Dow Jones Futures Are Ahead of Economic Data; Tesla shares fall on price cuts

Dow Jones futures fell Tuesday morning as global markets struggled following a sudden monetary policy shift by the Bank of Japan. The Dow Jones Industrial Average is on a four-day losing streak, led by Walt Disney and Nike. And Tesla stock saw its price target lowered by multiple analyst firms on Tuesday.


Economic data to be released Tuesday includes consumer confidence and existing home sales. The consumer confidence index in December is expected to rise to a reading of 101.0 from November’s reading of 100.2. Meanwhile, the Econoday consensus figure shows existing home sales falling further in November, to 4.20 million year-over-year versus October’s 4.43 million. Both readings are scheduled for 10 a.m. ET.

heico (HEI) rose 1.5% premarket Tuesday after the company posted better-than-expected quarterly earnings and sales results. General Mills (GIS) fell 1.5% despite beating Wall Street profit and sales targets.

Include more earnings reports this week Micron technology (MU) and Dow Jones stocks Nike (NKE).

Steel dynamics (STLD) will join the S&P 500 index and Super micro computer (SMCI) will join the S&P MidCap 400, according to S&P Dow Jones Indices, effective Thursday’s market open. Steel Dynamics climbed 0.7%, while shares of SMCI rose 7% in early morning trading.

Giant of electric vehicles Tesla (TSLA) fell 1% Tuesday morning after multiple price target cuts from Daiwa, Evercore ISI and Mizuho. Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) were higher leading up to today’s stock market open.

IBD Leaderboard stock Neurocrine Biosciences (NBIX), KL (KLAC), O’Reilly auto parts (ORLY) and United Rental (URI) — as well as Dow Jones names Caterpillar (CAT), DIY store (HD) and UnitedHealth group (UNH) — are among the top stocks to consider for investor watch lists.

Neurocrine and United Rentals are IBD Leaderboard stocks. UnitedHealth was featured in the Stocks section near a buy zone last week. Caterpillar and United Rentals were recent IBD Stock Of The Day companies.

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Dow Jones Today: Oil Prices, Treasury Yields

Prior to Tuesday’s opening bell, Dow Jones futures fell 0.1% from fair value. S&P 500 futures lost 0.2%. Tech-heavy Nasdaq 100 futures fell 0.5% in the morning action.

U.S. trading largely resisted the selloffs that ravaged markets across Asia on Monday after the Bank of Japan doubled the interest rate limit on its 10-year bonds to 5%. The move rippled global bond markets and caused a sharp rise in the yen. The Nikkei 225 in Tokyo fell 2.6%, while the other leading markets in Asia ended lower overall.

European markets recovered from the early blow and became mixed mid-session. US bonds fell, pushing the 10-year yield nine basis points higher to 3.66%, signaling a third straight rally.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.3% and the SPDR S&P 500 ETF (SPY) fell 0.1% early Tuesday.

Meanwhile, oil prices in the US rose less than 1% on Tuesday, but still on pace to add to Monday’s gains. West Texas Intermediate futures rose to nearly $76 a barrel in morning trading. Natural gas prices fell more than 5% in early action, after plunging 11% on Monday to a third straight drop.

Stock market rally under pressure

On Monday, tech stocks and small caps again underperformed, with the Nasdaq Composite down 1.5% and the Russell 2000 down 1.4%. The Dow Jones Industrial Average held up the best, losing just 0.5%. The S&P 500 lost 0.8% to close below its 50-day moving average for the second day in a row.

Monday’s The Big Picture column noted, “The legendary Santa Claus rally marks the period between Christmas and the first two trading days of 2023. The Dow Jones Industrial Average has averaged a 1.38% gain since 1950 for this period, while the S&P 500 has averaged 1.32%, according to data compiled by Dow Jones Market Data. Both indices traded higher about 78% of the time. There are still no signs that buyers are willing to take falling knives catch by the end of the year, but the skepticism may be great enough to ignite a few nibbles.”

