Dow Jones futures turned higher Wednesday morning after stronger-than-expected jobs data, and ahead of more testimony from Federal Reserve Chair Jerome Powell. Tesla (TSLA) stock dropped 1.3% on an investigation into detached steering wheels, threatening to extend a losing streak to three sessions. Warren Buffett-backed energy giant Occidental jumped on Berkshire Hathaway’s upped stake.
ADP’s National Employment Report showed private payrolls expanded by 242,000, higher than the expected 200,000 increase and up from January’s 106,000-employee growth. The ADP report is a precursor to Friday’s jobs report from the Labor Department.
Fed chief Powell’s congressional testimony is set to conclude Wednesday, with a session before the House Financial Services Committee at 10 a.m. ET.
On Tuesday, Powell struck a hawkish tone in speaking to the Senate banking committee Tuesday. He warned that the labor market remains “extremely tight,” and that the cooling trend in inflation caused by the Fed’s pervious rate hikes had reversed itself.
On the earnings front, CrowdStrike (CRWD) jumped 6.5% after the company reported quarterly profit and revenue that beat consensus estimates. Also, the cybersecurity firm’s revenue guidance came in well above Wall Street targets.
Stock Market Today
Warren Buffett-led Berkshire Hathaway (BRKB) disclosed a purchase of 5.8 million additional shares of energy giant Occidental Petroleum (OXY). OXY stock rallied 2.7% in early morning trade.
Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were up and down ahead of the stock market open.
IBD Leaderboard stock Alteryx (AYX), Palo Alto Networks (PANW), Arista Networks (ANET) and Salesforce (CRM) — as well as Dow Jones stocks American Express (AXP) and JPMorgan Chase (JPM) — are among the top stocks to buy and watch, amid a stock market rally trying to shrug off rate hike fears.
Palo Alto is an IBD Leaderboard watchlist stock. And Salesforce was featured in this week’s Stocks Near A Buy Zone column.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Wednesday’s market open, Dow Jones futures inched higher vs. fair value, and the S&P 500 futures were also barely higher. The tech-heavy Nasdaq 100 futures moved up 0.1% in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% and the SPDR S&P 500 ETF (SPY) inched up early Wednesday.
The 10-year U.S. Treasury yield inched lower despite Powell’s hawkish comments, settling at 3.97%. Then Wednesday, the 10-year yield ticked lower to 3.94% ahead of Powell’s second day of testimony.
Oil prices extended Tuesday’s losses, falling around 0.5% Wednesday morning. West Texas Intermediate futures traded around $77 a barrel, pulling back from recent highs.
Stock Market Rally
On Tuesday, the S&P 500 slid 1.5%, edging below its 50-day moving average. The Nasdaq composite fell nearly 1.3%. The Dow Jones Industrial Average lost 1.7% after meeting resistance at its 50-day line. All three indexes fell below their 21-day exponential moving averages.
Tuesday’s Big Picture column commented, “One advantage of the IBD 50 is that it sheds laggards and adds outperforming growth stocks. Thanks to its formulation, it is capable of capturing stock market leaders. At a time when market leadership is fragmented, the IBD 50 serves as good source of ideas. Airlines, software, consumer, industrial and financial stocks make up the current leadership mosaic.”
Now is an important time to read IBD’s The Big Picture column amid the now-struggling stock market rally.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: American Express, JPMorgan
American Express remains near a 182.25 buy point in a giant cup with handle despite Tuesday’s 2.1% decline. Bullishly, the stock’s relative strength line is holding near its highs, a particularly positive sign ahead of a potential breakout. AXP stock inched lower Wednesday morning.
Banking giant JPMorgan conceded its 138.76 flat-base buy point during the stock’s 2.9% slide Tuesday, according to IBD MarketSmith chart analysis. Shares gave up support at their 50-day line, which is a key level to watch. JPM shares traded slightly higher early Wednesday.
JPM stock shows a solid 93 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.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Palo Alto, Salesforce
Palo Alto Networks continues to trade quietly after the stock’s 12.5% surge on Feb. 22. Shares remain within striking distance of a base’s 193.01 buy point. PANW stock traded up 0.2% Wednesday morning.
Backstory: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.
Last week, Dow Jones leader Salesforce staged a bullish breakaway gap past a 178.94 buy point on strong fourth-quarter results. But gains are fading a bit amid the three-day losing streak, as shares lost 0.3% Tuesday. The stock is in the 5% buy zone that goes up to 187.89. CRM stock edged lower Wednesday.
Backstory: Salesforce sells software under a subscription model. Its software helps businesses organize and handle sales operations and customer relationships. The company has expanded into marketing, customer services and e-commerce. Salesforce said it has disbanded its “M&A committee,” implying it will make no more big acquisitions, amid growing pressure from activist investors.
Arista, Alteryx Above Latest Buy Points
Arista Networks is just above a 140.91 buy point from a cup base following a three-day win streak, with the stock up 0.2% Tuesday. The decisive retake places the stock in a buy range that goes up to 147.96. ANET stock moved up 0.6% Wednesday morning.
Backstory: Arista sells switches that speed up communications among racks of computer servers packed into data centers. According to analysts, Arista is gaining ground in the so-called “enterprise” market — large companies, government agencies and educational institutions. Earnings surged 72% in the most recent quarter.
IBD Leaderboard stock Alteryx gave up a trendline buy point 66.50 within a handle on an early-stage cup after Tuesday’s 2.2% drop. A conventional entry at 70.73 is also in play. Alteryx was inactive Wednesday.
Backstory: The Irvine, Calif., firm created a self-service platform for data analytics. Demand is clearly strong as sales have risen from the low $100 million level per quarter in 2021 to $216 million in the third quarter of 2022, up 75% vs. a year ago, and $301 million in Q4 2022, up 73%. This rapid revenue growth is one reason why Alteryx also posted a profit of 84 cents a share in Q4, likely the biggest quarterly earnings in company history.
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Stocks To Buy And Watch In Stock Market Rally
These are six top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|Arista Networks||(ANET)||140.91||Cup base|
|Alteryx||(AYX)||70.73||Cup with handle|
|American Express||(AXP)||182.25||Cup with handle|
|Palo Alto Networks||(PANW)||193.01||Consolidation|
|Salesforce||(CRM)||178.94||Cup with handle|
Source: IBD Data As Of March 7, 2023
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Tesla stock skidded another 3.15% Tuesday, dropping for a second-straight day. Despite their strong rebound since Jan. 6, shares are still below the 200-day line. That key level looms as a potential resistance area.
Shares closed Tuesday around 51% off their 52-week high. Aggressive investors can use the Feb. 16 high at 217.65 as a potential entry. However, to be safe, Tesla stock should clear the 200-day line, which is now below 221.
Tesla shares fell 1.3% Wednesday morning, threatening to add to Tuesday’s losses after Berenberg downgraded the stock from buy to hold, with a raised price target from 200 to 210. Tesla is also being investigated by U.S. auto safety regulators for steering wheels that can fall off, according to AP. The probe covers an estimated 120,000 Model Y SUV vehicles from the 2023 model year.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares lost 1.45% Tuesday, giving up a large part of Monday’s gains that saw them close at their highest level since Feb. 15. The stock rose 0.1% early Wednesday.
Microsoft shares snapped a three-day win streak Tuesday, with a 1.1% drop. The stock is still around 20% off its 52-week high after recent declines. MSFT stock moved down 0.25% Wednesday morning.
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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