The Dow Jones Industrial Average rallied 300 points Wednesday on Evergrande news and ahead of the Fed policy decision. Apple and Tesla stock continued to bounce with modest gains. But Adobe and FedEx slid on earnings.
Among the Dow Jones leaders, Apple (AAPL) rallied 0.7% Wednesday, while Microsoft (MSFT) moved up 0.5% in today’s stock market. Nike (NKE) is forming a new base ahead of Thursday’s earnings results. Disney (DIS) looked to rebound from Tuesday’s over-4% dive, rising 0.8% in early trade.
Tesla (TSLA) gained 0.5% Wednesday, on pace to add to Tuesday’s 1.3% rise. The stock is just above its latest buy point.
Adobe (ADBE) and FedEx (FDX) reported earnings after the close Tuesday.
Among the top stocks to buy and watch, Chipotle Mexican Grill (CMG) and Deckers Outdoor (DECK) are holding up well during this week’s market volatility.
Deckers, Microsoft and Tesla are IBD Leaderboard stocks. Chipotle was featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Evergrande, Fed Policy Decision
After the stock market open Wednesday, the Dow Jones Industrial Average extended gains to 0.9%, while the S&P 500 moved up 0.6%. The tech-heavy Nasdaq composite moved up 0.4% in morning trade.
Property developer China Evergrande Group said it would make an interest payment on an onshore bond, easing some default fears. The company is still expected to miss a separate payment due on its dollar bonds, which are widely held by international investors.
The Federal Reserve’s two-day meeting will finish Wednesday with a policy announcement at 2 p.m. ET followed up with comments by Fed Chairman Jerome Powell. Investors will look for insight into the Fed’s plans regarding its bond purchases and interest rates.
Among exchange traded funds, Innovator IBD 50 (FFTY) rose 0.5% Wednesday. Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rallied 0.15%. And the SPDR S&P 500 ETF (SPY) moved up 0.5%.
Market Rally Fades, But 3 Stocks Near Buy Points; China, Fed In Focus
Stock Market Breaks Key Support
The Nasdaq broke down sharply below its 50-day line Monday, adding more selling pressure to the major stock indexes. The S&P 500 broke support at that level Friday, while the Dow Jones Industrial Average hit its lowest level since June 21.
Tuesday’s The Big Picture commented, “The stock market violated important chart levels this week, and the change in character increases risk for investors. For now, it’s difficult to carry out any trades. Growth stocks need a good market in which to flourish, and that element is missing right now.”
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Dow Jones Stocks To Buy And Watch: Nike
Dow Jones leader Nike is tracing a flat base with a 174.48 buy point, according to IBD MarketSmith chart analysis. But shares are below their key 50-day moving average line and on a six-day losing streak following Monday’s 1.4% loss. Shares were up 1.2% Wednesday.
Nike earnings are due Thursday.
Dow Jones Media Giant Bounces
Dow Jones media giant Disney bounced almost 1% Wednesday, recovering a small part of Tuesday’s 4.2% dive. On Tuesday, CEO Bob Chapek said the company’s Disney+ streaming service faced headwinds in the current quarter and that investors should expect a subscriber increase in the “low single-digit millions” for Disney+. The comments were delivered at an investor conference held by Goldman Sachs.
Disney stock broke down through its key 50-day support level this week and is about 15% off its 52-week high.
Stock Market Earnings: Adobe, FedEx
After the close Tuesday, Adobe and FedEx reported quarterly earnings results.
Adobe beat Wall Street’s targets for its fiscal third quarter and guided modestly higher for the current period. The company earned an adjusted $3.11 a share on sales of $3.94 billion in the quarter ended Sept. 3. Analysts expected Adobe earnings of $3.01 a share on sales of $3.89 billion, according to FactSet. Adobe shares slid 3.5% in early morning trade.
FedEx lowered its earnings outlook for full-year 2022 after missing fiscal first-quarter earnings views, as costs to tackle pandemic disruptions to labor and supply chains rose. FedEx stock dived over 7% after the open, deepening a slump.
Stocks To Buy And Watch: Chipotle, Deckers
Friday’s IBD Stock Of The Day, Chipotle Mexican Grill, is rebounding from its key 50-day moving average, though it is a two-day losing streak. Shares were up 0.3% Wednesday. The burrito chain has been trading tightly following a post-earnings jump. Look for continued support around its 10-week line, which would be bullish for the stock’s prospects during the current market weakness. Positively, the stock’s RS line is at new highs.
According to IBD Stock Checkup, CMG stock boasts a perfect 99 IBD Composite Rating. The IBD Composite Rating identifies stocks with a blend of strong fundamental and technical characteristics.
IBD Leaderboard stock Deckers Outdoor is trying to break out past a 444.58 entry in a flat base, according to IBD MarketSmith, but is about 5% below the entry following three straight days of losses. Shares were up 0.4% Wednesday. Per Leaderboard commentary, the top retail stock is below a mini-trendline entry near 433 that provided an early buy point. Its relative strength line is also near new highs.
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Tesla stock rallied 0.5% Wednesday, on pace to add to Tuesday’s moderate gain. Shares are holding just above the stock’s latest buy point at 730. Shares also remain above their 700.10 aggressive buy point deep inside a correction. Meanwhile, a deep, large base continues to take shape.
On Jan. 25, Tesla stock hit a record-high 900.40, after climbing as much as 93% from a 466 buy point in a cup-with-handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved up 0.7% Wednesday, looking to add to Tuesday’s 0.3% rise. The stock is sharply below key support at the 50-day line. On Monday, Apple stock hit its lowest level since early July.
Software giant Microsoft rose 0.5% Wednesday, as the stock continues to trade just above its 50-day line. On Monday, shares briefly traded below their 50-day line for the first time since a June 21 breakout above a 263.29 buy point before closing just above it.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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