The Dow Jones Industrial Average sold off Thursday after a key inflation reading, threatening to extend this week’s already-sharp losses. Key earnings movers were Acuity Brands (AYI), Constellation Brands (STZ) and Dow Jones stock Walgreens Boots Alliance (WBA). Meanwhile, Micron Technology (MU) earnings are due out after the close.
Acuity shares rallied around 1% after the company reported strong earnings and sales results. Constellation stock traded down 3% even after topping earnings and sales estimates.
In a volatile stock market environment, Dow Jones leaders Johnson & Johnson (JNJ) and Merck (MRK), as well as AutoZone (AZO), Bristol Myers Squibb (BMY), Eli Lilly (LLY) and Quanta Services (PWR), are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.
Dow Jones Today: Treasury Yields, Oil Prices, Inflation Report
After Thursday’s open, the Dow Jones Industrial Average sold off 1.8%, and the S&P 500 moved down 1.9%. The Nasdaq dived 2.4% in morning trade.
The 10-year Treasury yield retreated to 3.02% Thursday following Wednesday’s slide to 3.09%. The 10-year Treasury yield is trying to rebound after a sharp pullback. In mid-June, it hit its highest level since April 2011 at 3.48%.
Meanwhile, U.S. oil prices fell 2%, with West Texas Intermediate trading below $108 a barrel. In early March, WTI briefly topped out above $130.
The Federal Reserve’s preferred measure of inflation came out Thursday morning, with the personal consumption expenditure price index rising 0.6% for the month of May, with a year-over-year increase of 6.3%. Both numbers came in slightly lower than consensus Econoday estimates. Personal income rose 0.5% in May, in line with estimates.
The PCE price index is one measure of U.S. inflation, tracking the change in prices of goods and services purchased by consumers throughout the economy.
Meanwhile, first-time unemployment claims fell to 231,000, down from a revised 233,000 in the prior week, per the Labor Department.
Stock Market Volatility
The stock market posted mixed action Wednesday, as the Dow Jones industrials held a modest gain. The Nasdaq and S&P 500 notched slight losses.
Wednesday’s The Big Picture column commented, “The S&P 500, down 2% on Tuesday, edged 2 points lower. In contrast, gains of 2 points or more by at least eight of the Dow Jones Industrial Average’s 30 components — including Leaderboard position UnitedHealth (UNH) and IBD Long Term Leader Microsoft — helped hoist the blue-chip average to a nearly 0.3% gain.”
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Dow Jones Earnings: Walgreens
Walgreen Boots Alliance reported better-than-expected quarterly results early Thursday, but shares fell more than 5% in early morning trade.
WBA shares finished Wednesday about 26% off their 52-week high and sharply below their 200-day lines
Dow Jones Stocks To Watch: Johnson & Johnson, Merck
Dow Jones leader Johnson & Johnson is about 3% below a double bottom’s 181.84 buy point following Wednesday’s modest decline, according to IBD MarketSmith chart analysis. JNJ shares inched higher Thursday morning.
JNJ stock shows a 94 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.
Drug giant Merck gave up its flat base’s 95.02 buy point Tuesday, and is still about 3% below the entry after a 0.7% gain Wednesday. Early Thursday, the stock inched lower.
Top Stocks To Watch: AutoZone, Bristol, Eli Lilly, Quanta
AutoZone shares regained their cup with handle’s 2,130.60 buy point Wednesday amid a 0.7% rise. Shares were down 0.4% Thursday.
Bristol Myers finished just below a flat base’s 78.72 buy point after Wednesday’s 0.5% loss. The 5% chase zone runs up to 82.66. Shares inched lower Thursday.
SwingTrader stock Eli Lilly rose 1.7% Wednesday, rebounding from Tuesday’s sharp decline. Shares are in the 5% buy area that goes up to 329.81. Eli Lilly shares were down 0.2% early Thursday.
Leaderboard watchlist stock Quanta Services is tracing a messy cup with handle that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Shares are back at their 50-day line, which is a key level to watch. Quanta stock fell nearly 1% Thursday morning.
Tesla stock skidded 1.8% on Wednesday, extending a losing streak to three sessions. Shares threatened to add to those losses Thursday morning, falling 2%. The stock is sharply below its 50- and 200-day moving averages.
Tesla is likely to announce second-quarter sales late this week. Analysts polled by FactSet expect Tesla to have delivered 273,000 vehicles in the second quarter, with the range between 249,000 and 323,000. Tesla delivered 310,048 vehicles in the first quarter.
Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 45% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.3% Wednesday, snapping a three-day win streak. The stock is far below its long-term 200-day line and is about 25% off its 52-week high. Apple shares moved down 2.9% Thursday morning.
Software leader Microsoft gained 1.5% Wednesday, as it continues lower after finding stout resistance around its key 50-day line. The stock closed about 27% off its 52-week high. Microsoft shares declined 2.1% early Thursday.
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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