Dow Jones Reverses Lower Amid Economic Data; Tesla Dives On Q4 Deliveries Miss

The Dow Jones Industrial Average reversed lower Tuesday amid the release of economic data. The dollar jumped, and China stocks posted broad early gains on hints of a peak in Covid cases. And Tesla stock skidded more than 7% after the electric-vehicle giant reported record deliveries in the fourth quarter, missing lowered forecasts despite aggressive year-end incentives.


Economic data out Tuesday includes the Purchasing Managers’ Manufacturing Index, or PMI, and construction spending. December’s PMI came in 46.2, unchanged from the mid-month estimate. Meanwhile, construction spending is expected to fall 0.4% in November. Markets — bonds and the dollar in particular — will be tuned to Wednesday afternoon’s release of Federal Reserve minutes.

On the earnings front, companies reporting this week include Bed Bath & Beyond (BBBY), Conagra (CAG), Constellation Brands (STZ) and Dow Jones stock Walgreens Boots Alliance (WBA).

Electric-vehicle leader Tesla (TSLA) fell 7.5% Tuesday. Chinese EV companies Li Auto (LI), Nio (NIO), BYD (BYDDF) reported record December sales, while XPeng (XPEV) deliveries rebounded. Li Auto shares rallied 5%, while Nio moved up 4%. BYD was up 4.1% as XPEV rose 7%.

Cardinal Health (CAH), Deere (DE), Medpace (MEDP) and IBD Leaderboard stock Tenaris (TS) — as well as Dow Jones names Amgen (AMGN), Caterpillar (CAT) and Chevron (CVX) — are among the top stocks to consider for investor watchlists. Keep in mind the ongoing market weakness should keep investors on the sidelines.

Tenaris is an IBD Leaderboard stock. Caterpillar and Medpace were recent IBD Stock Of The Day companies. And Cardinal Health was featured in last week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Tuesday’s opening bell, the Dow Jones Industrial Average moved down 0.1%, and the S&P 500 rose 0.3%. The tech-heavy Nasdaq composite advanced 0.5% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.5% and the SPDR S&P 500 ETF (SPY) moved up 0.3% early Tuesday.

The 10-year Treasury yield dropped to 3.74% Tuesday morning, threatening to retreat after two weeks of solid gains.

Meanwhile, oil prices reversed lower after an early rally. West Texas Intermediate futures dropped more than 1%, holding above $79 a barrel, after punching above their 50-day moving average for the first time since mid-November. WTI bottomed near $70 on Dec. 9.

Stock Market Correction

On Friday, the Dow Jones Industrial Average pared losses to 0.2%, while the S&P 500 lost 0.25%. The tech-heavy Nasdaq composite slashed losses to just 0.1% on the last trading day of 2022. The Nasdaq declined 33% for the year, its worst annual performance since 2008. The Dow Jones industrials and S&P 500 posted 2022 losses of 8.8% and 19.4%, respectively.

Friday’s The Big Picture column commented, “Earlier this week, IBD lowered its outlook to ‘market in correction’ after a string of distribution days, signaling skepticism about price action in the first quarter of 2023. We recommend that investors stay on the sidelines, only taking advantage of the most-perfect technical plays. It’s also wise to keep notes on January price action to see what’s working and what’s not in the new year.”

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Amgen, Caterpillar, Chevron

Drugmaker Amgen continues to trace a flat base amid a four-week losing streak. Shares remain sharply below their 50-day line. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. Amgen traded down 1.2% Tuesday.

Dow Jones member Caterpillar finished back below a 239.95 buy point in a flat base Friday, according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. Bullishly, the stock’s relative strength line, a key technical indicator, is just off new highs. CAT stock was one of the top-performing Dow Jones stocks in 2022, with a 15.9% rally. Shares fell 0.4% Tuesday.

CAT stock shows a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Energy giant Chevron is trying to again clear its 50-day line following a two-day win streak, as the stock continues to trace the right side of a cup base that has a 189.78 buy point. CVX stock was the Dow’s 2022 leader, up nearly 53%. Shares dipped 1.1% Tuesday morning, falling in line with oil prices.

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

Top Stocks To Watch: Cardinal Health, Deere, Medpace, Tenaris

Cardinal Health, a recent IBD Stock Of The Day, is holding close to a 81.67 buy point in a flat base. Shares declined 1.1% Friday, falling below their 50-day line. CAH stock was down 0.8% Tuesday.

Friday’s IBD Stock Of The Day, Deere, is building a flat base with a 448.50 buy point. DE stock traded down 0.6% Tuesday morning.

Medpace continues to hold above its 50-day line, despite falling 1.5% Friday. For now, the correct buy point stays at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock inched lower Tuesday.

IBD Leaderboard stock Tenaris is trying to break out past a 35.15 flat-base entry. Shares fell 0.4% Friday, but stayed above the entry. The RS line hit a new high last week. TS stock fell 1% Tuesday morning. Keep in mind the weak stock market outlook means investors should avoid new stock buys.

Stocks To Watch In Ongoing Stock Market Correction

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

Company Name Symbol Correct Buy Point Type Of Base
Cardinal Health (CAH) 81.67 Flat base
Tenaris (TS) 35.15 Flat base
Deere (DE) 448.50 Flat base
Caterpillar (CAT) 239.95 Flat base
Chevron (CVX) 189.78 Cup base
Amgen (AMGN) 296.77 Flat base
Source: IBD Data As Of Jan. 3, 2023

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Tesla Stock

Tesla stock extended its rebound Friday, rallying 1.1%. TSLA stock finished 2022 with its worst annual performance on record, crumbling 65%.

Last week, shares hit a 52-week low week at 108.76. And they closed about 69% off their 52-week high. Shares threatened to snap the three-day win streak, skidding more than 7% in morning trade Tuesday.

Over the long weekend, Tesla deliveries hit a record 405,278 in the fourth quarter, but missed lowered forecasts despite aggressive year-end incentives. Tesla deliveries jumped 31% vs. a year earlier and nearly 18% vs. the third-quarter figure of 343,830. Deliveries swelled 40% to 1,313,851 in 2022, but well below the 50% goal.

Analysts had expected fourth-quarter Tesla deliveries of roughly 420,000, which were whittled down significantly in the past few weeks.. Tesla’s third-quarter deliveries also had fallen short.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.25%, as they continue to trade just above their lowest level since June 2021. The stock is around 30% off its 52-week high. Shares fell 0.3% Tuesday morning.

Microsoft stock fell 0.5% Friday, and is still below the 50-day line. The software giant is about 30% off its 52-week high. MSFT stock moved up 1.1% early Tuesday.

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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