Dow Jones futures reversed early losses on Wednesday, looking to avoid a seventh straight decline. Fed Chairman Jerome Powell will speak at the 2022 Community Banking Research Conference in St. Louis at 10:15 a.m. ET. Meanwhile, the 10-year Treasury yield briefly topped 4% for the first time in more than a decade.
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ribbons (CTAS), Paychex (PAYX) and Thor Industries (THO) were the top earnings reporters on Wednesday morning. Cintas rose modestly after better-than-expected results, while Paychex was also slightly higher. Thor Industries rose 3% after beating earnings and sales estimates.
netflix ( NFLX ) rose more than 1% after Atlantic Equities upgraded the stock to overweight. The stock is about 70% off its 52-week high. Head of electric vehicle Tesla ( TSLA ) traded 0.5% lower on Wednesday. Tech titan apple ( AAPL ) sold off more than 2% on reports of weak iPhone demand, while Microsoft (MSFT) was also lower ahead of the stock market open today.
In the current weakness of the stock market, DoubleVerify (DV), hostess Brands (TWNK), Neurocrine Biosciences (NBIX), rotate (TTC), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE), as well as Dow Jones stocks UnitedHealth (UNH) — are among the best stocks to watch. Note that the deepening of the stock market correction is a time for investors to sit on the sidelines and make watch lists.
DoubleVerify is an IBD ranked stock exchange. Hostess and Toro were featured in this week’s Stock Near A Buy Zone column. Neurocrine Biosciences was the stock of the day on Monday. Vertex was the stock of the day on September 12.
Dow Jones today: Treasury yields, oil prices
Ahead of the opening bell on Wednesday, Dow Jones futures were up 0.4% from fair value, while S&P 500 futures gained 0.3%. Nasdaq 100 futures edged lower, with Apple trading at the bottom of the list.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next normal stock market session.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 0.1% and the SPDR S&P 500 ETF ( SPY ) rose 0.3%.
The 10-year Treasury yield briefly topped 4% on Wednesday morning, setting a fresh 12-year high, before reversing the decline to 3.87%. The 10-year Treasury yield is headed for its ninth straight weekly advance, marking its longest rally since 2004. Meanwhile, US oil prices reversed early losses. West Texas Intermediate futures rebounded to near $80 a barrel, after falling to their lowest level of the year on Monday.
Stock market correction
The stock market continued to show weakness on Tuesday, as the Nasdaq composite saw the index pare an early 2.2% gain to a 0.2% gain at the close. Meanwhile, the Dow Jones Industrial Average and the S&P 500 hit new bear market lows.
Tuesday’s The Big Picture column commented, “While the major stock indexes are showing a sign of strength with a tracking day in the coming days, it won’t be a sign of aggressive re-entry into the market. Why? Because growth screens still don’t give much performance to the outlook. Stocks that buck the trend and show strength when the market is down are tempting to buy. But a weak market kills everything. Avoid the temptation to buy stocks by holding good. It’s an easy way to cut yourself, even if you have small losses.”
The Nasdaq’s attempted three-day rally should have investors on the lookout for a possible follow-through day, which is when either the Nasdaq or the S&P 500 rises sharply on higher volume than the previous session on the 4th and after a recovery attempt. It gives investors the green light to start buying major stocks by beating the correct buy points. You should synchronize your portfolio and mindset with the action of the stock market, gradually committing capital to the leading stocks.
However, it is important for investors to make good use of this downtime. Now is an ideal opportunity to study market funds and build a solid watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market bottom signal. Missing this early opportunity can be a costly mistake.
Five Dow Jones Stocks to Watch Now
Dow Jones stocks to watch: UnitedHealth
Shares of Dow Jones UnitedHealth remain above their long-term 200-day line. Shares are building a flat base that has a buy point at 553.23, according to IBD MarketSmith chart analysis. Resilience in stocks made Tuesday’s IBD 50 the pick of stocks to watch. Shares were down 0.7% Wednesday morning.
UNH stock scores a strong 95 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Review. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics.
4 most important growth actions to watch in the Current Stock market correction
Top stocks to watch: DoubleVerify, Hostess, Neurocrine, Toro, Vertex, WWE
IBD Leaderboard DoubleVerify shares remain below their 28.07 buy point on a fund basis despite Tuesday’s 3.5% rise. According to the leaderboard comments, DoubleVerify found support near its 50-day line. Shares edged lower on Wednesday.
Twinkie maker Hostess Brands is in a 5% buy area above a 23.23 buy point on a handle mug, according to IBD MarketSmith chart analysis. Optimistically, the Hostess relative strength line is reaching new highs. Note that the weak trend in the market should keep you on the sidelines, but it is one of the best stocks to watch. The stock was inactive on Wednesday.
Wednesday’s IBD 50 Stocks To Watch pick, Neurocrine Biosciences, is still building a flat base that has a 109.36 buy point. Shares remain below their 50-day line on Wednesday despite rising 0.8%. Despite the stock’s recent weakness, the RS line hit a new high last week, so the stock has avoided much of the market’s decline. Shares were unchanged on Wednesday. Neurocrine was also Monday’s IBD Stock of the Day.
Toro shares are in a flat base and about 6% away from a 92.05 buy point. The stock is trading just below its 50-day line after Tuesday’s 0.7% drop. The RS line is at new highs. Toro shares traded flat on Wednesday.
Vertex Pharmaceuticals is trying to regain its 50-day line after Tuesday’s 2.9% loss. It is forming a flat base with a buy point of 306.05. The resilience of the stock makes it an excellent idea to watch. Shares were unchanged on Wednesday.
World Wrestling Entertainment continues to build a flat base that has a 75.33 entry. The stock tried to retrace its 50-day line on Tuesday, but was rebuffed. A decisive recovery from this key level would be bullish for the stock’s base-building prospects. Shares of WWE were flat early Wednesday.
Join IBD experts as they analyze the top stocks in the current stock market correction on IBD Live
Tesla stock
Tesla shares rallied 2.5% on Tuesday, rising for the second day in a row. Still, the stock is well below its 50-day line after last week’s big losses. Tesla shares pared early losses to less than 1% early Wednesday.
Last week, the stock’s relative strength line hit its highest level since April, but has fallen sharply in recent sessions. Shares are about 32% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares rose 0.7% on Tuesday but are still near recent lows. On the upside, its RS line hit another new high on Tuesday. Apple shares fell more than 2% Wednesday morning on reports that Apple is pulling back from plans to increase production of its new iPhones due to a lack of demand.
Microsoft lost 0.4% on Tuesday, hitting another 52-week low. The software giant is more than 32% off its 52-week high. Microsoft shares lost 0.3% early Wednesday.
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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