The Dow Jones Industrial Average sold off more than 400 points Thursday after a stronger-than-expected ADP employment report. Meanwhile, the December jobs report is due Friday morning.
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Cryptocurrency-focused Silvergate Capital (SI) plunged 46% Thursday morning after the bank was forced to sell assets at a steep loss to cover about $8.1 billion in withdrawals during the collapse of crypto exchange FTX. The bank also laid off 40% of its staff, or about 200 employees. Finally, the company halted plans to launch its own digital currency.
ADP’s December National Employment Report, a precursor to Friday’s jobs report, showed growth of 235,000, much higher than the expected 145,000 rise. Meanwhile, the Labor Department’s first-time unemployment claims fell sharply to 204,000 vs. 225,000 in the previous week.
Lastly, the December services Purchasing Managers’ Index was slightly higher than expected, with a 45.0 reading vs. 44.4 estimate, still in contraction mode. The Institute for Supply Management’s December services index is due out on Friday.
On the earnings front, companies reporting Thursday morning include Conagra (CAG), Constellation Brands (STZ) and Dow Jones stock Walgreens Boots Alliance (WBA).
Conagra shares climbed around 2% in morning trade, while Constellation Brands slipped 3%. And Walgreens stock declined more than 4%, dragging on the Dow despite posting better-than-expected earnings and sales results.
Amazon (AMZN) stock was up fractionally after the company announced plans to lay off more than 18,000 employees. Electric-vehicle leader Tesla (TSLA) lost 4.6% Thursday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were up and down after today’s stock market open.
Cardinal Health (CAH), Deere (DE), Medpace (MEDP) and IBD Leaderboard stock Neurocrine Biosciences (NBIX) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Walmart (WMT) — are among the top stocks to consider for investor watchlists. Keep in mind the ongoing market weakness should keep investors on the sidelines.
Neurocrine is an IBD Leaderboard stock. Caterpillar and Medpace were recent IBD Stock Of The Day companies. And Cardinal Health was featured in last week’s Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
After Thursday’s opening bell, the Dow Jones Industrial Average lost 1.2% vs. fair value. The S&P 500 fell 1.3%. And tech-heavy Nasdaq dropped 1.5% in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.5% and the SPDR S&P 500 ETF (SPY) moved down 1.3% early Thursday.
The 10-year Treasury yield ticked higher to 3.76% Thursday morning after the strong jobs data, looking to snap a two-day losing streak that saw the 10-year yield drop sharply.
Meanwhile, oil prices rebounded Thursday morning after two straight days of sharp losses. West Texas Intermediate futures rose more than 2%, trading above $74 a barrel, down more than 7% so far for the week.
Stock Market Correction
On Wednesday, the Nasdaq composite rose 0.7%, and the S&P 500 climbed 0.75%. The Dow Jones Industrial Average followed up with a modest gain of 0.4%.
Wednesday’s The Big Picture column commented, “And as seen in the Market Pulse table, Wednesday’s gains do not change the outlook for stocks. This means buying stocks still harbors outsize risk. But forget about your most ambitious 2023 resolution now. Rather, today is the best moment to track leadership in terms of sectors, industry groups and individual stocks.”
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Caterpillar, Chevron, Walmart
Dow Jones member Caterpillar reclaimed its flat base’s 239.95 buy point during Wednesday’s 1% rally, according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. Shares inched lower 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 continues this week’s fall, declining another 1.1% Wednesday. Despite the losses, shares are building a cup base that has a 189.78 buy point. CVX shares rose 0.7% Thursday morning, bouncing with oil prices.
Discount retailer Walmart is building a cup with handle that has a 154.74 buy point. But shares are below their 50-day line after sharp losses in recent weeks. Walmart shares edged lower Thursday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Cardinal Health, Deere, Medpace, Neurocrine
Cardinal Health, a recent IBD Stock Of The Day, snapped a six-day losing streak Wednesday, but is still below its 50-day line. CAH stock was unchanged Thursday.
Recent IBD Stock Of The Day, Deere, is building a flat base with a 448.50 buy point, as it looks to find support around its 50-day line. DE stock traded flat Thursday morning.
Medpace finally gave up support at its 50-day line this week, indicating the medical leader needs more time to consolidate, which is normal with the market trend in a correction. For now, the correct buy point stays at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock was inactive Thursday.
IBD Leaderboard stock Neurocrine Biosciences is rebounding from support at its 50-day line. A flat base is close to forming and could form as early as this week. If it does finish, the flat base will show a buy point at 129.39, with an early entry at 122.93. NBIX stock was unchanged.
Stocks To Watch In Ongoing Stock Market Correction
These are six top stocks to watch in today’s stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Cardinal Health | (CAH) | 81.67 | Flat base |
| Deere | (DE) | 448.50 | Flat base |
| 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. 5, 2023
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla Stock
Tesla stock bounced more than 5% Wednesday, recovering a part of Tuesday’s dive. This week, shares hit a 52-week low at 104.64 and are about 72% off their 52-week high.
Shares threatened to give up Wednesday’s gains, falling more than 4.5% Thursday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 1% Wednesday, bouncing back after hitting a new 52-week low at 124.17 on Tuesday. The stock is more than 30% off its 52-week high. Shares rose 0l.3% Thursday morning.
Microsoft stock tumbled 4.4% Wednesday on an analyst downgrade, closing at its lowest level since Nov. 9. The software giant is more than 30% off its 52-week high. MSFT stock moved 1.4% lower 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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