This is an important time to read IBD’s The Big Picture column amid the continued volatility in the stock market.

Five Dow Jones stocks to buy and watch now

Dow Jones stocks to watch: Caterpillar, Home Depot, UnitedHealth

Dow Jones member Caterpillar continues to trade near a buy point of 239.95 in a flat base, according to IBD MarketSmith pattern recognition, in the wake of Monday’s slight decline. Stocks found support on the stock’s 21-day exponential moving average and the stock’s relative strength line is approaching new highs. CAT shares moved higher on Tuesday.

CAT stocks show a strong 97 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup.

Home Depot, a home improvement retailer, is about 4% below the 329.77 buy point of a cup-with-handle base after reversing last week’s breakout move. HD shares fell 0.5% Tuesday morning after Credit Suisse downgraded the stock from outperform to neutral, citing the slowing housing market as a key risk.

Healthcare giant UnitedHealth Group traces a flat base with a buy point of 558.20. Stocks are about 6% off their last entry after breaking support near their 50-day line last week. UNH shares are now trying to halt the recent drop around the 200-day line. Shares rose 0.3% on Tuesday morning.

4 Top Growth Stocks to Watch in the Current Stock Market Rally

Top stocks to watch: KLA, Neurocrine, O’Reilly, United Rentals

Chip equipment leader KLA has largely held its ground during the market’s weakness and is about 2% below a handle cup’s 392.60 after Monday’s modest loss. KLA shares rose premarket lower on Tuesday.

IBD Leaderboard Share Neurocrine is trying to find support at the 50-day level amid a two-week losing streak. A strong rebound would be positive for the stock’s immediate outlook and likely lead to the formation of a new base. Meanwhile, a sharp break could mean the stock needs more consolidation. Shares of NBIX were unchanged on Tuesday.

O’Reilly Auto Parts is trying to find support on its 50-day line this week and remains squarely above a flat-base entry of 750.98. A significant rebound from the 50-day line could be a follow-up point, but the market’s uptrend is currently under pressure, increasing the risk of buying stocks. ORLY shares were inactive on Tuesday.

United Rentals remains squarely below a buy point of 368.04 in a cup-and-handle pattern. Stocks are about 5% below the buy point, and further weakness would lead to the 7%-8% loss line. URI stock was unchanged on Tuesday.

Stocks to watch

Here are five top stocks to watch in today’s stock market, including three Dow Jones leaders.

Company Name Symbol Correct point of purchase Base type
KL (KLAC) 392.60 Cup with handle
United Rental (URI) 368.04 Cup with handle
Caterpillar (CAT) 239.95 Flat base
DIY store (HD) 329.77 Cup with handle
UnitedHealth (UNH) 558.20 Flat base
Source: IBD data as of December 19, 2022

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

Tesla stock

Tesla shares fell as much as 2.9% on Monday before cutting losses to just 0.2%. TSLA shares hit a new 52-week low at 145.82. Shares fell 1% Tuesday morning as the stock saw its price target lowered at Daiwa, Evercore ISI and Mizuho.

Daiwa lowered his goal from 240 to 177, in part because of the “Twitter distraction”. Evercore lowered its target from 300 to 200, citing weaker demand. And Mizuho lowered its goal from 330 to 285 due to a challenging global auto market.

On Monday, TSLA stock reached its lowest level since November 2020. The shares closed about 63% from their 52-week high.

Dow Jones leaders: Apple, Microsoft

Among Dow Jones shares, Apple shares sold 1.6% on Monday, the lowest level since mid-June. AAPL stock finished just off its 52-week low, which was set at 129.04 on June 16. The stock is about 27% lower than its 52-week high. Shares traded 0.4% lower on Tuesday.

Microsoft fell 1.7% on Monday as stocks sought support near their 50-day line amid a three-day losing streak. The software giant remains about 30% from its 52-week high. MSFT shares fell 0.5% early Tuesday.

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


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