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Dow Jones Reverses On Weak ADP Jobs Data; Stock Plunges 12% After Short-Seller Letter

The Dow Jones Industrial Average reversed higher Wednesday after ADP’s employment report fell short of estimates. Meanwhile, artificial intelligence stock (AI) plunged another 12% after Tuesday’s short-seller letter. And FedEx and Johnson & Johnson were early gainers.


On Tuesday, crashed 26% after after Kerrisdale Capital said it sent a letter to the software maker’s auditor, Deloitte, regarding “serious accounting and disclosure issues.” Kerrisdale Capital disclosed a short position in AI stock last week.

On the earnings front, Conagra (CAG), Schnitzer Steel (SCHN) and Simply Good Foods (SMPL) were on the move Wednesday.

Conagra shares rose 1% in morning action, while Schnitzer Steel fell 6%. Simply Good Foods tumbled nearly 6%.

Stock Market Today

FedEx (FDX) advanced 2.3% after hiking its dividend by 10% and reorganizing various divisions. FDX stock is moving out of a buy zone.

Johnson & Johnson (JNJ) rallied more than 3% after proposing to pay around $9 billion to settle claims that its talcum powder causes cancer.

Electric-vehicle giant Tesla (TSLA) moved down 2.8% Wednesday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after today’s stock market open.

IBD Leaderboard stock Axon Enterprise (AXON), ServiceNow (NOW) and Southern Copper (SCCO) — as well as Dow Jones stocks Boeing (BA), Cisco Systems (CSCO) and Nike (NKE) — are among the top stocks to buy and watch with the ongoing market strength.

Boeing was featured in this week’s Stocks Near A Buy Zone column. Axon, Skyline and Microsoft were all recent IBD Stock Of The Day subjects.

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Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.15%, while the S&P 500 moved down 0.3%. The tech-heavy Nasdaq composite fell 0.9% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) tilted 0.8% lower, while the SPDR S&P 500 ETF (SPY) dipped 0.3% early Wednesday.

The 10-year U.S. Treasury yield on Wednesday ticked lower to 3.3%. On Tuesday, the 10-year yield closed at its lowest level since mid-September.

U.S. oil prices paused after this week’s already-big gains, trading slightly higher in early morning trade. West Texas Intermediate futures traded just below $81 a barrel.

Stock Market Rally

On Tuesday, the Dow Jones Industrial Average and the S&P 500 dropped 0.6% apiece, while the tech-heavy Nasdaq composite lost 0.5%.

Tuesday’s Big Picture column commented, “Investors seemed to flee risk assets in favor of hiding out in treasuries. The 10-year yield dived 9 basis points to 3.34% while the two-year yield plunged 16 basis points to 3.82%. The yield curve, often an indicator of a recession, remains inverted.”

Now is an important time to read IBD’s The Big Picture column with the stock market in an uptrend.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Boeing, Cisco Systems, Nike

Dow Jones leader Boeing is nearing a flat base’s 221.43 buy point, according to IBD MarketSmith pattern recognition. Shares fell 0.7% Tuesday, snapping a six-day win streak and closing just 3% away from the latest entry. BA stock fell 0.5% early Wednesday.

Cisco Systems broke out past a flat base’s 51.84 buy point during last week’s advance. Bullishly, the stock’s relative strength line hit a new high in recent weeks, a sign of market outperformance. Shares rose 0.3% Wednesday.

Nike shares regained their 50-day line during Tuesday’s 1.7% rise, as they continue to trace a flat base that has a 131.41 buy point. An early entry at 126.16 is also in play. NKE stock moved down 0.7% Wednesday.

4 Top Growth Stocks To Watch In The Stock Market Rally

Top Stocks To Buy And Watch: Axon, ServiceNow, Southern Copper

IBD Leaderboard stock Axon closed back below a 226.10 buy point Tuesday in a short consolidation with a 1.9% drop. Meanwhile, it remains above an early entry at 221.79, above the March 21 high. AXON stock was down 0.3% Wednesday.

Backstory: Axon’s products are considered key for law enforcement, helping to build public trust. Meanwhile, its cloud-based software for managing police evidence, records and communications is geared to make officers more productive.

One key metric gives an idea of how indispensable police departments see its Axon contracts. In the fourth quarter, Axon saw 121% net revenue retention. That means expanded contracts far more than offset minimal customer attrition.

IBD SwingTrader pick ServiceNow moved further up the right side of a cup base with 494.72 buy point. Keep an eye out for a potential handle to offer a lower entry. NOW stock fell 0.1% early Wednesday.

Backstory: NOW software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables workers to access administrative and workflow tools.

In the latest quarter, the Santa Clara, Calif-based enterprise software maker said earnings jumped 56% to $2.28 per adjusted share. Revenue climbed 20% to $1.94 billion.

Southern Copper remains just 5% away from a double-bottom’s 78.75 buy point after Tuesday’s 3.15% drop. SCCO stock was down 1% Wednesday morning.

Backstory: Southern Copper engages in the development, production and exploration of copper, zinc, silver and other minerals and metals. It has operations in Peru and Mexico. The company trades on the New York Stock Exchange and the Lima Stock Exchange. A bet on copper is a bet on a stronger global economy as well as green energy. Copper is used heavily in renewable energy projects and electric vehicles.

Learn How To Time The Market With IBD’s ETF Market Strategy

Stocks To Buy And Watch In Stock Market Rally

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
ServiceNow (NOW) 494.72 Cup base
Nike (NKE) 131.41 Flat base
Axon Enterprise (AXON) 226.10 Consolidation
Cisco Systems (CSCO) 51.84 Flat base
Source: IBD Data As Of April 5, 2023

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Tesla Stock

Tesla stock fell another 1.1% Tuesday, extending Monday’s slide. Shares moved further below a buy point at 200.76 in a cup with handle and are just above their 50-day line. The stock closed Tuesday 50% off its 52-week high.

TSLA stock threatened to add to Tuesday’s losses, dropping 2.8% in early trade.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.3% Tuesday, ending a four-day win streak. Shares remain at their highest level since August. AAPL stock fell 0.7% Wednesday.

Microsoft shares remain in buy range past a flat base’s 276.86 buy point amid a second-straight fall Tuesday. The stock is in the 5% buy area that goes from the buy point to 290.70. MSFT stock moved down a fraction early Wednesday.

Microsoft shares surged earlier this month after the company announced that it is adding artificial intelligence tools to its popular Office productivity applications suite. That follows the company’s investments in artificial intelligence startup OpenAI, the firm behind the buzzworthy 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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