The Dow Jones Industrial Average sold off 300 points Tuesday after key economic data, led by factory orders and the JOLTS jobs report. Meanwhile, the Federal Reserve’s two-day policy meeting kicks off Tuesday. And electric-vehicle giant Tesla (TSLA) raised prices on its cars in Canada, China, Japan and the U.S.
A main focal point this week is the two-day Federal Reserve meeting, which will wrap up with a policy decision Wednesday afternoon. As of Tuesday morning, markets overwhelmingly expect a hike in the coming week and see odds of another in June at just above 35%, according to the CME FedWatch Tool.
If bank fragility and indications of a softening economy and job market lead the Fed to forgo a rate hike on Wednesday, markets likely will celebrate — at least briefly. Also, a hike and announcement of a pause on further hikes also could generate a relief rally. The third option, hiking and keeping an additional June hike on the table, likely wouldn’t go down well with Wall Street.
The Labor Department’s March Job Openings and Labor Turnover Survey — known as JOLTS — showed job openings tumbling to 9.59 million, below estimates for 9.6 million. Further, March’s factory orders rose 0.9% on the month vs. February’s 0.7% drop, slightly below estimates for a 1.3% rise.
Earnings Movers: Arista, Uber, Vertex
Arista Networks (ANET), CF Industries (CF), Diamondback Energy (FANG), Pfizer (PFE) and Lattice Semiconductor (LSCC) were on the move after earnings. So were MGM Resorts (MGM), NXP Semiconductors (NXPI), Uber Technologies (UBER) and Vertex Pharmaceuticals (VRTX)
Arista shares dived 10% in early trade despite the company’s better-than-expected earnings and sales results for the first quarter. CF Industries was up 1% after its earnings report.
Diamondback declined 2.3% after its first-quarter results, while Lattice shares climbed 4% after a strong earnings report. Pfizer rose around 1% in morning trade.
Finally, Vertex shares inched higher after the market open. They ended regular session trading out of buy range Monday, squarely above a 325.29 cup-base entry.
Stock Market Today
InMode (INMD), IBD Leaderboard stock Las Vegas Sands (LVS), Arista Networks and Paccar (PCAR) — as well as Dow Jones stocks JPMorgan Chase (JPM), Nike (NKE) and Visa (V) — are among the top stocks to watch in the struggling stock market uptrend.
Dow Jones Today: Oil Prices, Treasury Yields
After Tuesday’s opening bell, the Dow Jones Industrial Average lost 1%, and the S&P 500 moved down 0.95%. The tech-heavy Nasdaq composite fell 0.8% in morning action, with Broadcom (AVGO) 2.4% lower and NXP Semiconductors up 5%, the bigger moves on the index.
The 10-year U.S. Treasury yield on Tuesday traded down to 3.54%. Last week, the 10-year Treasury yield snapped a win streak. It remains solidly off its early-April lows.
U.S. oil prices edged lower Tuesday, as West Texas Intermediate continued to bob just above $75 a barrel. Prices had pulled back from an April 12 high above $83 a barrel.
Stock Market Rally Struggles
On Monday, the Dow Jones Industrial Average fell 0.1%, with JPMorgan one of the big winners. JPM stock rallied 2.1%. The S&P 500 edged lower, while the tech-heavy Nasdaq composite lost 0.1%.
Monday’s Big Picture column commented, “An invested percentage of 20% to 40% is conservative, but it doesn’t make sense to have aggressive exposure to stocks in front of another busy week of earnings reports, the Fed meeting and the jobs report on Friday.”
Now is an important time to read IBD’s The Big Picture column with the stock market still struggling to maintain its uptrend.
Dow Jones Stocks To Buy And Watch: JPMorgan, Nike, Visa
JPMorgan shares rallied past a cup-with-handle’s 141.88 buy point, but closed below the entry Monday, with a 2.1% rally, according to IBD MarketSmith pattern recognition. JPM stock was down 0.2% Tuesday morning.
