Dow Jones Rallies 375 Points On Key Economic Data; Nike Surges On Earnings; Tesla New Low

The Dow Jones Industrial Average rallied more than 375 points Wednesday morning after consumer and housing data. FedEx (FDX) and Nike (NKE) stock rose sharply in morning trade after the companies delivered earnings results.


Economic data Wednesday morning includes consumer confidence and existing-home sales. December’s consumer confidence index will be closely watched after data last week showed a surprise pullback in consumer spending in November. The index came in above estimates at 108.3 in December vs. November’s 100.2 reading.

Meanwhile, November’s existing-home sales fell further, to an annualized rate of 4.09 million vs. October’s 4.43 million. On Tuesday, housing data came in mixed, with housing starts topping estimates and new permits missing consensus targets. Homebuilder stocks have shown recent signs of strength, with three names rising onto the IBD 50 list in the past week.

FedEx and Nike reported their quarterly earnings results after the close Tuesday. FedEx stock jumped 6%, while Nike shares surged as much as 15%. Nike’s strength helped boost Adidas (ADDYY) and Foot Locker (FL) shares. Adidas jumped nearly 7%, while Foot Locker rallied 3.6%.

Dow Jones energy giant Chevron (CVX) was a top performer on the Dow 30 as a drop in weekly supply data helped push oil prices higher. CVX shares rallied more than 1%. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded higher after today’s stock market open.

Electric-vehicle giant Tesla (TSLA) reversed more than 2% higher Wednesday morning, as Chief Executive Elon Musk pledged to exit his CEO post at social media site Twitter.

IBD Stock Leaderboard Neurocrine Biosciences (NBIX), KLA (KLAC), O’Reilly Auto Parts (ORLY) and United Rentals (URI) — as well as Dow Jones names Amgen (AMGN), Caterpillar (CAT) and Home Depot (HD) — are among the top stocks to consider for investor watchlists.

Neurocrine and United Rentals are IBD Leaderboard stocks. UnitedHealth was featured in last week’s Stocks Near A Buy Zone column. Caterpillar and United Rentals were recent IBD Stock Of The Day companies.

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Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average rallied 1%, while the S&P 500 moved up 0.7%. The tech-heavy Nasdaq composite followed up with a gain of 0.5% in morning action.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.4% and the SPDR S&P 500 ETF (SPY) moved up 0.55% early Wednesday.

The 10-year Treasury yield ticked lower to 3.64% Wednesday morning, pausing after a surprise move by the Bank of Japan upended global bond markets and sent the US yield surging to 3.68% on Tuesday.

Meanwhile, US oil prices traded up around 2% Wednesday, as industry data from the American Petroleum Institute showed US crude inventories fell by about 3.1 million barrels last week, which was more than expected. Official weekly data is due from the Energy Information Administration at 10:30 am ET. West Texas Intermediate futures rose to nearly $78 a barrel in morning trade.

Stock Market Rally Under Pressure

On Tuesday, The S&P 500 ended the trading day with a slender 0.1% gain. The benchmark index remains stuck below the 50-day moving average, although it remains within striking distance. The Nasdaq composite closed the session essentially flat. The tech-heavy index remains down almost 33% so far in 2022. It sits 3.5% below its 50-day line and is nearly 9% below its Dec. 13 peaks.

Tuesday’s The Big Picture column commented, “Investors should note that while indexes did bounce slightly, it was far from a decisive move. Given the market has drifted into oversold territory, a more powerful rally is desirable.”

Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Watch: Amgen, Caterpillar, Home Depot

Drugmaker Amgen is building a new flat base following a big advance into the middle of November. But shares are below their 50-day line after sharp losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. AMGN stock was down 0.1% Wednesday.

Dow Jones member Caterpillar continues to trade near a 239.95 buy point in a flat base, according to IBD MarketSmith pattern recognition, in the wake of Tuesday’s 1.2% rise. Shares found support at the stock’s 21-day exponential moving average in recent days and the stock’s relative strength line is edging to new highs. CAT stock rose 1.6% Wednesday.

CAT stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.

Home improvement retailer Home Depot is about 4% below a cup-with-handle base’s 329.77 buy point after reversing last week’s breakout move. HD stock traded up 1.3% Wednesday morning.

4 Top Growth Stocks To Watch In The Current Stock Market Rally

Top Stocks To Watch: KLA, Neurocrine, O’Reilly, United Rentals

Chip equipment leader KLA has been mostly holding up amid the market weakness, and is about 2% below a cup-with-handle’s 392.60 entry after Tuesday’s modest loss. KLA shares traded up 0.7% Wednesday.

IBD Leaderboard stock Neurocrine continues to find support at its 50-day level amid a two-day winning streak. A strong rebound would be bullish for the stock’s immediate prospects and would likely lead to the formation of a new base. Meanwhile, a sharp breach could mean the stock needs more consolidation. NBIX stock was up 0.4% Wednesday.

O’Reilly Auto Parts is also finding much-needed support at its 50-day line this week and remains squarely above a 750.98 flat-base entry. A big rebound off the 50-day line could bring a follow-on entry point, but the market uptrend is under pressure right now, which increases the risk of buying stocks. ORLY shares were up 0.4% Wednesday.

United Rentals remains squarely below a 368.04 buy point in a cup-with-handle pattern. Shares are about 5% below the buy point, and further weakness would trigger the 7%-8% loss rule. URI stock was up 1% Wednesday.

Stocks To Watch

These are five top stocks to watch in today’s stock market, including three Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Base
KLA (KLAC) 392.60 Cup with handle
United Rentals (URI) 368.04 Cup with handle
Caterpillar (CAT) 239.95 Flat base
Home Depot (HD) 329.77 Cup with handle
Amgen (AMGN) 296.77 Flat base
Source: IBD Data As Of Dec. 20, 2022

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla Stock

Tesla stock dived another 8.05% Tuesday, hitting another 52-week low and trading as low as 137.66. Shares rose more than 2% Wednesday morning, reversing higher after hitting a new 52-week low at 135.89.

On Tuesday, TSLA stock hit its lowest level since November 2020. Shares closed about 66% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares inched lower Tuesday, cutting losses after nearly hitting a new 52-week low, which was set on June 16 at 129.04. The stock is around 28% off its 52-week high. Shares traded up 1% Wednesday.

Microsoft rose 0.6% Tuesday, as shares held support around their 50-day line after snapping a three-day losing streak. The software giant remains about 30% off its 52-week high. MSFT stock moved up 0.2% early Wednesday.

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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