After the release of lower-than-expected inflation numbers, the Dow Jones Industrial Average surged by 600 points on Tuesday. Tuesday’s Federal Reserve policy meeting, which will be held over two days, will also begin. Boeing stock rose further beyond a buy point following United Airlines’ new Dreamliner order.
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CPI Inflation Data
Inflation data showed that the Consumer Price Index rose 0.1% for November, a decrease of 0.3% from the forecast. The index rose 7.1% over the past year, less than the Econoday estimate at 7.3%.
The next Fed meeting starts Tuesday and will conclude Wednesday with an interest rate decision. Although the Fed has already strongly telegraphed a 50 basis-point increase, investors will want more information about the Fed’s plans. According to the CME’s FedWatch toolTrades place a 79% chance that the 50-basis point rate will rise.
Tuesday, late Monday Oracle (ORCLAnalyst estimates were exceeded by ) reporting earnings and sales numbers. Oracle shares rose by 4% during morning trade. This week’s earnings report includes more Darden Restaurants (DRI( Lennar (LEN).
Electric-vehicle giant Tesla (TSLA) reversed lower Tuesday. There are a number of Dow Jones stocks. Boeing (BAAfter the announcement, ) rose 3% United Airlines (UAL) ordered at least 100 of the aerospace giant’s 787 Dreamliners, with an option to buy 100 more new jets. Boeing shares can be purchased beyond the 173.95 buy point at a cup base.
Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were also sharply higher after today’s stock market open.
Allegro Microsystems (ALGM), IBD Leaderboard stock Dexcom (DXCM), KLA (KLAC) and Interactive Brokers (IBKR) — as well as Dow Jones names Caterpillar (CAT), Home Depot (HD( UnitedHealth Group (UNH) — are among the top stocks to buy and watch.
Trane and Dexcom are IBD Leaderboard stocks. UnitedHealth was highlighted in this week’s Stocks Near A Zone Column. Allegro was one of the recent IBD 50 Stocks To Watch picks. Recent IBD Stock Of The Day picks included Interactive Brokers, Caterpillar and Dexcom.
Dow Jones Today: Treasury Yields, Oil Prices
The Dow Jones Industrial Average rose 1.4% after Tuesday’s opening bell. Boeing rallied. Merck (MRK) surged more than 2% after clinical trials showed positive results from a joint cancer-treatment therapy with Moderna (MRNA). Moderna stocks were up more than 10% in the early hours of Tuesday.
The S&P 500 gained 2.3%, and the tech-heavy Nasdaq composite soared 3.1% in morning action.
The Nasdaq 100 tracker Invesco QQQ Trust is one of the exchange-traded funds.QQQ) rose 3.7% and the SPDR S&P 500 ETF (SPY) moved up 2.6% early Tuesday.
The yield on the U.S. Treasury 10-year note fell to 3.44% Tuesday morning after the release CPI inflation data.
U.S. oil prices rose 1.6% Tuesday morning. West Texas Intermediate futures were above $73 per barrel. Natural gas futures rose to a fifth consecutive advance, climbing 3.7% to $6.83 for a million British thermal units.
Stock Market Rally
Monday saw solid gains in the stock market. The Nasdaq composite rose 1.3%, the S&P 500 added 1.4%, and the Dow Jones Industrial Average climbed 1.6%. The Russell 2000 rose 1.2% to find support at the 50 day moving average.
Monday’s The Big Picture column stated, “Indexes have entered an indecisive phase. They are trading above support levels, but also testing resistance.” The Nasdaq remains above its 50-day moving average and the 11,000 level. But the S&P 500 met resistance at the 200-day moving average and has yet to regain the 4,000 level.”
Despite the stock market volatility, it is a good time to review IBD’s The Big Picture column.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones Stocks to Buy and Watch: Caterpillar Home Depot, UnitedHealth
Dow Jones member Caterpillar keeps drifting further away from the 238 buy point for a cup base. according to IBD MarketSmith pattern recognition, in the wake of Monday’s 2.5% advance. CAT stock The composite rating is a solid 95/99 IBD Composite Rating. IBD Stock Checkup. Tuesday saw a 2% increase in CAT stock.
Home Depot, a home improvement retailer, ended Monday about 1% lower than the 329.77 buy points of a cup with handle base. HD stock rallied over 5% Tuesday morning, surpassing the latest buy point.
UnitedHealth Group, a health care company, is looking at a flat base with a 558.20 purchase point. The latest entry is just 3% away. The UNH stock gained 0.3% Tuesday morning.
Four Top Growth Stocks to Watch in The CurrRally on the Stock Market
Top Stocks to Buy and Watch: Allegro. Dexcom. KLA. Interactive Brokers.
Allegro Microsystems’ Monday trade ended in buy territory, above the 32.07 buy point of a cup-with handle. This was following the 0.1% gain. ALGM stock traded at 3.5% on Tuesday.
IBD Leaderboard stock Dexcom wants to move past a 123.26% buy point in a flat basis and is just below that entry. Dexcom stock rose 2.3% on Tuesday morning.
After Monday’s 1.9% increase, chip leader KLA is now moving beyond a cup with-handle’s 392.60 entry. Bullishly, relative strength continues to rise in market volatility. KLA shares were up 3.8% on Tuesday.
Interactive Brokers has formed a cup-with-handle pattern with an official 81.56 buy point, according to IBD MarketSmith analysis. However, shares are now below their 50-day mark after Monday’s losses. Bullish for the stock’s immediate prospects would be a decisive retake at that level. IBKR stock was up 1.5% on Tuesday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock lost 6.3% Monday. This means that Friday’s gains were lost and the stock is heading back to its previous lows. The shares rebounded by 4% Tuesday morning, before falling back to a new low of 2022.
Recent weeks have seen TSLA stock fall to its lowest point since Nov. 23, 2020. It reached a 52-week low of 166.19. Monday’s close was at 167.82 for shares, which is 58% below their 52-week peak.
Dow Jones Leaders – Apple, Microsoft
Apple shares rose 1.6% Monday in Dow Jones stocks. This was still below the key 50-day line. The 50-day line was a critical support level. However, it has now become an area of resistance that we need to monitor. The stock is currently at 21% below its 52-week peak. Apple stock was up 3.4% on Tuesday
Microsoft shares rose 2.9% Monday as support remains at the 50-day mark. The 52-week high for the software giant is still 27%. Microsoft shares rose 3.6% on Tuesday morning.
Follow Scott Lehtonen Twitter @ @IBD_SLehtonen Find out more about growth stocks and the Dow Jones Industrial Average.
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