The Dow Jones Industrial Average fell 175 points on Tuesday, amid the early release of economic data and February’s final trading session. Retail giant Goal ( TGT ) rose 3% as earnings fell less than expected, but CEO Brian Cornell warned of a “very challenging environment.” And Tesla ( TSLA ) stock turned lower, falling 0.5% ahead of Wednesday’s investor day.
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A slew of economic data came Tuesday, including two housing reports — the Case-Shiller Home Price Index and the Federal Housing Finance Agency’s House Price Index. The Case-Shiller index was 5.8% higher in December than last December, above estimates for 5.3%. The FHFA index fell 0.1% in December, less than the expected 0.3% drop.
Chicago PMI unexpectedly fell to 43.6 in February, vs. estimates that called for an increase to 45.0 vs. 44.3 in January. And the consumer confidence index fell to 102.9 in February, against an expected increase to 108.5 against 107.1 in January.
On the earnings front, Occidental Petroleum ( OXY ) missed its fourth-quarter targets late Monday, leading to a 1.6% gain in morning trade. The Warren Buffett-backed energy giant reported earnings fell 9% to $1.61 a share during the period, while revenue rose 4% to $8.22 billion. For the year, earnings rose 267% to $9.35 per share, while sales rose 43% to $37.1 billion. Occidental also increased its dividend and announced a $3 billion share buyback plan.
Elsewhere, Advanced Auto Parts (AAP), AutoZone (AZO), Shift4 Payments (FOUR), Workday (WDAY) and Zoom video communication (ZM) were income movers.
AAP shares rose nearly 4% in early trading, while AutoZone shares lost less than 1%. FIRE shares rose 9%, as Workday shares edged higher. Finally, Zoom stock jumped 3% in early morning trading.
Other notable companies reporting earnings this week are C3.ai (AI), Costco Wholesale (COST), Dollar tree (DLTR), Kohl’s (KSS), Lowes (LOW), Macy’s (M), Ross Stores (ROST) and Salesforce (CRM).
The stock market today
Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) traded modestly lower after the stock market opened.
IBD Leaderboard watchlist stock Palo Alto Networks (PANW), Deere (THE), Toll Brothers (To land Wing stop (WING) — as well as Dow Jones stocks American Express (AXP), Cisco Systems (CSCO) and JPMorgan Chase (JPM) — is among the best stocks to watch given the recent weakness in the stock market.
Palo Alto is an IBD Leaderboard Watchlist. Deere was a recent IBD Stock Of The Day pick. Cisco Systems and Wingstop were featured in last week’s Stocks Near a Buy Zone column.
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Dow Jones today: Oil prices, Treasury yields
After Tuesday’s market open, the last trading day of February, the Dow Jones Industrial Average fell 0.5%, while the S&P 500 fell 0.2%. The tech-heavy Nasdaq composite edged higher in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) traded down 0.1% and the SPDR S&P 500 ETF ( SPY ) fell 0.2% early Tuesday.
On Monday, the 10-year US Treasury yield settled at 3.92%, holding close to its highest level since November. Then on Tuesday, the 10-year yield ticked higher to 3.96%.
Oil prices recovered from Monday’s modest losses, with West Texas Intermediate futures rising nearly 2% to just above $77 a barrel.
Stock market rally is struggling
On Monday, the Dow Jones Industrial Average rose 0.2% and the S&P 500 rose 0.3%. The technology-heavy Nasdaq composite rose 0.6 percent.
Monday’s Big Picture column commented: “Monday’s pullback was little relief for indices that have been in downtrends for nearly a month. Until the indices show a clear change in direction, investors need to be cautious.”
Now is an important time to read IBD’s The Big Picture column amid the now struggling stock market rally.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: American Express, Cisco, JPMorgan
Featured in this week’s Stocks Near a Buy Zone column, American Express is building a giant cup-with-handle base showing a buy point at 182.25. Shares are just 4% below the buy point, having fallen 0.55% on Monday. Bullishly, the stock’s relative strength line is nearing new highs, a particularly positive sign ahead of a potential breakout. The AXP share rose 0.6 percent on Tuesday morning.
Banking giant JPMorgan is in buy territory above its 138.76 flat buy point after Monday’s 0.9% gain, according to IBD MarketSmith chart analysis. Shares are also pulling back from their key 50-day moving average. JPM shares were up 0.3% early Tuesday.
