Dow Jones futures reversed from early losses Wednesday, looking to avoid a seventh straight decline. Fed chief 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. And several biotech stocks soared on positive Alzheimer’s drug news.
Cintas (CTAS), Paychex (PAYX) and Thor Industries (THO) were key earnings reporters Wednesday morning. Cintas rose modestly after better-than-expected results, while Paychex was also modestly higher. Thor Industries jumped 3% after topping earnings and sales estimates.
Netflix (NFLX) climbed more than 1% after Atlantic Equities upgraded the stock to overweight. Shares are about 70% off their 52-week high. Electric-vehicle leader Tesla (TSLA) traded 0.5% lower Wednesday. Tech titan Apple (AAPL) sold off more than 2% on reports of weak iPhone demand, while Microsoft (MSFT) was also lower ahead of today’s stock market open.
Biogen (BIIB) catapulted 49% higher in premarket trading on news that an experimental drug to treat Alzheimer’s slowed cognitive and functional decline in early stages of the disease for a large trial of patients. Biogen’s partner in the venture, Eisai, rocketed more than 60% on the Frankfurt Stock Exchange. And another company working on an Alzheimer’s drug, Eli Lilly (LLY), saw its shares jump 8% before the opening bell.
In the ongoing stock market weakness, DoubleVerify (DV), Hostess Brands (TWNK), Neurocrine Biosciences (NBIX), Toro (TTC), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Keep in mind that the deepening stock market correction is a time for investors to sit on the sidelines and map out watchlists.
DoubleVerify is an IBD Leaderboard stock. Hostess and Toro were featured in this week’s Stock Near A Buy Zone column. Neurocrine Biosciences was Monday’s Stock Of The Day. Vertex was a Stock Of The Day on Sept. 12.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Wednesday’s opening bell, Dow Jones futures rose 0.4% vs. fair value, while S&P 500 futures gained 0.3%. Nasdaq 100 futures inched lower, with Apple trading at the bottom of the list.
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) was down 0.1%, and the SPDR S&P 500 ETF (SPY) rose 0.3%.
The 10-year Treasury yield briefly topped 4% Wednesday morning, marking a new 12-year high, before reversing lower to 3.87%. The 10-year Treasury yield is tracking toward its ninth straight weekly advance, marking its longest rally since 2004. Meanwhile, U.S. oil prices reversed from early losses. West Texas Intermediate futures bobbed back near $80 a barrel, after falling to their lowest level of the year on Monday.
Stock Market Correction
The stock market continued to display weakness Tuesday, as the Nasdaq composite saw the index pare a 2.2% early gain to a gain of 0.2% by the close. Meanwhile, the Dow Jones Industrial Average and S&P 500 hit new bear market lows.
Tuesday’s The Big Picture column commented, “Even if major stock indexes flash a sign of strength with a follow-through day in coming days, it won’t be a sign to move aggressively move back into the market. Why? Because growth screens still aren’t yielding much in the way of prospects. Stocks bucking the trend and showing strength when the market is down are tempting to buy. But a weak market eventually takes everything down with it. Avoid the temptation of buying stocks holding up well. It’s an easy way to get chopped up, even if you’re taking small losses.”
The Nasdaq’s three-day rally attempt should have investors on the lookout for a potential follow-through day, which is when the Nasdaq or S&P 500 rises sharply in higher volume than the previous session on day 4 and later of a rally attempt. It gives investors the green light to start buying leading stocks breaking out past correct buy points. It should put your portfolio and mindset in sync with the stock market action by gradually committing capital to leading stocks.
Nevertheless, it is important for investors to put this downtime to good use. Now is an ideal opportunity to study market bottoms and to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through day, the market bottoming signal. Missing that early opportunity can be a costly mistake.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: UnitedHealth
Dow Jones stock UnitedHealth continues to hold above its long-term 200-day line. Shares are building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. The stock’s resilience made it Tuesday’s IBD 50 Stocks To Watch pick. Shares fell 0.7% Wednesday morning.
UNH stock shows a strong 95 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.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: DoubleVerify, Hostess, Neurocrine, Toro, Vertex, WWE
IBD Leaderboard stock DoubleVerify is still below its 28.07 buy point in a bottoming base despite Tuesday’s 3.5% rise. Per Leaderboard commentary, DoubleVerify found support near its 50-day line. Shares inched lower Wednesday.
Twinkie maker Hostess Brands is in the 5% buy area above a 23.23 buy point out of a cup with handle, according to IBD MarketSmith chart analysis. Bullishly, Hostess’ relative strength line is at new highs. Keep in mind that the weak market trend should keep you on the sidelines, but it is one of the top stocks to watch. The stock was inactive 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 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 drop. Shares were unchanged Wednesday. Neurocrine was also Monday’s IBD Stock Of The Day.
Toro stock is in a flat base and about 6% away from a 92.05 buy point. Shares are trading just under their 50-day line after Tuesday’s 0.7% fall. The RS line is at new highs. Toro shares traded flat Wednesday.
Vertex Pharmaceuticals is trying to regain its 50-day line following Tuesday’s 2.9% loss. It is forming a flat base with a 306.05 buy point. The stock’s resilience makes it a top idea to watch. Shares were unchanged Wednesday.
World Wrestling Entertainment continues to build a flat base that has a 75.33 entry. Shares tried to recover their 50-day line Tuesday, but were turned away. A decisive retake of that key level would be bullish for the stock’s base-building prospects. WWE shares were flat early Wednesday.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla stock rallied 2.5% Tuesday, rising for a second straight day. Still, shares are sharply below their 50-day line following last week’s heavy losses. Tesla stock pared early losses to less than 1% early Wednesday.
Last week, the stock’s relative strength line reached its highest level since April, but has fallen sharply in recent sessions. Shares are about 32% of their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 0.7% Tuesday, but are still near recent lows. On the upside, its RS line hit another new high Tuesday. Apple stock slid more than 2% Wednesday morning on reports that Apple is backing away from plans to increase production of its new iPhones due to lack of demand.
Microsoft lost 0.4% 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 for more on growth stocks and the Dow Jones Industrial Average.
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