Dow Jones Dives 500 Points On Hot Inflation Report; 10-Year Treasury Yield Tops 4%

The Dow Jones Industrial Average fell as much as 500 points before paring losses on Thursday on hot CPI inflation data. The third-quarter earnings season is heating up as Dow Jones stock Walgreens rallied on better-than-expected earnings and sales results.


The Labor Department’s consumer price index showed consumer prices rose 0.4% mom in September, hotter than the expected 0.2% rise. Inflation rose 8.2% yoy in September – also hotter-than-expected and just below August’s 8.3% reading.

Meanwhile, initial jobless claims rose to 228,000 from 219,000 the previous week, beating Econoday’s estimate of 225,000. Finally, September retail sales ended on Friday.

Stock market today: reporting season is getting hot

on Thursday morning, Black Rock (BLK) Delta Air lines (DAL), Domino’s Pizza (DPZ), Taiwan semiconductor manufacturing (TSM) and Walgreen’s Boots Alliance (WBA) published its quarterly results.

BlackRock stock slipped 5% after third-quarter results, while Delta fell just 1% despite a lack of estimates for the third quarter as the airline posted an upbeat forecast. Domino’s was up 6% in early morning trading. Apple chip supplier TSMC fell 2.2% after releasing a better-than-expected fourth-quarter revenue outlook. And Walgreens rose more than 1% after beating earnings and sales estimates.

Market leader in electric vehicles Tesla (TSLA) traded down about 4% on Thursday. Among the Dow Jones Industrials are tech titans Apple (AAPL) and Microsoft (MSFT) were both significantly lower after the market open today.

cardinal health (CAH), ConocoPhillips (POLICE OFFICER), Denbury (DEN) and Apex Pharma (VRTX) – as well as Dow Jones stocks rafters (CVX) and note (MRK) – are among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and build watch lists of the top growth stocks.

Cardinal Health and Vertex are IBD Leaderboard stocks. Chevron and Conoco were featured in this week’s “Stocks Near a Buy Zone” column, along with two other top stock ideas. Vertex was IBD’s stock of the day on Friday. Merck was IBD 50 Stocks To Watch pick on Tuesday.

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Dow Jones Today: Treasury Yields, Oil Prices

After Thursday’s opening bell, the Dow Jones Industrial Average pared losses to 0.8%, while the S&P 500 slipped 1.2%. The tech-heavy Nasdaq Composite fell 1.7%.

Among exchange-traded funds, Nasdaq 100-tracker Invesco QQQ Trust (QQQ) lost 2.25% and SPDR S&P 500 ETF (SPY) 1.5%.

The 10-year Treasury yield jumped higher on Thursday, surpassing 4% after the hot inflation data to trade at 4.06%. Meanwhile, U.S. oil prices fell about 1% on Thursday, sending West Texas Intermediate futures below $87 a barrel. Oil prices threaten to add losses for three consecutive days.

Stock market rally attempt

On Wednesday, the Nasdaq Composite fluctuated in a relatively narrow range. It is up almost 0.7% from the daily high. The tech-heavy index closed 9 points lower, less than 0.1%. Meanwhile, the S&P 500 fell 0.3%, while the Dow Jones Industrial Average fell 0.1%. All of these indices have also been tracked within a few days.

Wednesday’s The Big Picture commented: “The latest Investors Intelligence survey saw the move down move up to 44.1% from 41.8% a week earlier. The bulls ratio declined slightly, from 25.4% to 25% low since early 2016.”

The Bull/Bear Index is a contrarian psychological market indicator. Markets have historically tended to turn higher when bearish sentiment was strongest among surveyed newsletter writers and consultants.

After losses over the past few days, the major stock indices are looking for a Day 1 to start a new rally attempt. On Day 4 and beyond, investors should then be on the lookout for a possible following day. Until then, use your time to refine a strong watchlist of top-performing stocks. Many long-term leaders tend to break out on or near the follow-through tag, confirming a new uptrend. Missing this early opportunity can be a costly mistake.

For more stock ideas, check out IBD stock listings such as IBD 50 and stocks near a buy zone.

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Five Dow Jones stocks to watch right now

Keep an Eye on Dow Jones Stocks: Chevron, Merck

Energy giant Chevron decisively reclaimed its 50-day moving average last week as US oil prices rallied. Shares are consolidating below a buy point of 182.50 ahead of the company’s earnings release on Oct. 28. Chevron shares fell 0.3% early Thursday, tracking the drop with oil prices.

CVX stock has a strong 98 out of 99 perfect IBD Composite Ratings, according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.

Dow Jones member and IBD-50 stock Merck builds a double bottom with a buy point of 93.12, according to pattern recognition by IBD MarketSmith. The line of relative strength made a new high this week as the stock decisively reclaimed its key 50-day moving average. Third quarter results will be released before the opening bell on October 27th.

Merck shares fell 0.9% Thursday morning.

4 Top Growth Stocks to Watchrightent stock market correction

Top stocks to watch: Cardinal, Conoco, Denbury, Vertex

IBD leaderboard stock and medical leader Cardinal Health is forming a flat base with a buy point of 72.38 according to chart analysis by IBD MarketSmith. Shares of the drug distribution heavyweight retest their key 10-week moving average, according to leaderboard commentary. Winnings are due on November 4th. Shares traded 0.6% lower on Thursday.

Energy giant ConocoPhillips remains just below a buy point of 118.49 in a mug after gaining 0.6% on Wednesday. The stock’s RS line made a new high in the past few sessions, illustrating strong stock market outperformance. Winnings are due on November 3rd. Shares fell 0.8% on Thursday.

Denbury rose 6.6% on Monday, breaching a cup basis buy point of 94.05 after it was reported Exxon Mobile (XOM) is considering an acquisition. After two consecutive days of modest losses, shares are back in the 5% pursuit zone, which extends as far as 98.75, although the market remains in a correction. The company will announce earnings on November 3rd. Shares lost 3% on Thursday.

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Biotech leader Vertex Pharmaceuticals continues to build flat base with a buy point at 306.05 and an early entry at 296.90. Its RS line hit a new high on Tuesday, a sign of major outperformance in the stock markets. VRTX stock is testing its 50-day moving average, where it will look for some much-needed support. Shares traded 1.3% lower on Thursday.

Join IBD experts as they analyze leading stocks in the latest stock market rally attempt on IBD Live

Tesla stock

Tesla shares rose 0.3% on Wednesday, finally ending a five-day losing streak. Shares are still at their lowest since early July and about 48% below their 52-week high. Tesla stock slipped about 4% Thursday morning.

The EV giant’s third-quarter results are out on October 19. Tesla is expected to earn an adjusted $1.03 per share on sales of $22.4 billion.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.5% on Wednesday but are still holding above recent lows. Still, shares are about 24% below their 52-week high and below their 50- and 200-day moving averages. Apple shares fell 2.5% on Thursday.

Microsoft rose 0.15% on Wednesday, ending a four-day losing streak. Stocks are trying to recover from this week’s 52-week low. The software giant is down about 35% from its 52-week high. Microsoft shares lost 2.6% early Thursday.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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