Dow falls after Fed-fueled market sell-off; Increase in Treasury yields

The Dow Jones Industrial Average fell on Thursday, threatening to add to Wednesday’s Fed-fueled stock market selloff. Weekly jobless claims from the Labor Department came out before the open.

Darden Restaurants ( DRI ), along with homebuilders KB Home ( KBH ) and Lennar ( LEN ), were the main drivers of gains Thursday morning. A strong early move in Salesforce.com ( CRM ) supported the Dow, after the company stated a revenue target of $50 billion by 2026.

Shares of Darden Restaurants fell nearly 2%. Shares of KB Home fell nearly 3% and shares of Lennar rose 1% after the market opened. Salesforce rose more than 2%.

Block (SQ) declined nearly 2% after being downgraded from buy to neutral at Mizuho. Electric vehicle leader Tesla ( TSLA ) traded down 0.1% on Thursday. Among the Dow Jones industrials, tech titans Apple ( AAPL ) and Microsoft ( MSFT ) were modestly lower after the market opened today.

Top stocks to watch amid recent market weakness include Continental Resources ( CLR ), DoubleVerify ( DV ), Neurocrine Biosciences ( NBIX ), and Vertex Pharmaceuticals ( VRTX ), as well as Dow Jones stocks. Chevron (CVX). Note that the new stock market correction is a good reason for investors to be mostly, if not completely, on the sidelines.

DoubleVerify is an IBD-rated stock, but its position size shrank during last week’s losses. Tesla appeared in the Stocks column near a buy zone this week. Neurocrine was the stock pick to watch on Wednesday’s IBD 50.

Dow Jones today: Treasury yields, oil prices, jobless claims

After the opening bell on Thursday, the Dow Jones Industrial Average lost 0.6%, while the S&P 500 was down 0.8%. The tech-heavy Nasdaq Composite fell 1.15% in morning action.

Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 0.9% and the SPDR S&P 500 ETF ( SPY ) fell 0.7%.

The 10-year Treasury yield rose to 3.65% on Thursday, recovering from Wednesday’s decline. On Wednesday, the 10-year Treasury yield hit a new high of 3.62% before reversing the decline. Meanwhile, US oil prices appeared to be recovering after two days of losses. Oil prices rose more than 1%, pushing West Texas Intermediate futures above $84 a barrel.

Released early Thursday, first-time jobless claims came in at 213,000, below estimates that expected a rise to 220,000 from 213,000 the previous week.

Stock market correction

The stock market posted another disappointing performance on Wednesday as major stock indexes sold off after the Fed’s interest rate decision. The Dow Jones Industrial Average and the S&P 500 lost 1.7%, while the Nasdaq fell 1.8%.

Wednesday’s The Big Picture column commented that Fed Chairman Jerome Powell “made it abundantly clear that the Fed’s No. 1 job today is to focus on getting the long-term inflation rate to 2 % per annum. And it will be a long time before that. it could happen.”

To prepare for another rally in the stock market, investors should expect two things: an attempted rally and then a tracking day.

In a market correction, the first day the index closes higher counts as day 1 of its recovery attempt. The action on day 2 and day 3 is irrelevant as long as the index does not go below its last low. If this low is lowered, the recovery attempt is over and the market must try again. Wednesday’s action took off recent lows, so we’re looking for a 1 again.

On the 4th and beyond, you’re looking for the Nasdaq or S&P 500 to rise sharply on higher volume than the previous session. This is a tracking day. It gives investors the green light to start buying major stocks by beating the correct buy points. You should synchronize your portfolio and mindset with the action of the stock market, gradually committing capital to the leading stocks.

During the stock market correction, do not disconnect. Instead, create watch lists to find emerging stock market leadership using the relative strength line. The RS line measures the price performance of a stock compared to the S&P 500. If the stock outperforms the broader market, the RS line slopes upward. If a stock lags the broad market, the line will point lower.

Five Dow Jones Stocks to Watch Now

Dow Jones stocks to watch: Chevron

Shares of Dow Jones Chevron fell 0.8% on Wednesday, still barely above crucial support around its 50-day line. Shares are trading about 6% off their last buy point at 166.93 a cup with a handle, according to IBD MarketSmith chart analysis, amid a strong performance by energy stocks so far of year The stock rose 1.8% as oil prices rallied early Thursday.

CVX stock scores a strong 97 out of a perfect 99 IBD Composite Rating, according to IBD Stock Check. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics.

3 Most Important Growth Stocks to Buy and Watch in the Current Stock Market Correction

Top stocks to watch: Continental, DoubleVerify, Neurocrine, Vertex

Oil explorer and producer Continental Resources is building a cup with a handle with a buy point of 72.80, according to IBD MarketSmith chart analysis. The relative strength line hit a recent high last week, but remains just off its 52-week high. Shares of CLR were up 1.7% early Thursday.

Shares of IBD DoubleVerify Rating remain below their 28.07 buy point on a fund basis after Wednesday’s loss of 1.25%. DV shares were down 1.3% Thursday morning.

Wednesday’s IBD 50 Stocks To Watch pick, Neurocrine Biosciences, is building a flat base that has a 109.36 buy point. The stock’s RS line hit a new high on Wednesday, signifying a strong stock performance. Shares were down 1.5% on Thursday.

Vertex Pharmaceuticals fell further below its 50-day line after Wednesday’s 2.3% loss. The stock has held up well during the ongoing market weakness, as indicated by an RS line approaching new highs. A new flat base has a buy point at 306.05 and the stock’s resistance makes it an excellent idea to watch. Shares of Vertex fell 0.55% on Thursday.

Join IBD experts as they analyze the top stocks in the current stock market correction on IBD Live

Tesla stock

Shares of Tesla fell 2.6% on Wednesday as they continue to trade short of the 314.74 buy points of a short base. In the meantime, keep an eye out for additional buy points if the stock can rally further to the right of its largest consolidation dating back to January. Shares were down 0.1% Thursday morning.

Optimistically, the stock’s RS line is at its highest level since April. The stock is about 27% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 2% on Wednesday, snapping a two-day winning streak. Last week, the stock closed at its lowest level since July 18. Apple shares were down 0.5% Thursday morning.

Microsoft lost 1.4% on Wednesday, hitting another 52-week low. The software giant is roughly 32% off its 52-week high. Microsoft shares lost 0.1% early Thursday.

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