Dow Jones Returns After Key Economic Data; Tesla shares soar on earnings, Musk notes

The Dow Jones Industrial Average returned lower Thursday after an early release of fourth-quarter GDP and the first jobless claims. Meanwhile, Tesla stock rose as much as 11% on strong earnings results in the fourth quarter and subsequent comments from Chief Executive Elon Musk.


Department of Commerce GDP slowed to 2.9% year-on-year in the fourth quarter, higher than expected growth of 2.7% versus 3.2% growth in the third quarter. In addition, initial jobless claims from the Labor Department unexpectedly fell to 186,000. Claims were expected to rise to 202,000 versus 190,000 in the prior week.

The fourth quarter earnings season continues as the results are in US airlines (AAL), IBM (IBM), MasterCard (MA), Mobileye Global (MBLY), Serve now (Now and Southwest airlines (LUV).

Shares of American Airlines fell 1% lower in morning trading, while shares of Southwest fell nearly 4%. Dow Jones IBM shares beat Wall Street expectations for the fourth quarter, but shares fell more than 3.5% in early morning trading.

Shares of Mastercard rose less than 1% after its fourth-quarter report. Shares of Mobileye rose more than 11% on strong fourth quarter results. Finally, ServiceNow reported December quarterly earnings that topped views, while revenue growth only met expectations. NOW shares rose nearly 3% in morning trading.

Fair today

Tesla, the electric vehicle leader, rose 7% on strong fourth-quarter results and a series of price target increases from analysts. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were higher after today’s market open.

IBD Leaderboard stock Axon Enterprise (AXON), Recent IBD Stock of the Day Etsy (ETSY), Monstrous drink (MNST) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones names Chevron (CVX), JPMorgan Chase (JPM) and Visa (V) — are among the top stocks to buy and watch, with the continued strength of the market rally.

Axon is an IBD Leaderboard stock. Etsy and Vertex were recent IBD stocks of the day. Axon and JPMorgan were featured in this week’s Stocks Near a Buy Zone section.

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Dow Jones Today: Oil Prices, Treasury Yields

After Thursday’s opening bell, the Dow Jones Industrial Average fell 0.15% and the S&P 500 rose 0.2%. The tech-heavy Nasdaq composite cut gains up to 0.7% in the morning action.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) gained 0.7% and the SPDR S&P 500 ETF (SPY) was up 0.2% early Thursday.

Overseas, Hong Kong’s Hang Seng index reopened after the New Year holiday with a 2.4% increase. The mainland Shanghai Stock Exchange will remain closed through Friday.

The 10-year US Treasury yield ticked higher to 3.5% Thursday morning, appearing to be recovering after a two-day decline. With the rally in bonds heading into a fourth week, 10-year yields are trading near their lowest levels since mid-September.

Oil prices rose nearly 2% on Thursday, with West Texas Intermediate futures trading above $81 a barrel. Oil is down less than 1% this week after hitting an eight-week high on Monday.

Stock market rally

On Wednesday, the Dow Jones Industrial Average rallied slightly higher and the S&P 500 trimmed early losses to less than 0.1%. The tech-heavy Nasdaq Composite lost 0.2%, narrowing the decline after an early drop of more than 2%.

Wednesday’s The Big Picture column noted, “To find the new leaders, it’s time to use IBD screens and accept the results for what they are. This means checking the Stocks On The Move table , seeing what’s making waves within IBD Big Cap 20, and examining the leading sectors within the daily New Highs list in IBD Data Tables – just to name a few lists.

This is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.

Five Dow Jones stocks to buy and watch now

Dow Jones Stocks to Buy and Watch: Chevron, JPMorgan, Visa

Energy giant Chevron rounds out the right side of a cup base with a buy point of 189.78, according to IBD MarketSmith pattern recognition. Keep an eye out for a handle to provide a lower entry. Chevron’s fourth-quarter results are expected Friday. CVX shares rose 3% on Thursday after the company increased its dividend and announced a $75 billion share buyback program.

CVX shares show a solid 91 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Banking giant JPMorgan is back above a 138.76 flat-base buy point after four consecutive profit sessions. JPM shares rose 0.3% on Thursday morning.

Payment leader Visa is trading in a buy range above a buy point of 220.08 in a long pattern. The 5% buying area goes up to 231.08. Visa shares rose 0.5% early Thursday ahead of the company’s first-quarter fiscal results to be released post-close.

