Dow Jones Rises on Cool Inflation Report, Weak Retail Sales; Tesla shares rise higher

The Dow Jones Industrial Average rose Wednesday morning after a cooler-than-expected wholesale inflation report in the form of the Labor Department’s Producer Price Index. And oil prices surged to a seven-week high as Tesla shares appeared to add to Tuesday’s gains and race higher in early morning trading.


The PPI fell 0.5% in December, the largest monthly decline since April 2020 and much larger than the expected 0.1% drop, according to Econoday estimates. Year over year, the PPI increased by 6.2%, less than the estimate of 6.8%.

Meanwhile, retail sales fell 1.1% in December, missing estimates predicting a 0.8% fall.

Interactive Brokers (IBKR) and United Airlines (UAL) reported earnings late Tuesday, while Karl Schwab (SCHW) earnings came out early Wednesday.

IBKR shares rose 5.9% in morning trading, breaking out past a double bottom of 80.95 buy points. United Airlines rose 3% after beating profit and sales targets. Schwab shares lost 3% after an earnings miss.

Fair today

Mobileye Global (MBLY) climbed 6% after Deutsche Bank began to cover with a buy rating and price target of 48. Dow Jones shares IBM (IBM) fell more than 2% after downgrading Morgan Stanley from overweight to equal weight, with a lowered price target of 148.

Biotech Moderna (MRNA) rose 4.7% after announcing late Tuesday that an experimental vaccine was found to be 84% effective against respiratory syncytial virus, or RSV, in older adults.

Leader of electric vehicles Tesla (TSLA) trimmed profits to 2% Wednesday as Chief Executive Elon Musk faces trial over his 2018 tweets that talked about taking the company private. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were both higher after today’s market open.

Deere (DE), IBD Leaderboard stock Fluorine (FLR), Insulation (PODD) and recent IBD Stock Of The Day Medtempo (MEDP) – as well as Dow Jones names Amgen (AMGN), Chevron (CVX) and walmart (WMT) — are among the best stocks to buy and watch as the market tests the strength of another rally.

Fluor and Medpace are IBD Leaderboard stocks.

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Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.2% and the S&P 500 rose 0.3%. And the tech-heavy Nasdaq composite gained 0.7%, with Moderna and Tesla topping the index in early trading.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.6% and the SPDR S&P 500 ETF (SPY) was up 0.4% early Wednesday.

The 10-year Treasury yield fell to 3.39% Wednesday morning, on pace to break a two-day profit streak.

Oil prices rose again on Wednesday, pushing West Texas Intermediate futures to $82 a barrel as the International Energy Agency said China’s reopening of the coronavirus will lead to record demand for oil. The gain of nearly 2% puts WTI futures at their highest level since early December. WTI is also moving further above its 50-day moving average, after breaking above that line on Tuesday for the first time since mid-November.

Stock market rally

On Tuesday, the Dow Jones Industrial Average sold 1.1% and the S&P 500 lost 0.2%. The Nasdaq composite rose 0.1%, extending a profit streak to seven sessions.

Tuesday’s The Big Picture column warned: “Major benchmarks, however, continue to struggle at or near major moving averages, and resolution may take some time. Best-case scenario: Instruments build bases for new support that act as springboards for strong price action in the second quarter.”

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: Amgen, Chevron, Walmart

Drug giant Amgen is shaping a flat base with a buy point of 296.77, according to IBD MarketSmith pattern recognition. First, Amgen stock needs to recapture its 50-day line, which is an important resistance level to watch. AMGN shares rose slightly higher early Wednesday.

Energy giant Chevron broke above firm resistance on its 50-day line during Tuesday’s 1.65% rally as it moves closer to the 189.78 buy point from a flat base. Chevron’s fourth quarter results are expected on January 27. CVX shares rose 0.5%, rising with oil prices.

CVX shares show a solid 93 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.

Discount retailer Walmart is also seeing resistance on its 50-day line amid Tuesday’s 0.6% loss. Stocks are building a cup-and-handle base with a buy point of 154.74. Walmart shares fell 0.3% Wednesday morning.

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

Top stocks to buy and watch: Deere, Fluor, Insulet, Medpace

Deere is approaching a buy point of 448.50 in flat basis. Stocks have their buying point in mind as they recover from a test of 50 days of support and are just 2% away from entry. Deere shares added 0.4% Wednesday morning.

IBD Leaderboard stock Fluor is trying to break out past the 36.16 buy point from a flat base, but the shares gave up their buy point during Tuesday’s 3.4% decline. If stocks recapture that access, the 5% buy territory comes in at 37.97. FLR shares gained 0.1% on Wednesday.

The recent IBD stock of the day, Insulet, is approaching a double bottom of 316.54 buy points despite Tuesday’s drop of 2.3%. PODD stock was unchanged on Wednesday.

Medpace moved slightly higher on Wednesday, moving closer to the 235.82 buy point of a consolidation. Last week, shares rose above an early entry at 220.09. The company’s earnings results are expected on February 13. Medpace shares rose 1% on Tuesday.

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
Deere (THE) 448.50 Flat base
Fluorine (FLR) 36.16 Flat base
Insulation (PODD) 316.54 Double bottom
Medtempo (MEDP) 235.82 Consolidation
Amgen (AMGN) 296.77 Flat base
Chevron (CVX) 189.78 Cup base
walmart (WMT) 154.74 Cup with handle
Source: IBD data as of January 18, 2023

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

Tesla stock

Tesla shares rose 7.4% on Tuesday to close at their highest level since Dec. 21. Despite their recent recovery, stocks remain sharply below their 50- and 200-day lines. In early January, shares hit a 52-week low of 101.81. Tesla shares closed about 66% from a 52-week high on Friday. Tesla earnings are expected on January 25.

Shares of the EV giant looked at Tuesday’s gains and rose 2% on Wednesday morning.

Dow Jones leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.9% on Tuesday to close at their highest level since Dec. 15. The stock remains about 24% off its 52-week high. Apple will publish its quarterly results on February 2. AAPL shares rose 0.8% on Wednesday.

Microsoft shares rose another 0.5% on Tuesday, extending a win streak to seven trading days. The software giant is about 25% off its 52-week peak. MSFT earnings are expected on January 24. Shares traded 0.4% higher early Wednesday.

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


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