The Dow Jones Industrial Average sold off 350 points Monday after a host of November economic data, including the PMI composite, the ISM services index and factory orders. China stocks resumed their rebound on a shift in domestic Covid policy. Tesla stock skidded more than 5% after Bloomberg reported that the electric-vehicle maker plans to cut production at its Shanghai plant.
Economic Data, Upcoming Earnings Reports
The Markit/S&P Global U.S. services Purchasing Managers’ index, or PMI, stayed in a contraction for November, with a 46.2 reading for the month, up slightly from the initial mid-month estimate. The services PMI from the Institute for Supply Management showed continued expansion, up to 56.5 in November from 54.4 in October.
Lastly, factory orders data from the Commerce Department jumped 1% for October, beating the 0.7% estimate and up from September’s 0.4% rise.
Companies that report earnings this week include Academy Sports + Outdoors (ASO), AutoZone (AZO), Broadcom (AVGO), Ciena (CIEN), Lululemon Athletica (LULU), Ollie’s Bargain Outlet (OLLI) and Toll Brothers (TOL).
Celsius (CELH), Chubb (CB), IBD Leaderboard stock Dexcom (DXCM) and Lattice Semiconductors (LSCC) — as well as Dow Jones names Boeing (BA), Caterpillar (CAT) and Chevron (CVX) — are among the top stocks to buy and watch.
Dexcom is an IBD Leaderboard stock. Boeing is an IBD SwingTrader stock and was one of the four leaders featured in last week’s Stocks Near A Buy Zone column. Celsius was a recent IBD 50 Stocks To Watch pick and a New America stock. Caterpillar was Thursday’s Stock Of The Day.
Dow Jones Today: Oil Prices, Treasury Yields
After Monday’s opening bell, the Dow Jones Industrial Average lost 1%, while the S&P 500 dropped 1.1%. The tech-heavy Nasdaq composite moved down 1% in morning action.
The 10-year Treasury yield ticked higher to 3.52% Monday morning, on pace to snap a three-day losing streak. Last week, the 10-year Treasury yield tumbled to 3.5%, its lowest level since mid-September. Investors place a 78% likelihood, up from 75% one week ago, of a 50-basis-point rate hike at this month’s Federal Reserve meeting, according to the CME FedWatch Tool.
Meanwhile, U.S. oil prices added more than 3%, after posting their first weekly advance in a month. West Texas Intermediate futures traded just below $82 a barrel after the European Union sanctions on Russian crude oil went into full effect. Oil prices also received a boost from loosening China Covid restrictions, a move that could potentially increase demand.
Stock Market Rally
On Friday, the stock market posted mixed action, as the tech-heavy Nasdaq composite lost 0.2%. The Dow Jones Industrial Average rose 0.1%, while the S&P 500 edged lower.
Friday’s The Big Picture commented, “The S&P 500 ended Friday down just 0.1%, well off lows for the day. It turned in a solid weekly gain of 1.1%, holding above the 200-day moving average, after retaking the key level earlier in the week. Overall price action was encouraging, suggesting additional upside into year’s end.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.
Dow Jones Stocks To Buy And Watch: Boeing, Caterpillar, Chevron
Aerospace giant Boeing jumped 4% Friday, ending just out of buy range beyond a cup base’s 173.95 buy point. The 5% buy area went up to 182.65. Boeing shares fell 1% Monday.
Energy giant Chevron slipped 0.8% Friday, ending a touch below a 182.50 buy point in a consolidation base. CVX shares rose 0.9% Monday morning, as oil prices rose.
Top Stocks To Buy And Watch: Celsius, Chubb, Dexcom, Lattice
Energy-drink maker Celsius rallied for a third straight day, climbing 3.7% Friday and breaking out past a cup base’s 118.29 buy point. Shares ended just below the entry. The stock was down 0.5% Monday.
Chubb moved further above a cup-with-handle’s 216.10 buy point Friday after the session’s 0.4% rise. The 5% buy area tops out at 226.91. The insurance giant traded down 0.7% Monday morning.
Lattice Semiconductors remains in buy range past a 70.25 buy point, according to IBD MarketSmith chart analysis. Lattice stock lost 0.7% Monday.
Tesla stock rose 0.1% Friday, rising for a third straight session. Despite the recent gains, shares remain more than 50% off their 52-week high. Meanwhile, the stock is approaching its 50-day line, which is a key resistance level to watch.
Shares skidded more than 5% Monday morning after Bloomberg reported that Tesla plans to cut production at its Shanghai plant by about 20% in December due to slowing demand in China. Meanwhile, the China Passenger Car Association reported that Tesla’s deliveries in that nation hit a record in November, at 100,291.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares pared losses to 0.3% Friday, but still ended a two-day win streak. Shares are holding just above their recently captured 50-day line. The stock is around 20% off its 52-week high. Apple stock traded up 0.5% Monday.
Microsoft inched up 0.1% Friday, at its highest level since Sept. 13. The software giant remains about 26% off its 52-week high. Microsoft shares fell 0.8% Monday morning.
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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