not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the new uptrend proves itself.
But not every follow-through results in a sustained uptrend, which is why investors need to gauge their level of exposure in the days and weeks that come after this signal, especially with the extra risk from the upcoming Fed meeting. You want to buy in sync with the market so that you don’t overcommit to an uptrend that may reverse on you.
And if the stock market starts to break down again, you can reduce exposure without losing too much capital.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Merck, UnitedHealth
Dow Jones member and IBD 50 stock Merck is out of buy range past a double-bottom baser’s 93.12 buy point, according to IBD MarketSmith pattern recognition. Merck shares lost 0.3% Wednesday.
Health care giant UnitedHealth is trying to break out past a cup with handle’s 553.23 buy point, according to IBD MarketSmith. Shares declined 1.4% Tuesday, giving up its latest entry. UNH stock was unchanged Wednesday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Watch: Cheniere, Dollar General, Dycom, Pure Storage
IBD Leaderboard stock Cheniere Energy is in buy range above a 178.69 buy point out of a cup with handle, according to IBD MarketSmith chart analysis, after Tuesday’s breakout day. LNG stock moved up 0.8% Wednesday morning.
IBD Swing Trader stock Dollar General fell further below a 259.75 buy point in a cup base. DG shares lost 0.4% Tuesday, falling for a second straight day. If the stock retakes this critical level, the 5% chase zone will go up to 272.74. DG shares were unchanged early Wednesday.
Dycom is trying to break out past a 120.55 buy point out of a cup base. Shares climbed 2.5% Tuesday, recapturing the buy point and moving back into the 5% buy zone that goes up to 126.58. Dycom shares were flat Wednesday,
Friday’s IBD Stock Of The Day, Pure Storage, broke out Tuesday past a 31.62 buy point amid a four-day win streak. The stock was inactive Wednesday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rose 0.1% Tuesday, continuing its recent rebound after hitting a new 52-week low last week. Still, shares are about 45% off their 52-week high and sharply below their 50- and 200-day moving average lines.
Shares of the EV giant moved up a fraction Wednesday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares declined 1.75% Tuesday, giving up more of Friday’s earnings-fueled surge. The stock is about 18% off its 52-week high, even after regaining its 50-day line last week. Now, shares have found resistance at their long-term 200-day line. Apple stock traded down 0.5% Wednesday.
Microsoft fell 1.7% Tuesday, holding near its recent lows. Shares hit a 52-week low on Oct. 13. The software giant remains about 35% off its 52-week high. Microsoft shares traded up a fraction Wednesday morning.
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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