JPM stock scores a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Cisco Systems ended a five-day losing streak with a 0.5% gain on Monday, but remains below a flat-base 50.81 buy point. Shares are trying to stop sliding around their 50-day line and are about 4% below their entry. CSCO shares fell 0.4% on Tuesday.
4 top growth stocks to buy and watch Stock market rally
Top stocks to buy and watch: Palo Alto, Wingstop
IBD Leaderboard Watchlist stock Palo Alto Networks is building the right side of a base that has a 193.01 buy point on the heels of last week’s jump of more than 10%. PANW shares rose 0.5% on Tuesday morning.
Background story: Last week, the cybersecurity giant announced strong results for the quarter ended in January, with earnings hitting $1.05 a share, up 81% from a year earlier, on a 26% jump in revenue to $1.7 billion.
Wingstop is back in the 5% chase zone past a 169.04 cup-with-handle entry that tops out at 177.49 after recent losses. Investors should wait for signs of support before considering a stock purchase, especially amid deteriorating general market conditions. WING shares rose 1% early Tuesday.
Background story: The Dallas-based restaurant chain has more than 1,900 locations in the US and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the United Kingdom. Wingstop added 61 new locations in the fourth quarter, bringing Wingstop’s total footprint to 1,959 restaurants worldwide.
Deere, Toll Eye Last purchase point
Deere shares rose 1% on Monday, but still closed below the 50-day mark. Shares are 6% below a 448.50 buy point in a flat base. DE shares fell on Tuesday morning.
Background story: Deere, an industry bellwether, has pulled away from recession and inflation fears to deliver solid profits. In the past year, higher raw material prices have given farmers the opportunity to buy both new and upgraded machines. In the fiscal first quarter ended Jan. 29, the tractor maker posted a 124% jump in earnings per share on a 32.2% total revenue increase, both topping estimates. Earnings growth accelerated for the second consecutive quarter.
Homebuilder Toll Brothers is building a cup-with-handle base that shows a buy point of 63.29. Bullishly, the stock boasts a relative strength line at new highs after Monday’s 1.5% gain. The TOL share shows a solid 95 IBD Composite Rating. Toll Brothers shares rose 0.5 percent early Tuesday.
Background story: Last week, luxury homebuilder Toll Brothers topped revenue and earnings forecasts, while maintaining its full-year guidance. The homebuilder’s economic report comes as a 12-month decline in US existing home prices showed signs of easing in January.
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Shares to buy and watch in a stock market rally
These are six top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.
| company name | Symbol | Right point of purchase | Type of point of purchase |
|---|---|---|---|
| Deere | (THE) | 448.50 | Flat base |
| Toll Brothers | (TOLLS) | 63.29 | Cup with handle |
| Cisco Systems | (CSCO) | 50,81 | Flat base |
| Palo Alto Networks | (PANW) | 193.01 | Consolidation |
| JPMorgan | (JPM) | 138.76 | Flat base |
| Wing stop | (WING) | 169.04 | Cup with handle |
Source: IBD data as of February 28, 2023
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Tesla shares
Tesla shares rose 5.5% on Monday after the company announced that its Gigafactory Berlin is now producing 4,000 Model Y cars per week. The global electric car giant generally considers 5,000 units per week to be the target for its factories. At its current pace, the Berlin plant is churning out 208,000 vehicles per year.
Despite their strong rally since January 6, shares are still below the 200-day mark. That key level looms as a potential resistance area. Shares closed Monday about 47% off their 52-week high.
Tesla stock looked to extend Monday’s gains, rising 1% Tuesday morning.
Tesla will hold its investor day on Wednesday, with Musk teasing plans to present his “Master Plan 3” at the event. Analysts say they know few details, and many doubt there will be any new product announcements. Musk says his Master Plan 3 is about a “path to a fully sustainable energy future for the Earth.”
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple rose 0.8% on Monday, bouncing back above support around its 200-day line. Shares are around 18% lower than their 52-week high. Apple shares fell 0.5 percent on Tuesday.
Microsoft shares remain below their 200-day mark despite Monday’s 0.4% gain. The stock is more than 20% off its 52-week high after recent losses. MSFT stock was down 0.4% early Tuesday.
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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