Dow Jones futures dropped 160 points Wednesday morning, as retailers Gap and Nordstrom plummeted on disappointing third-quarter results. Tesla stock threatened to add to Tuesday’s sell-off.
Among the Dow Jones leaders, Apple (AAPL) traded down 0.3% in Wednesday’s premarket action, while Microsoft (MSFT) moved down 0.4% in today’s stock market. Nike (NKE) is back below a recent buy point after another breakout attempt.
Electric-vehicle leader Tesla (TSLA) lost nearly 3% premarket Wednesday. EV peer Rivian (RIVN) fell less than 1%, while Lucid Motors (LCID) was virtually unchanged. Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) are near buy points.
Dow Jones Today: Fed Minutes, Jobless Claims
Ahead of the stock market open Wednesday, Dow Jones futures dropped 0.5% vs. fair value, while S&P 500 futures fell 0.5%. Nasdaq 100 futures declined 0.7%. Remember that premarket action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading performance in the next regular stock market session.
On Tuesday, the 10-year Treasury yield added to Monday’s sharp rise, closing above 1.66% for the first time since Oct. 21. The yield rose again early Wednesday, trading near 1.68%.
Markets will close on Thursday for the Thanksgiving Day holiday, and will run a short session on Friday, closing at 1 p.m. ET. The schedule change has the market positioning for a heavy day of economic reports on Wednesday, including third-quarter GDP, October durable goods orders, new home sales, and consumer spending and sentiment.
The Labor Department said weekly jobless claims fell to 199,000 — their lowest level since 1969 — handily topping Econoday estimates that expected initial unemployment claims to fall to 264,000 from last week’s 268,000.
In addition, minutes from the Federal Reserve’s November meeting are due out at 2 p.m. ET. The minutes should provide insight into the central bank’s plans for interest rates and tapering. Investors increasingly expect the Fed to tighten monetary policy in the near future.
Stock Market Rally
The stock market put in another mixed performance Tuesday, as the Nasdaq fell with moderate losses. The Dow Jones Industrial Average and S&P 500 logged modest gains.
On Tuesday, The Big Picture commented, “One need only look at the damage seen in enterprise software firms including Asana (ASAN) — a longtime stalwart member of the IBD 50 — CrowdStrike (CRWD), Atlassian (TEAM), Monday.com (MNDY) and Palantir Technologies (PLTR) lately to understand how quickly top growth stocks can surrender gains. All five stocks have crossed below their key 50-day moving averages, a sign of sudden weakness and a potential sign of a serious change in character.”
For daily stock market commentary, be sure to check out IBD’s The Big Picture.
Dow Jones Stocks To Buy And Watch: Apple, Nike
IBD SwingTrader stock Apple is barely extended past a 153.27 buy point out of a cup with handle, according to IBD MarketSmith chart analysis, following eight straight up days. The 5% buy zone tops out at 160.93. Shares lost 0.3% Wednesday morning.
Dow Jones retail leader Nike bullishly regained its cup base’s 174.48 buy point amid Friday’s 2.1% rally. But shares gave up that buy point on Monday and fell further below the entry during Tuesday’s 2% decline. NKE shares fell another over 1% premarket Wednesday.
Nike canceled orders to at least one retail store until summer 2022 due to supply chain issues.
Stock Market Earnings: Autodesk, Deere, Gap, Nordstrom
Deere (DE) rallied nearly 3% premarket after the company beat the Street’s earnings and sales targets early Wednesday. Shares are tracing a new base with a 393.10 buy point.
Retailer Gap (GPS) crumbled 20% premarket Wednesday after the company reported weak third-quarter results and cut its full-year guidance due to significant supply-chain constraints. Gap shares closed Tuesday about 38% off their 52-week high.
Nordstrom (JWN) sold off 26% Wednesday morning after the retailer missed third-quarter sales estimates.
Stocks To Buy And Watch: Amazon, Nucor, Pioneer
The stock’s relative strength line is coming sharply off recent lows after November’s gains, but it is well below its July high. That indicates underperformance vs. the S&P 500 over a longer time frame. Ideally, the RS line should hit a new high on the breakout day or shortly thereafter to confirm the stock as a market leader.
IBD Leaderboard stock Nucor is trying to break out past a 119.42 buy point out of a cup with handle on the heels of Monday’s 6% advance. Leaderboard noted that the price action warranted a boost from a quarter-size position to a half. The steelmaker was flat premarket Wednesday.
Tuesday’s IBD Stock OF The Day, Pioneer Natural Resources, is rapidly approaching a flat base’s 196.74 buy point. The stock flashed an early entry, as it rebounded from its key 50-day line. Shares traded flat ahead of Wednesday’s open.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to build a cup-with-handle base that shows a 34.93 buy point, as shares rose nearly 2% Tuesday. The stock rose 0.2% premarket Wednesday.
Xpeng Motors is extended past its 48.08 buy point in a choppy cup base following Tuesday’s earnings-fueled 8.25% rally. XPEV shares rallied another 2% premarket Wednesday.
Hot initial public offering Rivian lost about 1% premarket Wednesday following Tuesday’s 1.5% gain.
RIVN shares closed Tuesday about 33% off their post-IPO highs. The decline is a potential positive for investors remaining disciplined and waiting for an IPO base to form before considering a purchase. The recent weakness could be the start of Rivian’s first base formation, but last week’s price action was not constructive given the huge downside reversal and high volatility.
Tesla stock dropped almost 3% premarket Wednesday, threatening to add to Tuesday’s 4.1% sell-off.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Tuesday about 11% off its 52-week high. TSLA shares remain sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730. The chart also showed an alternate entry at 900.50.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved down 0.4% premarket Wednesday, threatening to extend a losing streak to three sessions.
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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