The Dow Jones Industrial Average briefly rose more than 600 points on Tuesday after releasing cooler-than-expected inflation numbers. The Federal Reserve’s two-day policy meeting also begins on Tuesday. And Boeing shares jumped further past a buy point after receiving a new Dreamliner order from United Airlines.
CPI inflation data
Inflation data showed that the consumer price index rose 0.1% in November, cooler than the expected 0.3% increase. The index rose 7.1% year over year, lower than the Econoday estimate of 7.3%.
In addition, the next meeting of the Fed kicks off on Tuesday with an interest rate decision on Wednesday. While the Fed has already telegraphed heavily with a 50 basis point hike, investors will be looking for further guidance on the Fed’s plans. According to the CME’s FedWatch tool, traders are placing a 79% chance of a rate hike of 50 basis points.
Monday late, Oracle (ORCL) reported earnings and sales that exceeded analyst estimates. Oracle shares were up 4% in morning trading. Include more earnings reports this week Darden Restaurants (DRI) and lennar (LEN).
Giant of electric vehicles Tesla (TSLA) returned lower on Tuesday. Among the Dow Jones stocks, Boeing (BA) then jumped 3% United Airlines (UAL) ordered at least 100 of the aerospace giant’s 787 Dreamliners, with an option to purchase an additional 100 new jets. Boeing shares extend past a buy point of 173.95 in a cup base.
Dow Jones Technology Leaders Apple (AAPL) and Microsoft (MSFT) were also sharply higher after today’s market open.
Allegro Microsystems (ALGM), IBD Leaderboard Share Dexcom (DXCM), KL (KLAC) and Interactive Brokers (IBKR) – as well as Dow Jones names Caterpillar (CAT), DIY store (HD) and UnitedHealth group (UNH) — are among the top stocks to buy and watch.
Dexcom and Trane are IBD Leaderboard stocks. UnitedHealth was featured in this week’s Stocks section near a buy zone. Allegro was a recent IBD 50 Stocks To Watch pick. Caterpillar, Interactive Brokers and Dexcom were recent IBD Stock Of The Day companies.
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Dow Jones Today: Oil Prices, Treasury Yields
After Tuesday’s opening bell, the Dow Jones Industrial Average rose 1.4% as Boeing rallied and Merck (MRK) rose more than 2% after clinical trials showed positive results from a joint cancer treatment therapy with Moderna (MRNA). Shares of Moderna rose more than 10% on Tuesday morning.
The S&P 500 gained 2.3% and the tech-heavy Nasdaq composite rose 3.1% in the morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 3.7% and the SPDR S&P 500 ETF (SPY) was up 2.6% early Tuesday.
The 10-year US Treasury yield was lower to 3.44% on Tuesday morning, a nosedive following the release of CPI inflation data.
Meanwhile, oil prices in the US continued to recover on Tuesday morning, rising 1.6%. West Texas Intermediate futures traded above $73 a barrel. Natural gas futures surged toward a fifth straight increase, up 3.7% in early trading to $6.83 per million British thermal units.
Stock market rally
The stock market ended Monday with solid gains. The Nasdaq composite rose 1.3%, the S&P 500 rose 1.4% and the Dow Jones Industrial Average climbed 1.6%. The Russell 2000 was up 1.2% and found support near the 50-day moving average.
Monday’s The Big Picture column noted, “Indices are in an indecisive phase, trading above support levels but also testing resistance. The Nasdaq remains above its 50-day moving average and the 11,000 level. But the S&P 500 encountered resistance at the 200-day moving average and has yet to reach the 4,000 level.”
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 Buy and Watch: Caterpillar, Home Depot, UnitedHealth
Dow Jones member Caterpillar continues to drift further away from a cup base’s 238 buy point, according to IBD MarketSmith pattern recognition, after Monday’s 2.5% increase. CAT stocks show a solid 95 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. CAT shares were up 2% on Tuesday.
Home improvement retailer Home Depot ended about 1% below the 329.77 buy point of a handle cup on Monday. HD shares rose more than 5% Tuesday morning, breaking out past the last buy point.
Healthcare giant UnitedHealth Group traces a flat base with a buy point of 558.20. Stocks are just 3% off the latest entry. UNH shares added 0.3% early Tuesday.
4 Top Growth Stocks to Watch in the Current Stock Market Rally
Top Stocks to Buy and Watch: Allegro, Dexcom, KLA, Interactive Brokers
Allegro Microsystems finished in buy range Monday past the 32.07 buy point of a handle cup after gaining 0.1% for the day. ALGM shares rose about 3.5% on Tuesday.
IBD Leaderboard stock Dexcom is trying to break out past a buy point of 123.46 in a flat base and is just below the entry point. Dexcom shares rose 2.3% early Tuesday.
Chip leader KLA continues past a handle cup’s 392.60 after Monday’s 1.9% increase. Bullish, the relative strength line continues to make new highs in ongoing market volatility. KLA shares rose 3.8% on Tuesday.
Interactive Brokers has formed a cup-with-handle pattern with an official buy point of 81.56, according to IBD MarketSmith’s analysis. But the stock is below its 50-day line after Monday’s losses. A decisive recapture of that level would be bullish for the stock’s immediate outlook. IBKR shares rose 1.5% on Tuesday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares fell 6.3% on Monday, giving up all of Friday’s gains and returning to their recent lows. Shares recovered 4% Tuesday morning before turning lower and hitting a new low in 2022.
In recent weeks, TSLA stock reached its lowest level since November 23, 2020, reaching a new 52-week low at 166.19. The shares closed Monday at 167.82, about 58% from their 52-week high.
Dow Jones leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stocks rose 1.6% on Monday, still below the key 50-day line. The 50-day line, which was a key support level, has moved into an area of resistance to control. The stock is about 21% off its 52-week high. Apple shares were up 3.4% on Tuesday.
Microsoft rose 2.9% on Monday as stocks continue to hold support at the 50-day mark. The software giant remains about 27% from its 52-week high. Microsoft shares rose 3.6% Tuesday morning.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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