The Dow Jones Industrial Average rose 85 points early Wednesday, while tech stocks sold off after December jobs data and ahead of minutes from the Federal Reserve’s December policy meeting. Tesla stock reversed higher, while other electric-vehicle leaders were sharply lower after Wednesday’s stock market open.
Among the Dow Jones leaders, Apple (AAPL) fell 0.2% Wednesday, while Microsoft (MSFT) moved down nearly 2% in today’s stock market. Also among the Dow 30, Home Depot (HD) remains in a buy zone, while Nike (NKE) fell further below a key level on Wednesday.
Tesla stock reversed 0.2% higher Wednesday. Tesla rival Rivian (RIVN), was down 3%. Lucid Group (LCID) dropped nearly 2%. And Chinese EV leaders Li Auto (LI), Nio (NIO) and Xpeng Motors (XPEV) were mixed Wednesday morning.
Microsoft and Tesla are IBD Leaderboard stocks. Commercial Metals was Tuesday’s IBD 50 Stocks To Watch pick. Tesla was featured in this week’s Stocks Near A Buy Zone column, while Applied Materials is an IBD SwingTrader stock.
Dow Jones Today: Fed Minutes, Treasury Yields
After the stock market open Wednesday, the Dow Jones Industrial Average turned 0.2% higher, while the S&P 500 moved down 0.1%. The tech-heavy Nasdaq composite lost 0.75% in morning trade.
Payroll manager ADP released its National Employment Report at 8:15 a.m. ET. The report offers a preliminary view into December hiring, ahead of the Labor Department’s payrolls report, set for release on Friday. Private jobs growth totaled 807,000 for December, well above Econoday’s estimate for payroll growth of 414,000.
Minutes from the Fed’s December meeting are due out at 2 p.m. ET. Fed officials said in that meeting that the Federal Reserve will halt crisis-driven asset purchases in early 2022, setting the stage for three interest-rate hikes this year to help counter the threat of persistently high inflation.
Elsewhere, the 10-year Treasury yield ticked down near 1.65% Wednesday morning. On Tuesday, the 10-year Treasury yield finished just below 1.67%, its highest close since Oct. 21.
Stock Market Rally
The stock market posted sharply mixed action Tuesday, as the tech-heavy Nasdaq sold off. The S&P 500 reversed lower after setting new highs, while the Dow Jones Industrial Average hit a new high with solid gains.
The market outlook remains in a “confirmed uptrend,” so investors have the green light to buy top-rated growth stocks breaking out past correct buy points.
Tuesday’s The Big Picture commented: “The S&P 500 and Dow Jones Industrial Average started the day with record highs. The Nasdaq composite opened mildly higher. But within minutes, the Nasdaq reversed lower and sank as much as 2%. In an afternoon bounce, it shaved its loss to 1.3% and closed just above the 50-day moving average. The S&P 500 also reversed lower but limited its loss.”
For daily stock market commentary, check out IBD’s The Big Picture.
Stocks On The Move: Adobe, Salesforce
Adobe (ADBE) shares slid more than 3% Wednesday morning after UBS downgraded the stock from buy to neutral, and lowered the price target from 635 to 575. ADBE stock is near its recent lows, more than 20% off its 52-week high.
Meanwhile, UBS also downgraded Dow Jones software leader Salesforce.com (CRM) from buy to neutral. CRM stock dropped around 6% Wednesday, threatening to fall further below its long-term 200-day line.
Elsewhere, energy leaders Marathon Petroleum (MPC) and Marathon Oil (MRO) broke out Wednesday morning. MPC shares rallied 2.55%, hitting a 68.88 buy point in a flat base. Marathon Oil opened above a 17.69 buy point in a cup base, rallying 1.5% in morning trade.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock rose 1% Tuesday, recovering a large part of Monday’s 1.5% skid. Shares are in a buy zone. HD shares were down 1.2% Wednesday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares snapped a three-day losing streak Tuesday, rising 1.05%. But the stock remains below its key 50-day line. Nike shares fell 0.6% Wednesday.
Stocks To Buy And Watch: Applied, Commercial Metals, Huntsman, Goldman, Wells
IBD SwingTrader stock Applied Materials again gave up a 159.10 buy point in a flat base during Tuesday’s 1% loss, according to IBD MarketSmith chart analysis. The 5% buy area runs up to 167.06. AMAT shares were slightly higher Wednesday.
Tuesday’s IBD 50 Stock To Watch, Commercial Metals, broke out past a cup base’s 36.96 buy point during the Tuesday session’s 3.5% advance. The 5% buy area tops out at 38.81. Keep in mind the company’s earnings results are next week, so this breakout carries extra risk. Shares were up 2% Wednesday.
Huntsman is at the top of its buy range past a 34.57 flat-base entry following Tuesday’s 1.9% gain. The 5% buy range goes up to 36.30. HUN stock shows a 92 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Huntsman stock was up 1% Wednesday.
Dow Jones member Goldman Sachs advanced 3.1% Tuesday, adding to Monday’s sharp advance. Shares are tracing a cup base with a 426.26 buy point. Be on the lookout for a potential handle to offer a more risk-optimal entry. GS stock was up 0.3% Wednesday.
Wells Fargo jumped another 4% Tuesday, breaking out past a flat base’s 52.67 buy point and ending in a buy range. Shares lost 0.3% early Wednesday.
EV Stocks: Li Auto, Nio, Xpeng, Lucid Motors, Rivian
Li Auto stock continues to work on a new base, but gave up its 50-day line amid Tuesday’s 6.2% decline. The stock declined 0.9% early Wednesday.
Nio stock skidded 5.65% Tuesday, closing more than 50% off its 52-week high. Shares remain sharply below their 50- and 200-day moving averages. Shares fell 0.3% Wednesday.
Xpeng Motors slid 5.3% Tuesday, ending just above the key 50-day line. There is no valid buy point yet, as shares continue to form the right side of a new base. The stock skidded around 1% Wednesday.
Among U.S.-based EV stocks, Lucid Motors shares dropped 5% Wednesday, threatening to extend Tuesday’s 3.7% fall. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are setting up for another try to retake the 50-day line, which would be a positive for the stock’s consolidation.
Recent initial public offering Rivian was down 3.5% Wednesday, threatening to extend a losing streak to three sessions. RIVN shares closed Tuesday about 44% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent losses are a significant setback in the stock’s basing process and there is no new buy point in sight.
Tesla stock reversed 0.2% higher Wednesday, but still threatened to add to Tuesday’s 4.2% sell-off as that gain faded. On Monday, Tesla shares broke out past a 1,119.10 buy point, which is a result of a daily-chart trendline and/or a weekly-chart handle. The stock remains in that buy zone, which extends to 1,175,06. Meanwhile, the stock Tuesday briefly topped a double-bottom buy point at 1,202.05 before closing below it.
Shares traded as high as 1,243.49 on Nov. 4, and the stock ended Tuesday about 8% off that 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock ended Tuesday down 1.3% and remains just shy of hitting the 20%-25% profit-taking level past a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Apple shares reversed from record highs Tuesday. Shares lost 0.2% Wednesday.
Software leader Microsoft failed to hold above support around its 50-day moving average during Tuesday’s 1.7% loss. The top Dow Jones stock continues to etch a flat base with a 349.77 buy point. Shares lost 1.8% 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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