The Dow Jones Industrial Average reversed slightly higher Tuesday amid key economic data, including a consumer confidence reading and two home price indexes. Warren Buffett stock Occidental Petroleum (OXY) rallied on an analyst upgrade, while Chinese e-commerce giant Alibaba (BABA) jumped on a massive restructuring plan.
The Consumer Confidence Index to rose 104.2, topping Wall Street’s estimates for a 101.0 reading in March, down slightly from February’s 102.9 reading. The Case-Shiller Home Price Index rose 2.5% in January, less than the expected 3.7% rise vs. December’s 4.6% rise. Further, the FHFA House Price index rose 0.2% compared to the expected fall of 0.2% for January.
Walgreens Boots Alliance (WBA) rose nearly 2% Tuesday after the company’s fiscal second-quarter results topped earnings and sales estimates.
Stock Market Today: Warren Buffett Stock Jumps
Warren Buffett stock Occidental Petroleum rallied 3.5% after TD Cowen upgraded the stock to outperform, with a 70 price target. Late Monday, Securities and Exchange Commission filings showed that Buffett’s Berkshire Hathaway (BRKB) boosted its stake by 3.66 million shares between March 23 and March 27.
Alibaba, China’s equivalent of Amazon.com (AMZN), surged nearly 11% on plans to split its business into six independently run entities. The move constitutes the biggest structural overhaul in Alibaba’s history.
Align Technology (ALGN), IBD SwingTrader stock Meta Platforms (META) and IBD Leaderboard Palo Alto Networks (PANW) — as well as Dow Jones stocks Cisco Systems (CSCO) and Nike (NKE) — are among the top stocks to watch in the ongoing stock market correction.
Palo Alto is an IBD Leaderboard stock. Cisco was featured in this week’s Stocks Near A Buy Zone column. And Meta is an IBD SwingTrader stock. Palo Alto, Align, Microsoft and Meta were all recent IBD Stock Of The Day subjects.
Dow Jones Today: Oil Prices, Treasury Yields
After Tuesday’s opening bell, the Dow Jones Industrial Average rose 0.2%, while the S&P 500 moved down 0.1%. The tech-heavy Nasdaq composite was down 0.5% in morning action.
The 10-year U.S. Treasury yield on Monday jumped to 3.52%, snapping a three-day losing streak. Last week, the 10-year yield briefly touched its lowest level since mid-September. On Tuesday, the 10-year ticked higher to 3.56%.
U.S. oil prices continued higher Tuesday after Monday’s sharp gains, as West Texas Intermediate futures traded above $73 a barrel.
Stock Market Correction
On Monday, the Dow Jones Industrial Average climbed 0.6%. The S&P 500 reduced its gain to 0.2%. And the Nasdaq trailed with a 0.5% decline as techs lagged.
Monday’s Big Picture column commented, “The Nasdaq and S&P 500 continue with a rally attempt that started about two weeks ago. But so far there’s been no follow-through signal to confirm a new uptrend. That’s left the stock market in an ambiguous spot, making tentative progress only to bump up against sellers.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market correction.
Dow Jones Stocks To Watch: Cisco Systems, Nike
Cisco Systems is approaching a flat base‘s 51.84 buy point, according to IBD MarketSmith pattern recognition. Bullishly, the stock’s relative strength line hit a new high last week, a sign of stock market outperformance. CSCO stock fell 0.4% Tuesday morning.
Nike shares continue to trace a flat base that has a 131.41 buy point. The stock failed to hold above its 50-day line last week, meeting resistance. NKE stock moved 0.1% Tuesday.
Top Stocks To Watch: Align, Meta, Palo Alto
Align Technology continues to trace a consolidation that has multiple buy points: a 357.10 early entry and a conventional entry at 368.97. ALGN stock is looking for support around its 50-day moving average. If the stock breaches this level, then further weakness would be expected. ALGN stock was up 0.2% Tuesday morning.
Backstory: The company makes clear teeth-straightening systems called Invisalign. UBS analyst Kevin Caliendo says investors recently regained confidence in Align stock, which has surged 50% this year. December-ended quarter results from Align and its competitors, management commentary, U.S. economic data and a recent uptick in demand for Invisalign cases support this view, he said in a note to clients.
Backstory: Like social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as clients squirm over macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions of dollars on a risky bet to build the “metaverse,” a virtual reality world that has yet to take hold.
IBD Leaderboard stock Palo Alto Networks continues to trade above and below its 192.94 buy point out of a cup with handle amid Monday’s 0.5% move higher. The buy area will run up to 202.59 if the stock retakes the entry. PANW stock was down 0.6% Tuesday.
Backstory: Through acquisitions, Palo Alto Networks has expanded into endpoint security and vulnerability management. Endpoint tools detect malware on laptops, mobile phones and other devices that access corporate networks.
Stocks To Watch In Stock Market Correction
These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|Meta Platforms||(META)||197.26||Flat base|
|Palo Alto Networks||(PANW)||192.94||Cup with handle|
|Cisco Systems||(CSCO)||51.84||Flat base|
Source: IBD Data As Of March 27, 2023
Tesla stock climbed 0.7% Monday, as it continues to see some support around its 50-day moving average line. Shares closed Monday around 50% off their 52-week high. TSLA stock moved down 1.5% Tuesday morning.
On Tuesday, weekly China electric-vehicle insurance registration data could be an important gauge for Tesla demand in the world’s largest EV market, which is in the midst of a huge price war started by Tesla.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares declined 1.2% Monday, ending a two-day win streak. Shares remain near their recent highs. AAPL stock moved down 0.6% Tuesday.
Microsoft shares are again trying to capture a flat base’s 276.86 buy point, but closed back below the entry during Monday’s 1.5% loss. The stock is just below the 5% buy area that goes up to 290.70. And shares fell 1.1% early Tuesday.
Microsoft shares surged earlier this month after the company announced that it is adding artificial intelligence tools to its popular Office productivity applications. That follows the company’s investments in AI startup OpenAI, the firm behind the buzz-worthy ChatGPT application.
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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