Dow Jones futures fell modestly Wednesday ahead of the minutes from the Federal Reserve’s latest policy meeting. Tesla stock raced higher after Citigroup upgraded the EV giant.
Before the Fed’s Minutes release at 2 p.m. ET, consumer sentiment, durable goods orders, first-time jobless claims, purchasing managers index readings and new home sales are all due out in the morning. The stock market will be closed Thursday for the Thanksgiving holiday, followed by a shortened trading session on Friday.
Initial jobless claims, out at 8:30 a.m. ET, jumped to 240,000 vs. 222,000 in the previous week. Meanwhile, durable goods climbed 1% in October, higher than the 0.4% Econoday estimate.
Autodesk shares plunged 10%, while HPQ stock rallied around 2% in early morning trade. Nordstrom shares tumbled 8.6%. And Deere stock jumped 4% in premarket trade.
Arista Networks is an IBD Leaderboard stock and was a recent IBD Stock Of The Day. Ulta Beauty was featured in this week’s Stocks Near A Buy Zone column. Shoals was Thursday’s IBD 50 Stocks To Watch pick.
Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Wednesday’s opening bell, Dow Jones futures turned lower, falling 0.15% vs. fair value, while S&P 500 futures moved down 0.1%. Tech-heavy Nasdaq 100 futures traded up 0.1% in morning action.
China-related stocks showed early strength, after news reports said the State Council had announced pending stimulus measures, including a cut to the reserve requirement ratio for China’s banks.
The 10-year Treasury yield ticked higher to 3.77% Wednesday morning.
Oil stocks were under some pressure as oil prices backtracked after a rebound on Tuesday. West Texas Intermediate futures dropped more 3%, to below $79 a barrel even after industry data showed U.S. crude stockpiles fell more sharply than expected last week. Official weekly oil inventory data is due out from the EIA at 10:30 a.m.ET.
Natural gas stocks received a boost as gas prices continued bolting higher. U.S. natural gas futures leapt nearly 7% after Russia warned after Russia accused Ukraine of stealing gas form a pipeline, and threatened to curtail deliveries on Russia’s last remaining supply line to Europe.
Stock Market Rally
On Tuesday, the stock market posted solid gains. The S&P 500 and Nasdaq composite each rallied 1.4%. The Dow Jones Industrial Average climbed 1.2%.
Tuesday’s The Big Picture commented, “While it’s fine putting money to work in the current stock market, keep your exposure on the conservative side with small positions to start. Just because the stock market is in a confirmed uptrend doesn’t mean you have to be 100% invested. And don’t be afraid to take a 10% gain if you have it, given the choppy nature of the market.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.
Dow Jones Stocks To Buy And Watch: Caterpillar
Dow Jones member Caterpillar is close to retaking its cup base’s 238 buy point, according to IBD MarketSmith pattern recognition, and is less than 1% below the entry. CAT gained 0.7% Wednesday, trading higher along with Deere. Shares are set to regain the entry at the market open if the early-morning strength persists.
Top Stocks To Buy And Watch: Arista, KLA, Shoals, Ulta
KLA is closing in on a cup-with-handle’s 392.60 buy point amid Tuesday’s 2.7% climb. Bullishly, the stock’s relative strength line hit a new high last week, a sign of big outperformance vs. the S&P 500. KLAC stock was inactive Wednesday.
Shoals Technologies is still out of buy range past a 28.57 buy point after a third straight decline Tuesday. The 5% buy zone tops out at 30. Wait for an orderly pullback into the buy range before considering a purchase of shares. SHLS stock was unchanged early Wednesday.
Ulta Beauty moved out of buy range Tuesday, rising nearly 2%. The 5% buy zone past a 426.99 buy point in a cup with handle runs up to 448.34. Ulta reports third-quarter results on Dec. 1. The stock traded flat Wednesday.
Tesla stock climbed 1.2% Tuesday, snapping a four-day losing streak that saw the stock hit its lowest level since Nov. 23, 2020. The stock reached a new 52-week low price Monday at 167.54. Tesla shares are around 57% off their 52-week high and sharply below their 50- and 200-day moving average lines.
Shares of the EV giant traded up 2.6% Wednesday morning after Citigroup upgraded the stock from sell to neutral, raising the price target from 141.33 to 176.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rebounded 1.5% Tuesday and are still holding above their recently recaptured 50-day line. The stock is about 20% off its 52-week high. The stock traded down 0.3% Wednesday, as Foxconn workers clashed with police officers. Foxconn is the biggest iPhone assembly plant in China.
Microsoft rose 1.2% Tuesday, adding to Monday’s gains. Shares continue to hold above the 50-day line. The software giant remains more than 30% off its 52-week high. Microsoft shares rose 0.2% 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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