Dow Jones futures were off 300 points Wednesday morning after a stronger-than-expected U.S. jobs report. The ADP payrolls report previews Friday’s jobs report from the Labor Department. Meanwhile, OPEC+ will meet to consider a controversial production cut.
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Ford Motor (F) rose 1.8% Wednesday morning after Morgan Stanley upgraded the stock from equal weight to overweight. Investment banks Goldman Sachs (GS) i Morgan Stanley ( MS ) fell 1.6% and 1.3%, respectively, as Atlantic Equities expects a decline in investment banking activity.
Head of electric vehicle Tesla ( TSLA ) was down 1.3% on Wednesday. Among the industrialists of the Dow Jones, the titans of technology apple (AAPL) and Microsoft (MSFT) were both much lower ahead of the stock market open today.
As the stock market turns into a recovery attempt, Murphy USA (MUSE), Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE), as well as Dow Jones stocks UnitedHealth (UNH) — are among the best stocks to watch. Despite Tuesday’s gains, the state of the market remains “in correction” and investors should remain on the defensive.
Vertex is a recent addition to the IBD Leaderboard. Murphy USA was featured in this week’s Stock Near A Buy Zone column, along with three other top stock ideas. World Wrestling was the stock of the day on Thursday. Neurocrine was a stock of the day on September 26.
Dow Jones today: Treasury yields, oil prices
Before the opening bell on Wednesday, Dow Jones futures fell 1.1% from fair value, while S&P 500 futures lost 1.15%. Nasdaq 100 futures fell 1.3%. 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 1.3% and the SPDR S&P 500 ETF ( SPY ) lost 1.1%.
The 10-year Treasury yield rallied to 3.7% on Wednesday morning, ending a two-day losing streak. Last week, the 10-year Treasury yield briefly topped 4%, which it hadn’t done in more than a decade. But this week it went down a lot.
Meanwhile, US oil prices gave up some of their recent gains, shedding 0.5% on Wednesday, with West Texas Intermediate futures hitting $86 a barrel. Last week, oil fell to its lowest level of the year before recovering. OPEC+ is expected to approve a major production cut on Wednesday when it meets in Vienna, Austria.
ADP Employment Report, Economic data
The September ADP jobs report came out at 8:15 am ET. ADP private payrolls rose 208,000, beating ADP estimates of a 200,000 increase, down from 308,000 in August.
Next, the IHS/Markit US Services Purchasing Managers’ Index (PMI) will be released at 9:45 AM. It is expected to improve to 49.2 from August’s reading of 43.7. Readings below 50 indicate contraction.
Finally, the Institute of Supply Management’s services index, due at 10 a.m., is expected to drop slightly to 56.0 from August’s reading of 56.9.
Attempt to recover the stock market
On Tuesday, the Nasdaq composite fared the best of the major indexes, rising 3.3% on the day. The S&P 500 advanced 3.1% and the Dow Jones Industrial Average rose 2.8%.
Tuesday’s The Big Picture warned: “Keep in mind that this is only the second day of the recovery attempt and the market remains in a correction. Investors should avoid getting too absorbed because no one can rule out another investment brutal”.
Monday’s gains started a new attempt at a recovery in the stock market, which is your Day 1. Day 2 and Day 3 action is irrelevant as long as the index doesn’t go below its last low, starting Friday . However, if this low is lowered, the recovery attempt is made and the market continues to look for a bottom.
Then on the 4th or later, investors should expect a follow-up day. Starting Thursday (the 4th), you’re looking for the Nasdaq or S&P 500 to rise sharply on higher volume than the previous session. A large enough increase in climbing volume marks a tracking day. This would give investors the green light to start buying leading stocks past the correct buy points.
Now, before a potential tracking day, is the perfect time to 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
Dow Jones UnitedHealth shares advanced 1.5% on Tuesday and are nearing a test of the key 50-day line. Shares are building a flat base that has a buy point at 553.23, according to IBD MarketSmith chart analysis. UNH shares were unchanged Wednesday morning.
UNH stock scores a solid 92 out of a perfect 99 on the 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 acts to watch: Murphy USA, Neurocrine, Vertex, WWE
Gas station and convenience store leader Murphy USA is building a flat base with a buy point of 303.19. The stock trimmed gains to just 0.1% on Tuesday, finding strong resistance at its 50-day line. A decisive recovery from this level would be optimistic for the stock’s base-building prospects. Stocks were flat Wednesday morning.
Neurocrine Biosciences is trying to break through the 109.36 buy points from a flat base, according to IBD MarketSmith chart analysis. Shares briefly topped Tuesday’s entry but closed just below the buy trigger after paring gains to 2.4%. The RS line hit a new high on Friday, a bullish signal. Shares were up 0.2% early Wednesday.
Vertex Pharmaceuticals decisively recovered its 50-day line last week. Shares are quickly approaching the 306.05 buy point of a flat base and are above an early entry at 296.24. While the weak state of the market may keep you on the sidelines, the stock’s resistance makes it an excellent idea. Its RS line is approaching new highs, a potential sign of strong stock performance. Shares of VRTX fell 0.6% in premarket trading on Wednesday.
World Wrestling Entertainment is just 1% off a 75.33 entry from a cup base after Tuesday’s 2.8% advance. The RS line continues to reach new highs. Shares of WWE rose 0.2% early Wednesday.
Join IBD’s experts as they analyze the top stocks in the stock market’s current bid for recovery on IBD Live
Tesla stock
Tesla shares rallied 2.9% on Tuesday after CEO Elon Musk offered to buy Twitter (TWTR) for $54.20 per share, according to a Bloomberg article. Tesla’s plunge on Monday saw it close at its lowest level since July 18. Shares were down 1.8% Wednesday morning.
In recent weeks, the stock’s relative strength line reached its highest level since April, but has fallen sharply in recent sessions. The stock is about 40% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 2.6% on Tuesday, adding to Monday’s strong gains. The stock is still 20% off its 52-week high and below its 50- and 200-day lines. Apple shares fell 1% Wednesday morning.
Microsoft rose 3.4% on Tuesday, continuing to recover from last week’s 52-week low. The software giant is still 30% off its 52-week high. Microsoft shares fell 0.9% 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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