Dow Jones futures rose after Thursday’s CPI inflation report and the Labor Department’s first-time jobless claims. Key Apple chip supplier Taiwan Semiconductor Manufacturing (TSM) jumped 3% after reporting mixed Q4 results, while Netflix stock rallied on an analyst upgrade.
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CPI Inflation Report, Jobless Claims, Earnings
December’s CPI inflation report came out at 8:30 a.m. ET. Consumer prices fell 0.1% in December after November’s 0.1% increase, cooler than Econoday’s unchanged estimates, but in line with other Wall Street estimates. Year over year, prices were up 6.5%, down from 7.1% in November, also matching estimates. Core prices, which exclude and food and energy costs, rose 5.7% year over year, also down slightly from 6% in November and in line with estimates.
Meanwhile, the Labor Department’s initial unemployment claims rose to 205,000 vs. 204,000 in the previous week, below Econoday expectations for a rise to 215,000.
KB Home (KBH) reported after the close Wednesday, sparking a 3% fall in early morning trade. The company missed earnings and revenue estimates for its fourth quarter. And the homebuilder gave a lackluster Q1 housing forecast and suggested it’s cutting prices to boost homebuying demand.
Airline stocks were in motion, and American Airlines (AAL) jumped more than 4% after raising its revenue estimates for the fourth quarter due to strong demand and high fares. Netflix (NFLX) climbed more than 1% after Jefferies upgraded the streaming giant from hold to buy, with a raised price target of 385.
Mercado Libre (MELI) pounded out a 6.9% gain after Reuters reported that the chief financial officer for competitor Americanas resigned after the discovery of $3.88 billion in accounting inconsistencies.
Electric-vehicle leader Tesla (TSLA) traded a fraction higher Thursday, and is sitting on a gain of almost 9% for the week. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were up and down ahead of today’s stock market open.
Deere (DE), IBD Leaderboard watchlist stock Fluor (FLR), IBD Stock Of The Day Medpace (MEDP) and Rio Tinto (RIO) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Walmart (WMT) — are among the top stocks to buy and watch with the market testing the strength of a new rally.
Medpace is an IBD Leaderboard stock. Caterpillar and Rio were featured in this week’s recent Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
Before Thursday’s opening bell, Dow Jones futures rose 0.3% above fair value. S&P 500 futures gained 0.4%. And tech-heavy Nasdaq 100 futures rose 0.35% in morning action after the CPI inflation report.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% and the SPDR S&P 500 ETF (SPY) traded up 0.2% early Thursday.
The 10-year Treasury yield ticked lower to 3.51% Thursday morning, set to fall for a second straight day.
Oil prices leaned toward a sixth straight advance, up more than 6% for the week after a 3% pop on Wednesday. West Texas Intermediate futures rose more than 1%, topping $78 a barrel.
Stock Market Rally
On Wednesday, the Dow Jones Industrial Average closed up 0.8%, and the S&P 500 rose 1.3%. The Nasdaq composite outperformed, advancing 1.8% and extending a win streak to four sessions.
Wednesday’s The Big Picture column commented, “IBD raised its outlook to ‘confirmed uptrend’ last week, in recognition of stronger stock market price action, fueled by the new year’s optimism. That has played out in the first two weeks of January, with progressively higher prices and legitimate buying of 2022’s most beaten-down tech names.”
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, Walmart
Dow Jones member Caterpillar is at the top of its buy range above a flat base’s 239.95 buy point following Wednesday’s 0.1% rise, according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. Shares edged higher Thursday.
CAT stock shows a strong 98 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.
Energy giant Chevron is finding stout resistance at its 50-day line, as it continues to build a cup base that has a 189.78 buy point. CVX shares rose 0.3% Thursday morning, amid the ongoing rise in oil prices.
Discount retailer Walmart is once again above its 50-day line following Wednesday’s 0.9% climb. Shares are building a cup-with-handle base that has a 154.74 buy point and are about 5% away from the latest entry. Walmart shares edged lower Thursday morning.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Deere, Fluor, Medpace, Rio
Recent IBD Stock Of The Day, Deere, continues to trace a flat base with a 448.50 buy point. Shares have their eye on the buy point as they rebound from a test of 50-day support and are just 3% away from the entry. Deere shares were unchanged Thursday morning.
IBD Leaderboard watch list stock Fluor is building a flat base that has a 36.16 buy point, as shares moved further above their 50-day line Wednesday. FLR stock was flat early Thursday.
Tuesday’s IBD Stock Of The Day Medpace extended its win streak to four sessions, with a 1.5% rise Wednesday. On Tuesday, shares moved above an early entry at 220.09. Meanwhile, the stock is building a consolidation with a correct buy point at 235.82. Medpace shares were unchanged Thursday.
Rio Tinto inched lower Wednesday, still holding above a 73.45 buy point out of a cup with handle. The buy area runs up to 77.13. Rio shares traded up 2% Thursday.
Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Deere | (DE) | 448.50 | Flat base |
| Fluor | (FLR) | 36.16 | Flat base |
| Rio Tinto | (RIO) | 73.45 | Cup with handle |
| Medpace | (MEDP) | 235.82 | Consolidation |
| Caterpillar | (CAT) | 239.95 | Flat base |
| Chevron | (CVX) | 189.78 | Cup base |
| Walmart | (WMT) | 154.74 | Cup with handle |
Source: IBD Data As Of Jan. 12, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rallied 3.7% Wednesday, closing at its highest level since Dec. 22. Shares remain sharply below their 50- and 200-day lines. Last week, shares hit a 52-week low at 101.81. Tesla stock closed Wednesday about 68% off its 52-week high.
Shares of the EV giant looked to add to Wednesday’s gains, trading up 0.3% Thursday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 2.1% Wednesday, rising for a fourth straight session. Last week, the stock hit a new 52-week low of 124.17. The stock remains around 26% off its 52-week high. AAPL stock traded a fraction higher Thursday.
Microsoft stock rallied 3% Wednesday, extending a win streak to four trading days. The software giant is about 27% off its 52-week high and is still just above its 52-week low of 213.43, reached on Nov. 4. Microsoft shares lost a fraction early Thursday.
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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