The Dow Jones Industrial Average rose Tuesday amid Fed Chair Jerome Powell’s comments. Meanwhile, aerospace giant Boeing (BA) slid after a Morgan Stanley downgrade.


Powell Comments, Earnings Results

Powell appeared at the Sveriges Riksbank International Symposium on Central Bank Independence in Stockholm. The central bank is strongly committed to reducing inflation even though interest-rate increases to restrain economic growth could fuel political blowback, commented Powell in prepared remarks.

Powell’s prepared remarks didn’t comment on the Federal Reserve’s upcoming interest-rate decisions, but instead emphasized the importance of central bank independence without political interference.

Powell’s speech comes on the heels of comments from Atlanta Federal Reserve President Raphael Bostic and San Francisco Fed President Mary Daly that tripped up markets on Monday. Daly and Bostic each pointed to Fed rate hike increases to somewhere above 5%.

Powell’s comments also follow Friday’s jobs report, which saw wage growth cooling much more than expected and workers clocking fewer hours for a second straight month. The data should allow the Fed to further slow its pace of interest-rate hikes.

Late Monday, Jefferies (JEF) reported earnings that met estimates, and sales that topped forecasts. Jefferies shares lost more than 1% in morning trade. Albertsons (ACI) climbed 1% after an earnings beat. Bed Bath & Beyond (BBBY) jumped 12% in morning trade after missing estimates for its fiscal third quarter.

Other companies reporting later this week include KB Home (KBH), Taiwan Semiconductor Manufacturing (TSM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC).

Dow Jones aerospace leader Boeing dropped 2.2% after Morgan Stanley downgraded the stock from overweight to equal weight. Royal Caribbean (RCL) rose 1% after Morgan Stanley upgraded the cruise operator from underweight to equal weight. Finally, AT&T (T) gained 1.4%, as Wells Fargo upgraded the stock from equal weight to overweight.

Electric-vehicle leader Tesla reversed more than 1% lower Tuesday, amid reports the automaker delivered more than 10,000 vehicles in a single day on Friday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were both higher after today’s stock market open.

Deere (DE), IBD Leaderboard stock ELF Beauty (ELF), Rio Tinto (RIO) and Super Micro Computer (SMCI) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Walmart (WMT) — are among the top stocks to buy and watch with the market back in rally mode.

ELF Beauty is an IBD Leaderboard stock. Caterpillar and Rio were featured in this week’s recent Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Tuesday’s opening bell, the Dow Jones Industrial Average rose 0.2%, while the S&P 500 gained 0.15%. And the tech-heavy Nasdaq composite moved up 0.25% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.2% and the SPDR S&P 500 ETF (SPY) traded up 0.15% early Tuesday.

The 10-year Treasury yield ticked higher to 3.58% Tuesday morning, looking to snap a two-day losing streak.

Meanwhile, oil prices headed for a third straight advance, recovering to around the midpoint of their recent trading range. West Texas Intermediate futures rose less than 1%, trading around $75 a barrel.

Stock Market Rally

On Monday, the Dow Jones Industrial Average closed down 0.3% after giving up solid gains, and the S&P 500 lost 0.1%. The Nasdaq composite pared strong gains to 0.6%.

Monday’s The Big Picture column commented, “If this stock market uptrend is for real, investing opportunities will appear for weeks or months. Thus, there’s no need to rush. With any buys, start with half your intended investment. If the stock continues rising, add more while trying to complete your buys before shares are more than 5% above the buy point.”

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, Walmart

Dow Jones member Caterpillar closed squarely in buy range above a flat base’s 239.95 buy point following Monday’s 3.6% advance, according to IBD MarketSmith pattern recognition. The buy zone, which CAT shares have dodged in and out of since Dec. 21, goes up to 251.95. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. Shares were down 0.3% Tuesday.

CAT stock shows a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Energy giant Chevron is trying to retake its 50-day line, as it continues to build a cup base that has a 189.78 buy point. CVX shares gained 0.8% Tuesday morning, despite the modest rise in oil prices.

Discount retailer Walmart bullishly reclaimed its 50-day line during Friday’s 2.45% jump. It then un-bullishly gave back that support on Monday. Shares are building a cup-with-handle base that has a 154.74 buy point and are about 5% away from the latest entry. Walmart shares edged higher Tuesday morning.

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

Top Stocks To Buy And Watch: Deere, ELF Beauty, Rio, Super Micro

Recent IBD Stock Of The Day, Deere, is building a flat base with a 448.50 buy point. Shares have their eye on the buy point as they rebound from a test of 50-day support. Deere shares lost 0.1% Tuesday morning.

IBD Leaderboard stock ELF Beauty gave up its 57.03 flat-base entry amid Monday’s sharp decline. Shares broke out Friday in big volume, indicating strong institutional demand for the cosmetics leader. The 5% buy zone tops out at 59.88 if the stock is able to regain the buy point. ELF stock declined 0.8% Tuesday.

Recent IBD Stock Of The Day Rio Tinto rose 0.1% Monday, moving further above a cup with handle’s 73.45 buy point. The buy area runs up to 77.13. Rio shares traded up 1% Tuesday.

Super Micro Computer is rapidly moving up the right side of a short consolidation that has a 95.32 buy point. But SMCI stock dived 7% Tuesday morning after Spruce Point Management issued a short report.

Stocks To Buy And Watch In New Stock Market Rally

These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Base
Deere (DE) 448.50 Flat base
ELF Beauty (ELF) 57.03 Flat base
Rio Tinto (RIO) 73.45 Cup with handle
Super Micro Computer (SMCI) 95.32 Consolidation
Caterpillar (CAT) 239.95 Flat base
Chevron (CVX) 189.78 Cup base
Walmart (WMT) 154.74 Cup with handle
Source: IBD Data As Of Jan. 10, 2023

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Tesla Stock

Tesla stock surged nearly 6% Monday, adding to Friday’s upside reversal. Shares remain sharply below their 50- and 200-day lines. Last week, shares hit a 52-week low at 101.81. Tesla stock closed Monday about 68% off its 52-week high.

Shares of the EV giant looked to extend a two-day win streak, but reversed more than 1% lower Tuesday morning.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares climbed 0.4% Monday. Last week, the stock hit a new 52-week low price of 124.17. The stock remains around 20% off its 52-week high. AAPL stock moved up 0.2% Tuesday.

Microsoft stock rallied 1% Monday, adding to Friday’s gains. The software giant is about 30% off its 52-week high and is still just off its 52-week low of 213.43, reached on Nov. 4. Microsoft shares rose 1% early Tuesday.

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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