Stocks Higher After December Jobs Report
The Dow Jones Industrial Average rallied Friday after the Labor Department’s December jobs report. Meanwhile, Tesla stock dived 7%, hitting a new low after the company again cut prices in China.
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For the December jobs report, nonfarm payrolls grew 223,000, more than the expected 200,000 workers for the month, and less than the 263,000 new hires in November. The unemployment rate dropped to 3.5% vs. the expected 3.7% rate.
Average hourly earnings rose just 0.3%, below the 0.4% estimate and down from November’s 0.6% increase. Per Econoday, November was the seventh straight month — and ninth out of the last 10 months — that payroll growth exceeded estimates.
Meanwhile, the Institute for Supply Management’s December services index is also due out Friday. The ISM services index is expected to expand, with a 55.0 reading.
Ulta Beauty (ULTA) dropped nearly 2% after Wells Fargo downgraded the stock from equal weight to underweight, with a lowered price target of 400. Southwest Airlines (LUV) fell 1.5% after warning that its recent flight cancellations would cost up to $825 million.
Electric-vehicle leader Tesla (TSLA) dived 7% Friday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were mixed after today’s stock market open.
Cardinal Health (CAH), Deere (DE), Medpace (MEDP) and IBD Leaderboard stock Neurocrine Biosciences (NBIX) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Walmart (WMT) — are among the top stocks to consider for investor watchlists. Keep in mind the ongoing market weakness should keep investors on the sidelines.
Neurocrine is an IBD Leaderboard stock. Caterpillar and Medpace were recent IBD Stock Of The Day companies. And Cardinal Health was featured in last week’s Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
After Friday’s opening bell, the Dow Jones Industrial Average rose 0.9%, and the S&P 500 gained 0.7%. And the tech-heavy Nasdaq composite rose 0.3% in morning action, with Tesla and a handful of China-based names dragging at the bottom of the list.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.5% and the SPDR S&P 500 ETF (SPY) traded up 0.7% early Friday.
The 10-year Treasury yield ticked lower to 3.7% Friday morning after the December jobs report, looking to add to Thursday’s modest gains. The 10-year yield is still on pace to fall sharply for the week.
Meanwhile, oil prices extended gains Friday morning after Thursday’s bounce. West Texas Intermediate futures rose more than 1%, trading just above $74 a barrel, set for solid weekly losses.
Steep declines in natural gas continued, with Henry Hub futures down more than 3% early to $3.59 per million British thermal unit. Natural gas prices tumbled more than 35% in December, and are down nearly 20% so far in January.
Stock Market Correction
On Thursday, the Dow Jones Industrial Average declined 1%, and the S&P 500 dropped 1.2%. The Nasdaq composite sold off 1.5%.
Thursday’s The Big Picture column commented, “Thursday was Day 4 of a rally attempt, so a potential follow-through day could occur any time. However, there aren’t very many leading stocks near new buy points, which is a key factor of successful follow-through days.”
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Caterpillar, Chevron, Walmart
Dow Jones member Caterpillar held above its flat base’s 239.95 buy point despite Thursday’s 0.45% fall, according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. Shares were up 1.5% Friday.
CAT stock shows a strong 98 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.
Energy giant Chevron cut in this week’s losses, with a 1.8% rally Thursday. Shares remain below their 50-day line, even as they build a cup base that has a 189.78 buy point. CVX shares rose 1% Friday morning, rising with oil prices.
Discount retailer Walmart is building a cup with handle that has a 154.74 buy point. But shares are below their 50-day line after sharp losses in recent weeks. Walmart shares climbed 1.5% Friday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Cardinal Health, Deere, Medpace, Neurocrine
Cardinal Health, a recent IBD Stock Of The Day, dropped 0.5% Thursday, still below its 50-day line. CAH stock was up 0.7% Friday.
Recent IBD Stock Of The Day, Deere, is building a flat base with a 448.50 buy point, even as it gave up support around its 50-day line during Thursday’s 2.1% decline. DE stock traded up 0.9% Friday morning.
Medpace fell further below support at its 50-day line Thursday, indicating the medical leader needs more time to consolidate. That’s normal with the market trend in a correction. For now, the correct buy point stays at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock was up 1% Friday.
IBD Leaderboard stock Neurocrine Biosciences is rebounding from support at its 50-day line. A flat base is close to forming and could form as early as this week. If it does finish, the flat base will show a buy point at 129.39, with an early entry at 122.93. NBIX stock was up 0.8% Friday.
Stocks To Watch In Ongoing Stock Market Correction
These are six top stocks to watch in today’s stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Cardinal Health | (CAH) | 81.67 | Flat base |
| Deere | (DE) | 448.50 | Flat base |
| Caterpillar | (CAT) | 239.95 | Flat base |
| Chevron | (CVX) | 189.78 | Cup base |
| Walmart | (WMT) | 154.74 | Cup with handle |
Source: IBD Data As Of Jan. 6, 2023
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla Stock Dives On China Price Cuts
Tesla stock skidded 2.9% Thursday, giving up a large part of Wednesday’s bounce. This week, shares hit a 52-week low at 104.64 and are about 73% off their 52-week high.
Shares threatened to add to Thursday’s losses, diving more than 7% Friday morning. Tesla stock hit a new low, trading as low as 102.13.
Tesla said it cut prices by between roughly 6% and 13% on its two most popular electric car models in China, which are made at the Shanghai factory. Including the latest discounts, Model Y prices now start at the equivalent of around $37,000. The Model 3 starts at roughly $32,700, more than 30% cheaper than the price of a standard Model 3 selling on Tesla’s U.S. website.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 1.1% Thursday, ending just off its 52-week low price of 124.17, set on Tuesday. The stock is around 32% off its 52-week high. Shares rose 1.1% Friday morning.
Microsoft stock tumbled another 3% Thursday, on pace to fall more than 7% for the week. The software giant is about 34% off its 52-week high and is approaching its 52-week low of 213.43, reached on Nov. 4. MSFT stock moved 0.2% lower early Friday.
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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