The Dow Jones Industrial Average fell 500 points on Friday morning after the Labor Department released a stronger-than-expected September jobs report. modern micro devices (AMD) plunged 8% and sparked an early sell-off in chip stocks after weaker-than-expected third-quarter earnings results were released late Thursday.
AMD warned that the weakness was a combination of a “weaker than expected PC market and significant inventory corrective actions across the PC supply chain.” In the meantime, Taiwan semiconductor manufacturing (TSM) reported higher than expected quarterly earnings. But shares were still down about 3.5%.
Stock market today: job report
The September job report was released ahead of Friday’s opening at 8:30 a.m. ET. The US economy grew by 263,000 jobs in September, beating Econoday estimates of 250,000 job growth. The unemployment rate fell to 3.5%, below the estimate of 3.7%.
Aehr test systems (AEHR) countered the chip sector’s early action. It beat Wall Street estimates for the fiscal first quarter and maintained its robust full-year growth targets. Shares are up more than 12% in morning trade.
lyft (LYFT) slipped more than 5% after RBC downgraded the stock from “Outperform” to “Sector Perform” with a price target of 30 to 16. Twitter (TWTR) was down 1% on Friday morning as a judge ruled Elon Musk must complete his $44 billion Twitter deal by Oct. 28 or face a November trial.
Market leader in electric vehicles Tesla (TSLA) traded 3.1% lower on Friday. Among the Dow Jones Industrials are tech titans Apple (AAPL) and Microsoft (MSFT) were both significantly lower after the market open today.
As the stock market continues to wait for a trend reversal day, Cummins (CMI), Murphy United States of America (MUSA), Neurocrine Life Sciences (NBIX), Apex Pharma (VRTX) and World Wrestling Entertainment (WWE) – as well as Dow Jones stocks UnitedHealth (UNH) – are among the top stocks to watch. Amid this week’s volatility, the status of the market remains “corrective” and investors should remain on the defensive.
Vertex is a new addition to the IBD Leaderboard. Cummins is an IBD SwingTrader stock. Murphy USA was featured in this week’s “Stocks Near a Buy Zone” column, along with three other top stock ideas. World Wrestling was a stock of the day on September 29th. Neurocrine was a stock of the day on September 26th.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday’s opening bell, the Dow Jones Industrial Average fell 1.7%, while the S&P 500 lost 2.2%. The tech-heavy Nasdaq Composite plunged 2.8%, with AMD, NVIDIA (NVDA), intel (INTC) and ASML (ASML) leads the declines.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 2.6% and SPDR S&P 500 ETF (SPY) 2%.
The 10-year Treasury yield rose to 3.9% on Friday morning. The 10-year Treasury yield fell as low as 3.56% this week before recovering. Last week, the 10-year Treasury yield briefly exceeded 4%, not in more than a decade.
Meanwhile, US oil prices continued this week’s recovery, rising more than 1% on Friday. West Texas Intermediate futures climbed to nearly $90 a barrel. Last week, the price of oil fell to its lowest level for the year – around $76 a barrel – before recovering.
Stock market rally attempt
On Thursday, the Dow Jones Industrial Average was down 1.1% while the S&P 500 closed down 1%. The Nasdaq Composite lost 0.7% and the small-cap Russell 2000 fell 0.6%. The S&P 500 and Nasdaq remain above their recent lows, leaving their rally attempts intact.
Monday’s price surge started a new rally attempt, which was your Day 1. However, if the major indices break their September 30th lows, it would nullify the rally attempt and leave the market looking further for a bottom.
Thursday’s Big Picture commented, “Thursday was day 4 of the stock market’s attempt to rally, so investors are now patiently awaiting a subsequent day that will mark the start of a new uptrend. Keep in mind that not all follow-ups work, so it’s important to increase engagement slowly and methodically as the uptrend pays off.”
Now, ahead of a possible follow-through day, is the perfect time to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market’s bottom signal. Missing this early opportunity can be a costly mistake.
A challenge in creating a watch list during a correction is that stock charts can change while you wait for a day ahead. This means that some bases under your watchlist stocks may deteriorate. So updating is important.
For more stock ideas, check out IBD stock listings such as IBD 50 and stocks near a buy zone.
Five Dow Jones stocks to watch right now
Keeping an Eye on Dow Jones Stocks: UnitedHealth
Dow Jones stock UnitedHealth fell 1.5% on Thursday, breaking a three-day winning streak and finding resistance at the key 50-day moving average. According to IBD MarketSmith chart analysis, shares are forming a flat base with a buy point of 553.23. UNH shares fell 1.55% on Friday morning.
UNH stock shows a solid 94 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. UnitedHealth reports its third-quarter results on October 14.
4 Top Growth Stocks to Watchrightent stock market correction
Top stocks to watch: Cummins, Murphy USA, Neurocrine, Vertex, WWE
Cummins is moving fast to the right of a cup base that has a buy point of 233.95. Stocks reclaimed their 50-day moving average in a big way this week, a positive sign. The company’s upcoming results are due November 4th. Cummins shares fell 0.7% on Friday morning.
Gas station and convenience store leader Murphy USA is setting up a flat base with a buy point of 303.19. Shares fell 1.5% on Thursday, continuing their decline after Tuesday’s bearish turnaround. The stock is finding strong resistance at its 50-day moving average. A decisive recapture of this level would be bullish on the stock’s base building prospects. Third quarter results will be released on October 26th. Shares fell 1.4% on Friday.
Neurocrine Biosciences is in the 5% buy area behind the buy point of a flat base of 109.36, according to chart analysis by IBD MarketSmith. The RS line made a new high on Thursday, a bullish signal. Shares were up 0.7% early Friday.
IBD leaderboard stock Vertex Pharmaceuticals is fast approaching the buy point from a flat base of 306.05 and above an early entry at 296.24. While the weak market status might keep you on the sidelines, the stock’s resilience makes it a top idea to watch. Its RS line is just below new highs, a potential sign of a major outperformance in the stock markets. VRTX shares fell 0.3% on Friday.
World Wrestling Entertainment is attempting to clear the entry of a 75.33 cup base but ended about 3% below entry after falling 0.7% on Thursday. The RS line made a new high this week. WWE shares rose 0.1% on Friday.
Join IBD experts as they analyze leading stocks in the latest stock market rally attempt on IBD Live
Tesla shares fell 1.1% on Thursday, closing at their lowest level since July 13. Shares fell 3.1% on Friday morning CEO Musk tweeted“I’m excited to announce the start of production of the Tesla Semi Truck with deliveries to @Pepsi on December 1st!” He added, “500 mile range and super fun to drive.”
Shares are about 40% below their 52-week high and well below their 50- and 200-day moving averages. The EV giant’s Q3 results are due October 19.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 0.7% on Thursday, ending a three-day winning streak. Shares are still about 21% below their 52-week high and below their 50- and 200-day moving averages. Third quarter results are as of October 27th. Apple shares fell 2.6% on Friday morning.
Microsoft fell 1% on Thursday, on a three-day winning streak. Shares are still recovering from last week’s 52-week low. The software giant remains about 30% below its 52-week high. Microsoft shares were down 4% early Friday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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