Reversal in Dow Jones Industrial Average Expected Prior to Powell’s Speech
The Dow Jones Industrial Average saw a reversal in its trajectory on Wednesday as traders prepared for Federal Reserve Chair Jerome Powell’s scheduled speech. Meanwhile, Microsoft (MSFT) experienced a significant boost in their stock price after announcing strong earnings, while Alphabet (GOOGL) saw a decline in stock prices due to mixed results. Additionally, Meta is set to release its earnings later in the day.
Earlier in the day, the Commerce Department reported an increase in new home sales for September, reaching an annual rate of 759,000 compared to August’s 675,000. After the stock market closed, Powell was scheduled to make introductory remarks at the 2023 Moynihan Lecture in Social Science and Public Policy, an event sponsored by the American Academy of Political and Social Science. Moving on to earnings, top movers on Wednesday included Boeing (BA), Paccar (PCAR), Texas Instruments (TXN), Snap (SNAP), and Visa (V).
In morning trade, Boeing’s stock declined by 1%, while Paccar rose less than 1%. On the other hand, TXN stock tumbled by 3.6%, Snap shares rallied by 1%, and Visa stock increased by nearly 1%. Microsoft, a software giant, experienced a significant jump of nearly 4% after surpassing Wall Street’s expectations for its fiscal first quarter, primarily due to its robust cloud-computing business. The company also raised its outlook for the current quarter. Alphabet reported third-quarter earnings that exceeded analyst estimates, but the stock tumbled by more than 9% as cloud-computing sales growth fell short. However, YouTube had a strong quarter.
Looking ahead, Meta Platforms (META) is expected to release its earnings after the market closes.
Dow Jones Today: Impact of Oil Prices and Treasury Yields
As of the opening bell on Wednesday, the Dow Jones Industrial Average fell by 0.35%, while the S&P 500 experienced a 1% loss. The tech-heavy Nasdaq composite dropped by 1.5% in morning action. In terms of U.S. exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) experienced a 1.6% decline, while the SPDR S&P 500 ETF (SPY) dropped by 1% early in the day. The yield on the 10-year U.S. Treasury bond slightly increased to 1.89% on Wednesday morning, following its settlement at 1.84% on Tuesday.
Oil prices saw a slight increase on Wednesday, pausing after a three-day losing streak. West Texas Intermediate futures traded below $84 a barrel.
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Stock Market Correction Overview
On Tuesday, the Dow Jones Industrial Average rose by 0.6%, while the S&P 500 gained 0.7%. The tech-heavy Nasdaq composite experienced a significant increase of 0.9%. In the Big Picture column for Tuesday, it was mentioned that the Nasdaq composite performed the best out of all the major indexes, with a 0.9% increase. The index continued to maintain a strong position at the 13,000 level, distancing itself further from its 200-day moving average but still below its 50-day moving average. So far, the Nasdaq has shown a positive performance for the week, being up by 1.2%, and has seen a nearly 27% increase for the year.
This is a critical time to read the Big Picture column from IBD, as the current outlook indicates that the market is in a correction phase. It is important to learn how to navigate and adjust to changing market conditions.
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Stock Market Today: Tesla, Nvidia, and Dow Jones Leaders
Early on Wednesday, electric-vehicle giant Tesla (TSLA) saw a slight decline of 0.4%, while Nvidia (NVDA) experienced a 0.7% loss. Meanwhile, Dow Jones tech giants Apple (AAPL) and Microsoft had mixed results following the opening of the stock market. IBD Leaderboard member stocks such as Arista Networks (ANET), Lululemon Athletica (LULU), Meta Platforms, and Light & Wonder (LNW), as well as Dow Jones stocks Walmart (WMT) and Salesforce (CRM), are among the top stocks to buy and watch during the current stock market correction. Light & Wonder was featured as an IBD Stock Of The Day.
Analysis of Dow Jones Leaders: Walmart and Salesforce
The retail giant Walmart is currently forming a flat base with a 165.85 buy point, according to IBD MarketSmith chart analysis. The company’s shares have recently regained support from their 50-day line and are approximately 2% away from their latest entry. On Wednesday, WMT stock experienced a slight decline. In terms of software leader Salesforce, the stock is currently facing resistance around its crucial 50-day line. If the stock manages to exceed this key level, it will move closer to a 228.79 buy point in a double-bottom base. CRM stock dropped by 0.4% on Wednesday morning.
Top Growth Stocks to Watch During the Stock Market Correction
On Tuesday, Arista Networks saw a rise of 2.1% as it closed above its 50-day line and moved approximately 4% away from a 198.70 buy point in a flat base. The company is set to release its third-quarter results on October 30th. Lululemon experienced a slight increase of 0.2% on Tuesday, staying slightly below a flat base’s 406.94 buy point, as recognized by IBD MarketSmith pattern recognition. Investors should wait for a sustained move past this entry point as a buy signal. On Wednesday morning, LULU stock dropped by 0.4%. Facebook-parent Meta Platforms witnessed a decline of 0.5% as it gave up its 312.87 buy point. The stock is still trading below a cup base’s official buy point at 326.20. The company is scheduled to release its third-quarter results late on Wednesday. Meta shares experienced a 1.6% loss on Wednesday. Light & Wonder, a casino games maker, is nearing the flat base’s 79.97 buy point. Aggressive investors could consider using the recent high of 77.25 as a buy trigger. However, it is important to note that the market is currently in a correction phase, which increases the risk level. LNW stock experienced an early increase of almost 1% on Wednesday.
Best Stocks to Watch in Today’s Stock Market Action
Here are four stocks that investors should watch on Wednesday: Meta Platforms (META), Salesforce (CRM), Lululemon (LULU), and Arista Networks (ANET).
Join IBD Live for In-depth Analysis of Leading Stocks in the Current Stock Market Correction
Tesla stock experienced a rally of 2.1% on Tuesday, reaching the 200-day line. Shares are currently trying to find support at this long-term level, while being about 30% off their 52-week high. Early on Wednesday, shares moved slightly downwards, potentially erasing a portion of Tuesday’s gains.
Analysis of Dow Jones Leaders: Apple and Microsoft
Among the Dow Jones stocks, Apple saw a slight increase on Tuesday as it consistently found support around the 200-day line. The company is scheduled to release its fiscal fourth-quarter report on November 2nd. Shares dropped by 1.2% early on Wednesday. Microsoft stock saw a gain of 0.4% on Tuesday as shares continued to find support around their 50-day line. A new base is being formed, with an early entry point at 340.86. Another early entry point is at the October 16th high of 336.14. However, on Wednesday morning MSFT stock opened above both early entry points with its 4% gain. For more information on growth stocks and the Dow Jones Industrial Average, be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen.
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