Dow Jones rebounds as stock market sell-off worsens; Netflix Earnings Next

The Dow Jones Industrial Average recovered Thursday after the stock market sell-off accelerated on Wednesday. China-based equities soared after central bank stimulus triggered a rally in Hong Kong. Apple stocks are testing a key level, while Netflix earnings are expected after the close. In the meantime, Intuitive Surgical (ISRG) also reports at the end of Thursday.

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Among the Dow Jones leaders, Apple (AAPL) rose 0.5% on Thursday, while Microsoft (MSFT) rose 2% in today’s stock market. Also below the Dow 30, Cisco Systems (CSCO) is just above a recent buy point as it battles for support on the 50-day line.

Electric driving leader Tesla (TSLA) rose 1.2% on Thursday. Lucide Group (LCID) increased by about 3%. And Chinese EV leaders Li Auto (AT THE) and Xpeng engines (XPEV) were much higher.

Among Thursday’s top stocks to watch, Ameriprise Financial (AMP), Mosaic (MOSS) and Taiwan semiconductor manufacturing (TSM) are located in or near new shopping areas. Keep in mind that the current health of the stock market should have investors on the sidelines.

Microsoft and Tesla are IBD Leaderboard stocks. Mosaic is an IBD SwingTrader stock. Ameriprise was in the Stocks column near a buy zone this week.

Dow Jones Today: Treasury Yields

After the stock market opened on Thursday, the Dow Jones Industrial Average rose 0.6%, while the S&P 500 rose 0.8%. The tech-heavy Nasdaq composite climbed 1.4% as Trip.com (TCOM), JD.com (JD) and other China-based names dominated the top of the Nasdaq 100 in morning trading.

Of the exchange-traded funds, the Nasdaq 100-tracker Invesco QQQ Trust (QQQ) gained 0.9% in early trading and the SPDR S&P 500 ETF (SPY) increased by 0.3%.

The 10-year yield fell to 1.82% on Thursday morning. On Wednesday, 10-year Treasury yields fell from a two-year high, to below 1.83%.

The Labor Department reported that the number of first-time jobless claims has risen to 286,000, well above estimates. According to forecasts, claims would fall to 207,000, compared to 230,000 last week, according to Econoday estimates.

Stock market sell-off worsens

The stock market posted another disappointing performance on Wednesday, ending with heavy losses after reversing early gains. The Nasdaq fell further below the long-term 200-day moving average. Meanwhile, the S&P 500 closed at its lowest level since December 1.

Wednesday’s Big Picture noted: “The Nasdaq composite was up 1% and fluctuated for the rest of the session. It closed 1.1% lower and stayed below the 200-day moving average for a second straight day. The Nasdaq’s decline of more than 10% is what most of Wall Street would view as a correction, which aligns with IBD’s new market outlook.”

Amid this recent weakness, now is an important time to check out IBD’s The Big Picture. Instead of buying stocks, investors should keep leading stocks that are relatively strong on their watchlist. These could be some of the market leaders during the next decisive uptrend.

Five Best Dow Jones Stocks to Watch Right Now

Dow Jones Revenue: Travelers

Blue chip insurer Travelers reported profit before market opening on Thursday, handily exceeding earnings and sales estimates. Shares were up 2.2% in morning trading.

TRV shares closed below a buy point of 163.39 in a consolidation Wednesday, but are trying to recapture those entries.

Stock gains: Alcoa, Baker Hughes, Intuitive Surgical

alcohol (AA) reported strong fourth-quarter results after Wednesday’s close, leading to a 5% increase in morning trading. AA shares extend past a double bottom entry of 52.96.

Energy Stock Leader Baker Hughes (BKR) reported mixed results ahead of Thursday’s opening. The stock rose about 4% in early trading. The stock is trying to break out past a 27.76 buy point in a cup base.

Intuitive Surgical will report after the closing Thursday. The company is expected to report earnings per share of $1.28 on revenue of $1.5 billion. ISRG shares are more than 20% off their 52-week high.

Netflix Revenue

FANG stock Netflix (NFLX) will report earnings after the closing Thursday. Netflix’s earnings are expected to fall 30% year over year to 83 cents a share on revenue of $7.7 billion.

NFLX shares have fallen sharply since mid-November. Shares closed more than 25% from a 52-week high on Wednesday, sharply below their 200-day moving average.

Three top growth stocks to watch in the current stock market weakness

Dow Jones Stocks to Watch: Cisco Systems

Cisco Systems, another Dow Jones stock, closed just above a double bottom entry of 58.73 on Wednesday, according to IBD MarketSmith chart analysis, as it tries to find support on the 50-day line. The stock rose 0.5% on Thursday.

The stock’s relative strength has hit new highs in recent weeks, confirming Dow Jones stock as the market leader, but continued weakness in the stock market is dragging the stock downward.

Stocks to Watch: Ameriprise, Mosaic, Taiwan Semi

IBD Leaderboard shares Ameriprise Financial fell 2.3% on Wednesday, finishing just below a 312.25 buy point in a flat base, according to IBD MarketSmith chart analysis. The 5% buy zone rises to 327.86. The stock’s relative strength also hit a new high on January 4 breakout day. AMP shares were up 0.5% Thursday morning.

Mosaic returned some of last week’s breakout move above an entry of 41.25 on a cup-with-handle basis, sliding nearly 4% on Wednesday. MOS stock has a perfect 99 IBD Composite Rating, according to the IBD stock control. The stock was slightly lower on Thursday.

Taiwan Semiconductor fell further below its 135.60 buy point in a head-to-head position, falling more than 2% on Wednesday. TSM shares continue to rise nearly 9% in January, after reporting its fourth quarter results on January 14. Shares rose 0.4% on Thursday.

Join IBD experts as they analyze leading stocks in the current stock correction on IBD Live

EV Stocks: Li Auto, Xpeng, Lucid Motors

Li Auto stocks extended this week’s losses on Wednesday and fell 4%. The stock continues to build on the bright side of a consolidation with an entry of 37.55, while an early entry of 33.86 is also in play. The stock rose more than 3% on Thursday.

Xpeng Motors, Tuesday’s IBD 50 Stocks To Watch pick, slipped 7.4% on Wednesday and slipped back below the 50-day line. The stock continues to build a consolidation with entries of 56.55. Aggressive investors could use 51.60 as an early entry. Shares were up about 3% on Thursday.

Of US-based EV stocks, Lucid Motors shares were up about 3% on Thursday. LCID stock continues to extend past a buy point of 28.49 in a cup-with-handle basis. Meanwhile, the stock’s basic process ran into more trouble during Tuesday’s 7.1% decline and the stock is sharply below the key 50-day line.

Tesla stock

Tesla shares are up 1.2% on Thursday, looking to end a two-day losing streak. Shares tried to regain their 50-day line on Tuesday but were rejected. A new handle entry on 1.208.10 is available.

Shares traded as low as 1,243.49 on Nov. 4, but the stock ended about 20% off its 52-week high on Wednesday.

Dow Jones Leaders: Apple, Microsoft

Of the Dow Jones stock, Apple stock fell 2.1% on Wednesday, finishing just below the key 50-day line. According to the IBD MarketSmith chart analysis, stocks remain about 9% past a buy point of 153.27 off a head-on-hand basis. The stock rose 0.5% on Thursday.

Software leader Microsoft climbed 0.2% on Wednesday, as top Dow Jones stocks continue to etch a flat base with a buy point of 349.77. With the stock below the 50-day line, it clearly has more work to do before a possible breakout. The stock rose 2% on Thursday.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.

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