Nike shares rose 0.95% Monday, breaking out past a cup-with-handle’s 127.59 buy point. NKE stock fell 1.2% early Tuesday.
Visa shares remain in buy range above a 230.15 cup-with-handle buy point. The buy range goes up to 241.66. V stock was down 0.9% Tuesday.
Best Stocks To Buy And Watch: InMode, Paccar
InMode finished Monday just shy of a cup-with-handle’s 38.48 buy point, with a 0.9% climb, according to IBD MarketSmith. INMD stock was down 5% after earnings results early Tuesday.
Backstory: The company makes noninvasive platforms that tighten skin and obliterate fat cells. It’s also moving into the women’s health realm with gynecological offerings. UBS analyst Danielle Antalffy says InMode provides a lower-cost alternative to traditional plastic surgery.
Paccar is finding support around its 50-day line, as shares extended a win streak to three sessions Monday. The stock is approaching a flat base’s 76.82 buy point, with an early entry at 75.83 also in play. Paccar shares fell 1% Tuesday morning.
Backstory: The producer of heavy-duty semi-trucks topped first-quarter estimates Tuesday, reporting a 96% earnings spike. At CES 2022, Paccar exhibited connected and autonomous trucks. The company behind the Kenworth, Peterbilt and DAF nameplates showcased three vehicles.
Arista Networks, Las Vegas Sands
Arista Networks is building a flat base with a 171.54 buy point, as it finds support around its 50-day line. Earnings came out late Monday and ANET stock dived 10% Tuesday morning. Shares opened below their 50-day line, a key support level to watch.
Backstory: Santa Clara, Calif.-based Arista sells computer network switches that speed up communications among racks of computer servers packed into “hyperscale” data centers. These internet data centers are designed to ratchet up computing horsepower when demand surges.
IBD Leaderboard stock Las Vegas Sands moved further out of the 5% buy range above a 60.40 buy point in a cup with handle, as LVS stock rose 1.6% Monday. The buy zone topped out at 63.42. Shares dipped 0.6% Tuesday.
Backstory: In recent weeks, Las Vegas Sands smashed earnings expectations for the first quarter and signaled a “robust recovery” in China’s Macau gaming hub. The casino stock posted earnings of 28 cents per share, up from a loss of 40 cents per share a year ago. Revenue vaulted nearly 125% to $2.12 billion. On Monday, Macau officials said April gaming revenue surged 450% year over year to hit a three-year high.
Best Stocks To Buy And Watch In Stock Market Rally
These are four best stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|InMode||(INMD)||38.48||Cup with handle|
|Nike||(NKE)||127.59||Cup with handle|
|Visa||(V)||230.15||Cup with handle|
|JPMorgan||(JPM)||141.88||Cup with handle|
Source: IBD Data As Of May 1, 2023
Tesla stock slid 1.5% Monday, holding near its lowest level since Jan. 26. In recent weeks, shares triggered the 7%-8% loss rule from a buy point at 200.76 in a cup with handle. And they are trading sharply below their 50-day line, a key level. The stock closed Monday 50% off its 52-week high.
TSLA stock looked to bounce back from Monday’s losses, trading up 2% early Tuesday.
The EV giant hiked prices in a range of up to $290 in Canada, China, Japan and the U.S. Tesla raised the starting price point by $250 on the base model Model Y and Model 3 in the U.S. The company has been cutting prices since the start of the year.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares edged slightly lower Monday, snapping a two-day win streak. They remain solidly above a 157.48 buy point and out of the buy range that ran up to 165.35. AAPL stock rose 0.4% early. Apple reports its fiscal second-quarter results on Thursday.
Microsoft shares are sharply above a flat base’s 276.86 buy point despite a 0.55% drop Monday. The 5% buy area went up from the buy point to 290.70. MSFT stock hit a 52-week high on Friday. On Tuesday morning, MSFT stock gained 0.7%.
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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