Futures fall ahead of new inflation data
The Dow Jones Industrial Average sold off early on Thursday after another round of selloffs on Wednesday sent major stock indices to new corrective lows. More data on inflation – the Labor Department’s Producer Price Index – came out before the market opened. And Dow Jones media giant Disney tumbled after reporting a shortfall on Wednesday night.
dutch brothers (BROS) and Rivian (RIVN) also announced its results on Wednesday evening. BROS stock plummeted 37%. Rivian shares rebounded 11%, after plunging 28% for the week through Wednesday.
Electric vehicle giant You’re here (TSLA) slipped more than 5% on Thursday morning. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) traded down 2.2% and 1.5%, respectively, in today’s stock market.
As the stock market correction continues to worsen, Dow Jones leaders Chevron (CLC) and Merck (MRK) — with Energy Cheniere (LNG), Exxon Mobil (XOM) and Northrop Grumman (NOC) – are among the top IBD stocks to watch on Thursday.
Cheniere Energy and Microsoft are IBD ranking stocks. Exxon and Merck were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Inflation Data
After Thursday’s open, the Dow Jones Industrial Average fell 1% and the S&P 500 lost 1.2%. The tech-heavy Nasdaq composite sold 1.7% in morning trading.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.7%. The SPDR S&P 500 ETF (SPY) lost 1.2%.
The 10-year Treasury yield fell to 2.82% on Thursday morning as bonds continued to rebound from the stock market pullback. On Wednesday, the 10-year Treasury yield fell for a third straight day, closing at 2.92%. Meanwhile, U.S. oil prices fell more than 1%, with Texas Intermediate crude hovering around $104 a barrel after rebounding 6% on Wednesday.
CPI inflation rate is finally falling but not enough
Producer prices rose 0.5% in April, compared to a 1.4% rise in March, according to Econoday estimates. Producer inflation rose 11% in April from a year ago, warmer than the 10.7% estimate. The Producer Price Index is a measure of price strength based on the selling prices received by domestic producers for their production.
On Wednesday, April’s consumer price index rose at an annual rate of 8.3%, down from 8.5% the previous month, but higher than expected by economists.
Finally, initial jobless claims rose to 203,000. Initial jobless claims are expected to fall to 190,000 from 200,000 the previous week.
The stock market correction deepens
On Wednesday, major equity indices sold off sharply, reaching new corrective lows. The Nasdaq composite plunged 3.2%, dragging the stock market lower.
Wednesday’s The Big Picture column commented: “The indices started strong and managed to hold in the green for much of the day. But the temporary respite was used as a tactical selling opportunity, causing a reversal painful at the end.”
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Dow Jones Earnings: Disney
Within the Dow Jones Industrials, Disney reported earnings and sales below analysts’ expectations for its second fiscal quarter. But subscriber growth for the Disney+ streaming service has far exceeded expectations.
Disney stock fell more than 4% early Thursday. DIS shares ended Wednesday more than 40% off their 52-week high.
Five Dow Jones stocks to watch now
Dow Jones stocks to watch: Chevron, Merck
The Dow Jones leader and energy giant Chevron in a flat basis that has a buy point of 174.86, according to IBD MarketSmith’s chart analysis. Shares of CVX traded up 1.5% on Wednesday as they battle to regain their 50-day line. Chevron shares were down 0.7% on Thursday morning.
CVX stock boasts a perfect composite rating of 99 IBD, per IBD stock check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.
Drug leader Merck is just under a cup with the handle’s 89.58 buy point after Wednesday’s 1.6% lead. Shares rose early Thursday. On the positive side, the stock’s relative strength line has reached a new high, indicating strong stock market outperformance during the current correction.
Three growth stocks to watch in the currentrent Stock market correction
Stocks to watch: Cheniere, Exxon, Northrop
IBD Leaderboard Cheniere Energy stock is one of the top stocks to watch, although it continues to trade below its 50-day line. Shares rose 1% on Wednesday as they continue to etch a flat base that shows a buy point of 149.52, according to IBD MarketSmith’s chart analysis. LNG shares fell slightly on Thursday.
Energy giant Exxon Mobil topped a cup with the 89.90 buy point of the handle last week. But stocks gave up entry on Monday and remain around 3% below the buy point. This stops before triggering the auto-sell rule. The shaky breakout illustrates the danger of owning stocks in the current market environment. XOM shares fell 0.5% on Thursday.
Defense contractor Northrop Grumman continues to burn a handle cup with a buy point of 477.36. Stocks are just below their 50-day line after Wednesday’s 0.8% loss. Northrop shares rose 0.6% on Thursday.
Join IBD experts as they analyze the top stocks of the current market correction on IBD Live
Tesla stock was down more than 5% on Thursday morning, threatening to add to Wednesday’s 8.25% slide. Stocks remain well below their 50- and 200-day lines amid their recent weakness and are at their lowest level since February.
The stock traded as high as 1,243.49 on November 4 and is around 36% of that mark.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares slid 5.2% on Wednesday, falling to their lowest level since October 2021. The stock is well below its 200-day line and about 20% off its high. of 52 weeks. Apple stock fell 2.2% on Thursday.
Software leader Microsoft fell 3.3% on Wednesday, its lowest level since June 2021. The stock closed about 25% off its 52-week high. MSFT shares were down 1.5% on Thursday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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