Blog

Oct 29, 2023

Dow Jones Reverses Ahead Of Fed Minutes; Tesla Stock Slides On More Price Cuts

The Dow Jones Industrial Average reversed higher Wednesday ahead of minutes from the Federal Reserve's July policy meeting. Meanwhile, Tesla stock skidded after the electric-vehicle giant cut prices

The Dow Jones Industrial Average reversed higher Wednesday ahead of minutes from the Federal Reserve's July policy meeting. Meanwhile, Tesla stock skidded after the electric-vehicle giant cut prices in China for the second time in less than a week.

The Fed minutes, due out at 2 p.m. ET, are expected to provide insight into the Federal Reserve's thinking on future interest rates.

Ahead of the market open, the Commerce Department released figures on housing starts and permits. Housing starts in July rose to 1.452 million, while permits inched up 1.442 million. Both came in slightly below estimates of 1.455 million and 1.464 million, respectively.

Elsewhere, Asian markets came under pressure Wednesday after defaults mounted for China's Zhongrong International Trust. The bank is seen as a financial sector linchpin in the country's massive, unregulated shadow banking sector. Zhongrong has no immediate plan to cover what are now dozens of payments in default, since its short-term liquidity has suddenly dried up, according to a company official quoted by Bloomberg.

Early Wednesday in the U.S., China-based stocks led the early declines on the Nasdaq 100. JD.com (JD) and Tencent Holdings (TCEHY) reported earnings. Other key earnings movers included Cava (CAVA), Coherent (COHR), Target (TGT) and TJX (TJX).

Cava raced 3% higher in morning trade, while Coherent plunged 32%. JD shares declined more than 4%, as TJX rallied 3.3% in early action.

Finally, Target surged more than 6% after the company handily topped earnings estimates. Target reported earnings of $1.80 per share for the quarter compared with 39 cents a share last year. The results mark a major turnaround after earnings fell for the past five quarters. Sales fell for the first time in almost six years as total revenue declined 4.9% to $24.8 billion.

IBD Leaderboard stock Tesla (TSLA) skidded another 2.8% Tuesday, closing further below its 50-day line. Amid the continued selling, it's clear that the stock requires more time to consolidate before a new entry.

Tesla cut the price of its Model S luxury sedan in China to 754,900 yuan, or $103,463 in U.S. currency, from 808,900 yuan, according to Barron's. It also dropped the price of its Model X SUV to 836,900 yuan, or $114,702, from 898,900 yuan.

The electric-vehicle giant cut losses to around 0.3% early Wednesday after sliding at the market open.

Dow Jones tech icons Apple (AAPL) and Microsoft (MSFT) were mixed after today's stock market open.

Other stock market leaders include Alphabet (GOOGL), Meta Platforms (META) and Nvidia (NVDA). GOOGL stock fell 0.5%, while Meta shares traded down 0.9% in early action. Finally, Nvidia shares climbed 1.2% after a pair of price-target hikes. Raymond James and Piper Sandler both upped their price targets to 500.

Costco Wholesale (COST), Expro (XPRO), SLB (SLB) and MercadoLibre (MELI) — as well as Dow Jones stocks Boeing (BA), Intel (INTC) and Visa (V) — are among the best stocks to watch as the market's uptrend comes under increasing pressure.

Tesla and Costco are IBD Leaderboard stocks, while Boeing and SLB were recent IBD Stock Of The Day picks. Costco was featured in this Stocks Near A Buy Zone column.

IBD's latest newsletter MarketDiem gives you actionable ideas for stocks, options and crypto right in your inbox

After Wednesday's opening bell, the Dow Jones Industrial Average reversed from early losses to gain 0.35%, while the S&P 500 rose 0.2%. The tech-heavy Nasdaq composite declined 0.1% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 0.2%, while the SPDR S&P 500 ETF (SPY) moved up 0.1% early Wednesday.

Early Wednesday, the 10-year U.S. Treasury yield ticked higher to 4.23%, after settling at 4.22% Tuesday.

West Texas Intermediate oil prices have pulled back from early August highs, with WTI futures trading up a fraction to just above $81 a barrel. That places them roughly even for the month, with the $80 mark becoming the important indicator of support. Weekly inventory data from the Energy Information Administration is due at 10:30 a.m. ET.

On Tuesday, the Dow Jones Industrial Average sold off 1%, while the S&P 500 lost 1.2%. The tech-heavy Nasdaq composite tumbled 1.1%.

Tuesday's Big Picture column commented, "Technically, this is indeed meaningful. A big swing below the 50-day line indicates that institutional investors are not excited about accumulating shares amid the pullback to lower prices. Yet at least on Tuesday, the index crept quietly below the line, rather than plunge below it."

Now is an important time to read IBD's The Big Picture column as the stock market continues to pull back from this year's highs.

Five Best Dow Jones Stocks To Buy And Watch Now

Aerospace giant Boeing broke out in recent weeks, topping a 223.91 flat-base entry. Shares are back in the 5% buy area that goes up to 235.11, following Tuesday's 1.9% slide. BA stock moved up 0.1% Wednesday morning.

Chip giant Intel continues to etch a handle onto a cup base, offering a 37.19 buy point. Shares are rebounding from their 50-day line, about 6% away from their latest entry, with a 2.55% drop Tuesday. Intel shares dropped 1% Wednesday.

And Dow Jones payments leader Visa continues to hold in buy range past a 235.57 flat-base buy point, according to IBD MarketSmith pattern recognition. V stock was down 0.6% early Wednesday.

4 Top Growth Stocks To Buy And Watch In The Stock Market Rally

Offshore drilling services provider Expro extended a losing streak to three sessions Tuesday. A recent breakout past a 23.72 buy point in a cup-with-handle base is sputtering, according to IBD MarketSmith. XPRO stock was up 1.2% Wednesday morning.

Energy giant SLB, formerly known as Schlumberger, gave up its 58.70 buy point in a cup with handle with a 2% drop Tuesday. SLB stock drifted slightly higher early Wednesday.

MercadoLibre jumped last week to break out past a cup base's 1,365.64 buy point. But MELI stock is sharply under the buy point, as it dropped another 0.8% Tuesday. MELI stock is close to triggering the 7% sell rule. Shares dipped 0.4% Wednesday.

Among IBD Leaderboard stocks, Costco was a new half-size position last week. The megacap retailer is just shy of a handle entry at 571.16, and it's trying to hold above a mini trendline near 559-560. On Wednesday morning, Costco stock was up 0.5%.

Learn How To Time The Market With IBD's ETF Market Strategy

These are four best stocks to buy and watch in today's stock market, including a Dow Jones leader.

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

Among Dow Jones stocks, Apple stock slid 1.1% Tuesday, right at its recent lows. The stock remains squarely below the 50-day line following sharp losses in recent weeks. Shares traded up 0.2% Wednesday.

Microsoft shares remain squarely below their 50-day line, a sign the stock needs more time to consolidate before a new buy point emerges. And on Wednesday morning, the stock fell 0.2%.

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

YOU MAY ALSO LIKE:

Top Growth Stocks To Buy And Watch

Learn How To Time The Market With IBD's ETF Market Strategy

Find The Best Long-Term Investments With IBD Long-Term Leaders

MarketSmith: Research, Charts, Data And Coaching All In One Place

How To Research Growth Stocks: Why This IBD Tool Simplifies The Search For Top Stocks