Dow Jones futures drifted higher Wednesday morning, as they looked to snap a three-day losing streak. Tesla stock will officially split Wednesday when shares outstanding increase to four billion, but trading at the new 3:1 split-adjusted price will begin Thursday.
Advance Auto Parts (AAP), Dycom (DY), Intuit (INTU), Nordstrom (JWN), Toll Brothers (TOL) and Urban Outfitters (URBN) are key earnings movers Wednesday.
AAP shares skidded 6.5%. Dycom rose about 1%. Intuit jumped 6%, while Nordstrom dived 13%. Toll Brothers declined 2% after topping earnings views, but downgrading full-year guidance on deliveries. And Urban Outfitters dropped more than 2% in early trade.
Electric-vehicle leader Tesla (TSLA) traded up around 1% Wednesday. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were mixed ahead of today’s stock market open.
In the current stock market pullback, Albemarle (ALB), Arista Networks (ANET), Axcelis Technologies (ACLS) and Costco (COST) — as well as Dow Jones stocks Amgen (AMGN) and McDonald’s (MCD) — are among the top stocks to buy and watch.
Costco stock was added to the IBD Leaderboard in the wake of last week’s breakout move. Arista and Axcelis were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Powell Speech
Early Wednesday, Dow Jones futures rose less than 0.1% vs. fair value, while S&P 500 futures moved up 0.2%. Nasdaq 100 futures climbed 0.2% in morning trade. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved up 0.25%, and the SPDR S&P 500 ETF (SPY) was up 0.2% in early trade.
The 10-year Treasury yield hovered around 3.05% early Wednesday, following Tuesday’s rise. This week, the 10-year Treasury yield is above the 3% level for the first time since July 21.
U.S. oil prices continued to rebound Wednesday after last week’s losses saw West Texas Intermediate futures reach their lowest level since January. WTI futures rose 1% early Wednesday, trading above $94 a barrel.
Federal Reserve board members will be closely watching July durable goods, which came out from the Commerce Department at 8:30 a.m. ET. New orders were flat in July vs. the previous month, with a 0.3% increase minus transportation orders. Economists projected a sharp slow down from June — a 0.5% gain for overall orders, and a 0.1% increase minus transportation orders. Overall orders rose 2% in June.
Fed chief Jerome Powell will give a speech Friday on the central bank’s economic outlook from Jackson Hole, Wyo. The Fed has raised interest rates this year in an attempt to bring down inflation but has sent increasingly mixed signals about coming increases.
Last week’s Fed minutes seemed to push back against market expectations for a dovish pivot, after a six-week stock market rally followed the June 14-15 meeting. Markets place a roughly 58% chance of a 75-basis-point rate hike on Sept 21. One week ago, there was a 39% chance.
Stock Market Pullback
On Tuesday, the stock market posted another disappointing performance as early gains faded into the close. The Dow Jones industrial lagged, falling 0.5%, while the S&P 500 lost 0.2%.
Tuesday’s The Big Picture column commented, “Overhead supply seems to be an issue as both the Nasdaq and the S&P 500 have fallen away after approaching or touching their downward-sloping 200-day moving averages. Indeed both are now struggling to hold onto their 21-day lines.”
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Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Amgen, McDonald’s
Dow Jones stock Amgen is building a flat base that has a 258.55 buy point, amid a strong performance by biotechs so far this year. An early entry at 253.87 is also in play. Shares gave up their 50-day support level during Tuesday’s 1%1.6% decline. The stock traded flat early Wednesday.
AMGN stock shows a solid 92 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
McDonald’s shares are trading further below a 265.56 cup-with-handle entry following Tuesday’s 0.9% loss, according to IBD MarketSmith chart analysis. MCD shares were unchanged Wednesday morning.
4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally
Top Stocks To Watch: Albemarle, Arista, Axcelis, Costco
Lithium producer Albemarle is squarely in buy range following Monday’s retake of a 273.78 buy point in a large cup-with-handle base. The 5% buy zone goes up to 287.47. In previous weeks, shares topped a smaller cup with handle’s 250.25 buy point. The stock was up 0.7% Wednesday morning.
Arista Networks, one of last week’s IBD 50 Stocks To Watch picks, continues to plod up the right side of a double-bottom base that offers a 143.67 buy point. With the stock about 11% away from the current entry, wait for a handle — which is likely forming now — to offer a more risk-optimal buy point. Arista’s RS line has been trending higher and is approaching a new high. ANET shares were flat early Wednesday.
IBD Leaderboard stock Costco dropped further beneath its 552.81 buy point from a cup with handle, as shares declined 0.6%. Wait for a bullish retake of the entry before buying shares. Shares added 0.5% early Wednesday.
Chip-equipment maker Axcelis Technologies continues to build a cup with handle that offers a 79.93 buy point, according to IBD MarketSmith chart analysis. The stock popped 1.1% Wednesday morning.
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Tesla stock rallied 2.3% Tuesday, snapping a five-day losing streak. Shares of the electric-vehicle giant moved up around 1% Wednesday morning, looking to add to Tuesday’s gains. Tesla stock will start trading at the new 3:1 split-adjusted price Thursday.
Tesla stock has been wrestling to overcome resistance around its 200-day line. Tesla is about 30% off its 52-week high.
Tesla Announces 3-For-1 Stock Split Date: Is Now The Time To Buy?
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dipped 0.2% Tuesday, as the stock continues to build the right side of a cup base that has a 179.71 buy point. Another interpretation could be a large double bottom that spans back to January. Either way, the buy point is identical. On the upside, the recent losing streak is likely to result in a handle, which would offer a lower entry.
Bullishly, the stock’s relative strength line is holding at new highs, indicating big stock market outperformance. Shares rose 0.7% Wednesday morning.
Microsoft dropped another 0.5% Tuesday, extending a losing streak to six sessions and drifting further away from its long-term 200-day line. The stock inched higher early 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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