Dow Jones futures briefly sold off more than 300 points Friday morning after the Labor Department’s stronger-than-expected September jobs report. Advanced Micro Devices (AMD) dived nearly 6% and triggered an early sell off among chip stocks, issuing weaker-than-expected preliminary third-quarter revenue results late Thursday.
AMD warned that the weakness was a combination of a “weaker than expected PC market and significant inventory correction actions across the PC supply chain.” Meanwhile, Taiwan Semiconductor Manufacturing (TSM) reported higher-than-expected quarterly revenue. But shares were still down about 2.5%.
Stock Market Today: Jobs Report
September’s jobs report came out ahead of Friday’s open, at 8:30 a.m. ET. The U.S. economy grew by 263,000 jobs in September, topping Econoday estimates that called for job growth of 250,000. The unemployment rate fell to 3.5%, lower than the 3.7% estimate.
Aehr Test Systems (AEHR) countered the early chip-sector action. It beat Wall Street’s estimates for its fiscal first quarter and kept its robust growth targets for the full year. Shares surged more than 10% in premarket trade.
Lyft (LYFT) slid more than 1% after RBC downgraded the stock from outperform to sector perform with a price target of 16, down from 30. Twitter (TWTR) declined 1% Friday morning, as a judge ruled that Elon Musk must complete his $44 billion Twitter deal by Oct. 28, or else face a November trial.
Electric-vehicle leader Tesla (TSLA) traded 1% lower Friday. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were both modestly lower ahead of today’s stock market open.
As the stock market continues to wait for a trend-change day, Cummins (CMI), Murphy USA (MUSA), Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Amid this week’s volatility, the market’s status remains “in correction,” and investors should remain on the defensive.
Vertex is a recent addition to IBD Leaderboard. Cummins is an IBD SwingTrader stock. Murphy USA was featured in this week’s Stock Near A Buy Zone column, along with three other top stock ideas. World Wrestling was a Stock Of The Day on Sept. 29. Neurocrine was a Stock Of The Day on Sept. 26.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Friday’s opening bell, Dow Jones futures dropped 0.8% vs. fair value, while S&P 500 futures lost 1.1%. Nasdaq 100 futures tumbled 1.65%, with AMD, Nvidia (NVDA), Intel (INTC) and ASML (ASML) leading the declines.
Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was down 1.7%, and the SPDR S&P 500 ETF (SPY) fell 1.2%.
The 10-year Treasury yield ticked higher to 3.88% Friday morning. The 10-year Treasury yield fell as low as 3.56% this week before rebounding. Last week, the 10-year Treasury yield briefly topped 4%, which hadn’t been done for more than decade.
Meanwhile, U.S. oil prices continued this week’s rebound, rising more than 1% Friday. West Texas Intermediate futures climbed near $90 a barrel. Last week, oil fell to its lowest level of the year — around $76 a barrel — before rebounding.
Stock Market Rally Attempt
On Thursday, the Dow Jones Industrial Average declined 1.1%, while the S&P 500 closed down 1%. The Nasdaq composite lost 0.7%, and the small-cap Russell 2000 fell 0.6%. The S&P 500 and Nasdaq remain above their latest lows, so their rally attempts remains intact.
Monday’s market advance kicked off a new rally attempt, which was your Day 1. If the major indexes undercut their Sept. 30 lows, however, that would snuff the rally attempt and leave the market still searching for a bottom.
Thursday’s The Big Picture commented, “Thursday was Day 4 of the stock market’s rally attempt, so investors are now patiently awaiting a follow-through day, which will signify the beginning of a new uptrend. Be mindful that not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the uptrend proves itself.”
Now, ahead of a potential follow-through day, is the perfect time to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market bottoming signal. Missing that early opportunity can be a costly mistake.
One challenge to forming a watchlist during a correction is that, as you wait for a follow-through day, stock charts may change. That means some bases among your watchlist stocks may deteriorate. So updating is important.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: UnitedHealth
Dow Jones stock UnitedHealth declined 1.5% Thursday, snapping a three-day win streak and running into resistance at the key 50-day line. Shares are building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. UNH stock inched higher Friday morning.
UNH stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics. UnitedHealth reports its third-quarter results on Oct. 14.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Cummins, Murphy USA, Neurocrine, Vertex, WWE
Cummins is moving rapidly up the right side of a cup base that has a 233.95 buy point. Shares reclaimed their 50-day line this week in heavy volume, a positive sign. The company’s upcoming earnings results are Nov. 4. Cummins stock was inactive Friday morning.
Gas station and mini-market leader Murphy USA is building a flat base with a 303.19 buy point. Shares declined 1.5% Thursday, continuing lower after Tuesday’s bearish reversal. The stock is finding stout resistance at its 50-day line. A decisive retake of this level would be bullish for the stock’s base-building prospects. Q3 earnings results are due out Oct. 26. Shares were flat Friday.
Neurocrine Biosciences is in the 5% buy area past a flat base’s 109.36 buy point, according to IBD MarketSmith chart analysis. The RS line hit a new high Thursday, a bullish signal. Shares were unchanged early Friday.
IBD Leaderboard stock Vertex Pharmaceuticals is rapidly approaching a flat base’s 306.05 buy point and above an early entry at 296.24. While the weak market status may keep you on the sidelines, the stock’s resilience makes it a top idea to watch. Its RS line is just off new highs, a potential sign of big stock market outperformance. VRTX stock added 0.5% Friday.
World Wrestling Entertainment is trying to break out past a cup base’s 75.33 entry, but closed about 3% below the entry following Thursday’s 0.7% decline. The RS line hit a new high this week. WWE shares jumped 3.3% Friday.
Join IBD experts as they analyze leading stocks in the current stock market rally attempt on IBD Live
Tesla stock fell 1.1% Thursday, closing at its lowest level since July 13. Shares declined 1% Friday morning, as CEO Musk tweeted, “Excited to announce start of production of Tesla Semi Truck with deliveries to @Pepsi on Dec 1st!.” He added, “500 mile range & super fun to drive.”
Shares are about 40% off their 52-week high and sharply below their 50- and 200-day lines. The EV giant’s Q3 results are Oct. 19.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 0.7% Thursday, ending a three-day win streak. Shares are still about 21% off their 52-week high and below their 50- and 200-day lines. Third-quarter earnings results are Oct. 27. Apple stock fell 0.5% Friday morning.
Microsoft dropped 1% Thursday, snapping a three-day win streak. Shares are still rebounding from last week’s 52-week low price. The software giant remains about 30% off its 52-week high. Microsoft shares slipped 0.4% early Friday.
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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