The Dow Jones Industrial Average rose as much as 230 points before paring gains Wednesday morning ahead of the Federal Reserve’s interest rate decision at 2 pm ET, followed by the Federal Reserve Chairman’s news conference Jerome Powell.
general mills (GIS) moved on Wednesday, with shares up more than 3% in morning trading after strong earnings results, although sales missed estimates. house builders KB Home (KBH) and Lennar (LEN) will report after the close.
micron technology (MU) fell more than 1% after Mizuho downgraded the stock to neutral from buy.
Elsewhere, leader in electric vehicles Tesla (TSLA) traded 0.2% lower on Wednesday. Among the industrialists of the Dow Jones, the technological titans Apple (AAPL) and Microsoft (MSFT) were higher after the opening of the stock market today.
Major stocks to watch amid recent market weakness include continental resources (CL), double check (DV) and Vertex Pharmaceuticals (VRTX), as well as Dow Jones stocks Chevron (CLC) and Merck (MRK). Note that the new stock market correction is a good reason for investors to be mostly, if not entirely, on the sidelines.
DoubleVerify is an IBD Leaderboard stock, but its position size was reduced during last week’s losses. Tesla was featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Fed Meeting
After the opening bell on Wednesday, the Dow Jones Industrial Average was up 0.6%, while the S&P 500 was also up 0.6%. The Nasdaq Tech Composite gained 0.4% in morning action.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.2%, and the SPDR S&P 500 ETF (SPY) was up 0.5% in early trading.
The 10-year Treasury yield ticked lower at 3.54% on Wednesday, declining from this week’s new high. Meanwhile, oil and natural gas prices in the United States rose. Oil prices rose more than 2%, pushing West Texas Intermediate futures above $86 a barrel.
The Fed’s two-day meeting will wrap up on Wednesday, with an interest rate decision at 2 p.m. ET and Fed Chairman Jerome Powell’s comments at 2:30 p.m. 18% of an increase of 100 basis points. Investors will be looking for clues about the pace of future rate hikes and how far the central bank will go.
Adding it all up, markets expect the Fed’s key policy rate to end this year with a target range of 4%-4.25% or, slightly more likely, 4.25%-4.5%. And that may not be all. The odds have passed 50% for a further quarter point rally to a range of 4.5%-4.75% next March or May, according to CME Group’s FedWatch page.
Stock Market Correction
On Tuesday, the stock market posted another disappointing performance. The Dow Jones Industrial Average lost 1%, while the S&P 500 fell 1.1%, both below their lows on Friday.
Tuesday’s The Big Picture column commented: “Amid expectations of a hawkish statement, the stock market may not like what the Fed has to say on Wednesday. A tradable rally could ultimately take the Nasdaq back to the 12,000 level. But it’s still a market under distribution.” , so a trip to the June lows could also be on the cards.”
To prepare for another stock market rally, investors should expect a follow-up day. When the market is in a correction, look for at least one major index to try to bottom out.
The first day the index closes higher counts as Day 1 of its rally attempt. Action on Day 2 and Day 3 is irrelevant as long as the index does not break below its latest low. If that low is lowered, the rally attempt is made and the market must try again.
On day 4 and beyond, you’re expecting the Nasdaq or S&P 500 to spike higher on volume than the previous session. That’s a follow-up day. It gives investors the green light to start buying leading stocks that are above the correct buy points. You should get your portfolio and mindset in sync with the stock market action by gradually committing capital to the leading stocks.
During the stock market correction, don’t tune out. Instead, create watchlists to find emerging stock market leadership using the line of relative strength. The RS line measures a stock’s price performance against the S&P 500. If the stock is outperforming the broader market, the RS line slopes up. If a stock is lagging the broader market, the line will point down.
Five Dow Jones Stocks to Watch Now
Dow Stocks to Watch: Chevron, Merck
Dow Jones shares Chevron fell 0.4% on Tuesday, still holding above crucial support around its 50-day line. The stock is trading about 6% below its last buying point at 166.93 for a cup with a handle, according to IBD MarketSmith chart analysis, amid strong performance by energy stocks so far this year. year. The stock was up 1.4% early Wednesday.
CVX stock shows a strong 97 out of a perfect IBD Composite Rating of 99, according to IBD Stock Check. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Pharmaceutical giant Merck is also trying to fight the downtrend in the stock market. Stocks are building a flat base with a buy point of 95.82, but are stuck below their 50-day line and near their recent lows. Merck shares rose 0.3% early Wednesday.
Top 3 Growth Stocks to Buy and Watch in the CurrCurrent Stock Market Correction
Top stocks to watch: Continental, DoubleVerify, Vertex
Oil explorer and producer Continental Resources is building a handle cup with a buy point of 72.80, according to IBD MarketSmith chart analysis. The relative strength line touched a recent high last week but remains a bit off its 52-week high. CLR shares rose 1.7% early Wednesday.
IBD leaderboard stock DoubleVerify remains below its buy point of 28.07 on a bottoming basis after Tuesday’s 1.35% loss. Shares of DV fell 0.4% on Wednesday morning.
Vertex Pharmaceuticals remains below its 50-day line despite Tuesday’s 0.6% gain. The stock has held up well during the current market weakness as indicated by an RS line approaching new highs. There is no new base yet, but the stock’s resiliency makes it a good idea to watch. Vertex shares rose 0.1% on Wednesday.
Join IBD experts as they discuss the top stocks in the current stock market correction on IBD Live
Shares of Tesla traded down a fraction on Tuesday as it approaches the buy point of 314.74 from a short basis. In the meantime, keep an eye out for additional buy points if the stock is able to rally higher on the right side of its major consolidation, which dates back to January. Shares were down 0.2% on Wednesday morning.
Bullishly, the stock’s RS line is at its highest level since April. Shares are about 25% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.6% on Tuesday, adding to Monday’s gain. Last week, the shares closed at their lowest level since July 18. Apple shares rose 0.5% on Wednesday morning.
Microsoft lost 0.85% on Tuesday, hitting another 52-week low. The software giant is down 30% from its 52-week high. Microsoft shares gained 0.7% early Wednesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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