Stocks open sharply lower after key inflation report

The Dow Jones Industrial Average sold off on Thursday after a key inflation reading, threatening to extend this week’s already deep losses. The main earnings drivers were Sharpness marks (AYI), Constellation Brands (STZ) and Dow Jones stock Walgreens Boot Alliance (WBA). Meanwhile, Micron Technology (MU) revenues are due after closing.


Acuity shares rebounded about 1% after the company reported strong earnings and sales results. Constellation shares traded down 3% even after beating earnings and sales estimates.

You’re here (TSLA) slipped 2% early Thursday. Elsewhere, technology leaders from Dow Jones Apple (AAPL) and Microsoft (MSFT) both fell more than 2% after the stock market opened today.

In a volatile stock market environment, the leaders of the Dow Jones Johnson & Johnson (JNJ) and Merck (MRK), as well as Auto area (AZO), Bristol Myers Squibb (BMY), Eli Lily (LLY) and Quantum Services (PWR), are among the stocks to watch. Keep in mind that continued stock market volatility is a reason to stay defensive.

Quanta is an IBD Leaderboard watchlist stock. Eli Lilly is an IBD SwingTrader stock. And Bristol was IBD Stock Of The Day on June 22. AutoZone was listed in the Stocks Near A Buy Zone column this week.

Dow Jones Today: Treasury Yields, Oil Prices, Inflation Report

After Thursday’s open, the Dow Jones Industrial Average fell 1.8% and the S&P 500 was down 1.9%. The Nasdaq plunged 2.4% in morning trading.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 2.3%. The SPDR S&P 500 ETF (SPY) lost 1.9% in early trading.

The 10-year Treasury yield fell to 3.02% on Thursday after Wednesday’s fall to 3.09%. The 10-year Treasury yield is trying to rebound after a sharp decline. In mid-June, it reached its highest level since April 2011 at 3.48%.

Meanwhile, US oil prices fell 2%, with West Texas Intermediate trading below $108 a barrel. In early March, WTI briefly rose above $130.

The Federal Reserve’s favorite inflation measure came out Thursday morning, with the personal consumption expenditure price index up 0.6% for May, with a year-over-year increase by 6.3%. Both figures are slightly lower than Econoday’s consensus estimates. Personal income rose 0.5% in May, in line with estimates.

The PCE price index is a measure of inflation in the United States, which tracks changes in the prices of goods and services purchased by consumers throughout the economy.

Meanwhile, first-time jobless claims fell to 231,000 from a revised 233,000 the previous week, according to the Labor Department.

Stock market volatility

The stock market posted mixed action on Wednesday, with Dow Jones Industrialists posting a modest gain. The Nasdaq and S&P 500 posted slight losses.

Wednesday’s The Big Picture column commented: “The S&P 500, down 2% on Tuesday, edged down 2 points. In contrast, gains of 2 points or more by at least eight of the 30 components of the Dow Jones Industrial Average – including ranking position UnitedHealth (UNH) and IBD Long Term Leader Microsoft – helped lift the blue chip average to a gain of nearly 0.3%. ยป

If you are new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one of the keys to investing guidelines. IBD offers a wide range of growth stock listings, such as Leaderboard and SwingTrader.

Investors can also create watchlists, find companies close to a buy point, or develop custom screens at IBD MarketSmith.

Dow Jones Earnings: Walgreens

Walgreen Boots Alliance reported better-than-expected quarterly results on Thursday, but shares fell more than 5% in early morning trading.

WBA shares ended Wednesday about 26% off their 52-week high and significantly below their 200-day lines

Four Dow Jones stocks to watch now

Dow Jones stocks to watch: Johnson & Johnson, Merck

Dow Jones leader Johnson & Johnson is about 3% below the 181.84 double bottom buy point after Wednesday’s modest decline, according to IBD MarketSmith’s chart analysis. JNJ shares rose slightly on Thursday morning.

The JNJ stock is posting a 94 out of a perfect IBD composite rating of 99, according to the IBD stock balance sheet. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.

Pharmaceutical giant Merck shed its flat base’s 95.02 buy point on Tuesday and is still around 3% below entry after gaining 0.7% on Wednesday. Early Thursday, the stock fell slightly.

4 growth stocks to watch in the currentrStock market rally

Top stocks to watch: AutoZone, Bristol, Eli Lilly, Quanta

AutoZone shares regained their cut with the 2,130.60 buy point of the handle on Wednesday amid a 0.7% rise. The shares fell 0.4% on Thursday.

Bristol Myers ended just below the buy point of 78.72 on a flat basis after Wednesday’s 0.5% loss. The 5% pursuit zone extends to 82.66. Shares fell slightly on Thursday.

SwingTrader Eli Lilly stock rose 1.7% on Wednesday, rebounding from Tuesday’s sharp decline. The shares are in the 5% buy zone which rises to 329.81. Shares of Eli Lilly were down 0.2% early Thursday.

According to IBD MarketSmith’s chart analysis, Quanta Services plots a messy cup with a handle that has a buy point of 138.56. Stocks are back at their 50-day line, which is a key level to watch. Quanta shares fell almost 1% on Thursday morning.

Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live

Tesla Stock

Tesla stock slipped 1.8% on Wednesday, extending a losing streak to three sessions. Shares were threatening to add to those losses on Thursday morning, falling 2%. The stock is well below its 50 and 200 day moving averages.

Tesla is likely to announce second-quarter sales this weekend. Analysts polled by FactSet expect Tesla to have shipped 273,000 vehicles in the second quarter, with a range between 249,000 and 323,000. Tesla shipped 310,048 vehicles in the first quarter.

Tesla stock traded as high as 1,243.49 on November 4. The shares are about 45% off that record.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 1.3% on Wednesday, ending a three-day winning streak. The stock is well below its long-term 200-day line and is about 25% off its 52-week high. Apple shares were down 2.9% on Thursday morning.

Software leader Microsoft gained 1.5% on Wednesday as it continues to slide after finding strong resistance around its key 50-day line. The stock closed around 27% off its 52-week high. Microsoft shares were down 2.1% early Thursday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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