4 Top Growth Stocks to Buy and Watch in the Stock market rally

Top stocks to buy and watch: Axon, Etsy

Security leader Axon was up 1.7% on Wednesday to re-enter the buy range above a buy point of 189.72 in a cup-with-handle base. The buy zone tops out at 199.21. Axon shares rose 0.4% Thursday morning.

backstory: Formerly known as Taser International, the company has taken advantage of the business opportunity presented by public demand for increased oversight of the police force. The line of body cameras and associated software are now market leaders. It in Scottsdale, Ariz. established company also boasts a cloud-based digital evidence platform.

Etsy broke past a buy point of 137.01 in a handle cup on Monday, but fell further below the entry with a 0.6% loss on Wednesday. If the stock recaptures the buy point, the 5% buy range moves up to 143.86. ETSY shares rose 2.8% on Thursday.

backstory: The company is an online e-commerce platform provider where makers of crafts, vintage items, and other unique goods go to sell their products. It has a unique business model that has evolved in recent years from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.

Monster, Vertex Eye Purchase Points

Monster Beverage is within striking distance of the 104.75 buy point from a flat base following Wednesday’s 0.5% gain. MNST shares rose 0.1% on Thursday.

backstory: Monster Beverage leads an energy drink duopoly with privately owned competitor Red Bull. The company’s portfolio of energy drink brands includes Monster Energy, Reign and NOS Energy.

Monster dominates energy drinks in the US, claiming a 39% market share last year, according to data from Jefferies, resulting in record $5.5 billion in sales for the company. Red Bull accounted for 37% of the US energy drink market in 2021. Upstart Celsius (CELH), which is experiencing impressive growth, captured 4.9% of the market.

The recent IBD stock of the day, Vertex Pharmaceuticals, is approaching a buy point of 324.85 in a cup base after bullishly retaking its 50-day line in recent sessions. VRTX shares rose 0.4% on Thursday.

backstory: The company is known for its treatments for cystic fibrosis – a market Vertex estimates has 88,000 patients. Of those, there are still 20,000 patients who could receive the old-fashioned oral treatments. But analysts are looking forward to what’s new from Vertex, including an updated three-drug regimen that could strengthen Vertex’s position against rival AbbVie (ABBV).

Stocks to buy and watch in Stock Market Rally

Here are seven top stocks to buy and watch in the current stock market, including three Dow Jones leaders.

Company Name Symbol Correct point of sale Base type
Sample (MNST) 104.75 Flat base
Vertex (VRTX) 324.85 Cup base
Axon (AXON) 189.72 Cup with handle
Etsy (ETSY) 137.01 Cup with handle
JPMorgan (JPM) 138.76 Flat base
Chevron (CVX) 189.78 Cup base
Visa (V) 220.08 Cup with handle
Source: IBD data as of January 26, 2023

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

Tesla shares soar on earnings, Musk notes

Tesla shares rose higher on Wednesday, extending a profit streak to four sessions ahead of the company’s post-close earnings results. Despite their recent recovery, stocks remain well below their 50- and 200-day lines. Tesla shares closed about 62% from a 52-week high.

Shares of the EV giant were up 7% Thursday morning following the company’s strong fourth-quarter results. Tesla’s earnings rose 40% to $1.19 per share, while revenue grew 37% to $24.32 billion. Earnings beat estimates, while sales fell short of analysts’ forecasts.

Musk told investors Wednesday that Tesla has seen “the strongest orders to date in our history so far in January.” Tesla’s CEO said orders are currently coming in at “nearly double the production rate” and that this is resulting in higher prices for Model Y.

“I think there’s just a large number of people who want to buy a Tesla car but can’t afford it. And so these price changes are really making a difference to the average consumer,” Musk said.

Dow Jones leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.5% on Wednesday, completing a four-day profit streak. Stocks remain above their 50-day line after strong gains in recent sessions. Still, the stock is about 21% lower than its 52-week high. Apple will publish its quarterly results on February 2. AAPL shares were up 1.6% on Thursday.

Microsoft shares fell 0.6% on Wednesday following the company’s fourth-quarter earnings. MSFT shares fell back below the 50-day mark. A more decisive rematch would be bullish for the stock’s outlook, even as the shares remain 24% away from their 52-week high. Shares rose 1.8% early Thursday.

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


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