The Dow Jones Industrial Average reversed higher on Thursday morning after jobless claims unexpectedly fell for the first time, retail sales rose and factory indicators fell. Meanwhile, the 10-year Treasury yield remains on course to hit June’s 11-year high.
Initial jobless claims from the Labor Department fell to 213,000. They were expected to rise to 228,000 from 222,000 the previous week. And U.S. retail sales rose 0.3% in August from July, easily beating Econoday estimates that expected total sales to remain flat. But the Philadelphia Fed’s manufacturing index posted -9.9, well below the 3.1 expected.
Elsewhere, a tentative deal has been reached to avert a strike by railroad workers as early as Friday, the Biden administration said. This news sent rail stocks such as CSX (CSX) and Union Pacific (UNP) after they sank on Wednesday.
Adobe (ADBE) reported better-than-expected quarterly results, but slightly lower revenue as the company released pre-open earnings instead of its usual post-close report. The reason is that the software giant has confirmed that it is buying online design collaboration company Figma for $20 billion. ADBE shares plunged 13%.
In the current market volatility, Arista Networks (sides), DoubleVerify (DV), Palo Alto Networks (PANW) and Pure storage (PSTG) — as well as the Dow Jones stock Chevron (CLC) – are among the best stocks to buy and watch. Keep in mind that increased market volatility is a good reason for investors to be more defensive, especially after Tuesday’s market drop.
DoubleVerify is a IBD classification Stock. Chevron and Palo Alto were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices
After Thursday’s opening bell, the Dow Jones Industrial Average reversed from early losses to rise 0.45%, while the S&P 500 rose 0.3%. The tech-heavy Nasdaq composite gained 0.3% in morning action.
The 10-year Treasury yield rose to 3.45% on Thursday morning. On Tuesday, the 10-year Treasury yield hit its highest closing level since June 14 and is just below the 11-year high of 3.48% set on June 14.
U.S. oil prices fell more than 1% early Thursday, with West Texas Intermediate futures trading around $87 a barrel. Natural gas futures fell 6% as the railroad strike was averted, meaning coal shipments will not be disrupted. Natgas futures climbed 9% on Wednesday.
Stock market rally under pressure
On Wednesday, the Nasdaq Composite led the way, up 0.7%. The S&P 500 gained 0.3%, while the Dow Jones Industrial Average rose just 0.1%.
Wednesday’s The Big Picture column commented, “Energy continues to rank #1 in IBD Stock Research Charts in terms of medium and long-term performance. The sector rose 4% on Tuesday on a price-weighted basis. Affirming bullish action: Energy Select Sector SPDR (XLE) rose 2.8% amid crude oil futures’ fourth gain in five sessions to $88.98 a barrel. VanEck Oil Services (OHI) outperformed by 3.6%.
The best way to find leadership in emerging stock markets is to use the relative force line. The RS line measures a stock’s price performance relative to the S&P 500. If the stock is outperforming the broader market, the RS line slopes up. If a stock is lagging the general market, the line will point down.
The RS line is drawn on all IBD and MarketSmith charts. Moreover, the IBD Action Tracker includes a list of top rated stocks with relative strength lines to new highs. MarketSmith also has the “RS Blue Line Dot” listing, which filters RS lines to new highs. (IBD MarketSmith offers free access for a full week.)
If you’re new to IBD, consider taking a look at its stock trading system and The basics of CAN SLIM. Recognize chart templates is one of the key investment guidelines. IBD offers a wide range of growth stock listssuch as Ranking and Swing Trader.
Dow Jones Stocks to Watch: Chevron
Dow Jones Chevron stock rose 2.4%, once again closing in on a cup with the last handle buy point at 166.93 – according to IBD MarketSmith chart analysis – amid strong performance by energy stocks so far this year. The stock was down 1.45% early Thursday.
CLC action shows a solid 97 over a perfect 99 IBD Composite Assessment, speak IBD inventory check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.
Top stocks to watch: Arista, DoubleVerify, Palo Alto Networks, Pure Storage
Arista Networks added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith graphical analysis. An early entry at 126.80 is also in play. Arista’s relative strength line is near the highs. ANET shares were slightly lower on Thursday morning.
IBD Ranking Stock DoubleVerify is holding above a buy point of 28.07 in a bottom base. The shares are in the 5% buy zone which rises to 29.47. DV shares were down 2% on Thursday morning.
Cybersecurity leader Palo Alto Networks is approaching a buy point of 193.01 in a cup with handle despite falling 0.5% on Wednesday. An early entry around 187 exists due to a trendline, according to IBD classification comment. Shares lost nearly 1% on Thursday.
Pure Storage is approaching a buy point of 31.62 in a mug with handle. Meanwhile, an early entry is also in play after the stock broke above a downtrend line in this handle. Shares fell more than 1% on Thursday.
Tesla Stock rebounded 3.6%, rebounding from Wednesday’s 4% slip. Stocks reclaimed their 200-day line, which they had just abandoned. The electric vehicle giant gained 1% on Thursday morning.
The shares are down about 27% from their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares rose 1% on Wednesday, recovering a small portion of Tuesday’s 5.9% drop. They remain below their 50-day and 200-day lines. The stock is around 14% off a buy point at 176.25 on a mug with handle. Apple stock fell 0.3% on Thursday.
Microsoft edged higher on Wednesday, failing to recover much of Tuesday’s 5.5% decline. The software giant remains well below its 50 and 200 day lines. Shares are around 28% off their 52-week high. Microsoft shares fell 1.2% 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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