The Dow Jones Industrial Average fell sharply on Wednesday ahead of the much-anticipated minutes of the Fed’s latest meeting, while US retail sales were weaker than expected. Bed Bath & Beyond (BBBY) rose again on Wednesday morning.
Shares of BBBY were poised to continue their tumultuous winning streak on Wednesday amid revived interest in meme stocks, as the stock soared as much as 45% before paring gains as much as 20% in morning trading. Bed Bath & Beyond, the struggling retailer with big losses, has surged 355% since its July 27 low of 4.54 by Tuesday’s close.
Key earnings drivers on Wednesday include Analog devices (ADI), Lowe (LOW), Target (TGT) and TJX (TJX). Meanwhile, Dow Jones stocks Cisco Systems (CSCO) will report after closing.
Shares of Analog Devices fell more than 4%. Lowe’s shares fell by nearly 1%. Target shares fell 4%, while TJX shares traded 1% lower.
A leader in electric vehicles Tesla (TSLA) traded down 1% on Wednesday morning. elsewhere Dow Jones Technology Leaders An apple (AAPL) and Microsoft (MSFT) were mixed afterwards today’s stock market open.
In the current healthy stock market environment, Dow Jones stocks Coke (KO) and Merck (MRK) – as well as Albemarle (ALB), Costco (PRICE), Monolithic energy systems (MPWR) and Ollie’s Bargain Outlet (OLLY) — are among the best stocks to buy and watch.
Albemarle and Costco were presented in this week’s column Stocks near a buy zone. To Costco’s stock were added IBD ranking and SwingTrader as a result of Tuesday’s breakout.
Dow Jones today: Treasury yields, oil prices
Early Wednesday, the Dow Jones Industrial Average lost 0.55 percent, trying to snap a five-day winning streak. The S&P 500 was down 0.7%. And the tech-heavy Nasdaq composite was trading down 1.1% in morning trade.
Between exchange traded fundsthe Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1%, and the SPDR S&P 500 ETF (A SPY) lost 0.8% in early trade.
The yield on the 10-year Treasury note rose to 2.88 percent early Wednesday, after Tuesday’s close at 2.79 percent. The yield on the 10-year Treasury note has rebounded after hitting its lowest level since early April in recent weeks.
Meanwhile, U.S. oil prices edged lower, threatening to extend a four-session losing streak that has left futures down more than 8%. West Texas Intermediate futures were trading just above $87 a barrel, their lowest level since January.
US retail sales miss, Fed minutes
U.S. retail sales came out at 8:30 a.m. ET. July sales were unchanged from the previous month, missing Econoday forecasts that called for a 0.1% rise. Excluding autos, retail sales rose 0.4% in July. Excluding cars and gasoline, sales rose 0.7%.
The Federal Reserve released minutes of its last meeting at 2:00 PM ET. The minutes are expected to reveal clues into the thoughts of Federal Open Market Committee members on potential rate hikes at the upcoming meeting in September.
At the last meeting of the FedThe central bank raised interest rates by 75 basis points for the second consecutive meeting, and Fed Chairman Jerome Powell indicated that a third such increase “could be appropriate” in September.
Stock market rallies
On Tuesday, the Nasdaq composite fell 1.1% intraday, but trimmed its loss to 0.2% by the closing bell. The S&P 500 rose 0.2 percent, while the Dow Jones industrial average gained 0.7 percent.
The Big Picture column on Tuesday commented: “Another sustained performance was good news for the bulls, but the stock market is starting to look overbought on at least one indicator. The short-term overbought/oversold oscillator (found in MarketSmith via NASDQ entry) is rapidly approaching its peak in early June. This is the last time the Nasdaq showed overbought conditions. The index fell sharply for three consecutive sessions from June 9 to 13. For the month, the Nasdaq fell 9.7%.”
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Dow Jones Earnings: Cisco Systems
Networking giant Cisco Systems will report its second-quarter earnings after the close on Wednesday. Dow Jones stock is expected to earn 82 cents a share on sales of $12.7 billion.
Cisco shares ended Tuesday about 27% off their 52-week high.
Five Dow Jones Stocks to Watch Now
Dow Jones stocks to watch: Coca-Cola, Merck
Dow Jones soft drink giant Coca-Cola is building a flat base that has a buy point at 67.30. A handle entry at 65.14 is also in play. The stock is recovering from its 50-day line and trying to reach the top of the entry during Tuesday’s 0.8% gain. Shares were lower early Wednesday.
Merck is also building a flat base, a pattern that shows a 95.82 buy point. The stock is trying to hold above its 50-day line, according to IBD MarketSmith graph analysis. Merck shares rose 0.3% on Wednesday.
MRK shares showing a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Check. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical indicators.
4 Biggest Growth Stocks to Buy and Watch in the Courserstock market rally
Top stocks to watch: Albemarle, Costco, Monolithic, Ollie’s
Lithium producer Albemarle remains in buy range after Friday’s breakout following a large cup handle at 273.78 point of purchase. The 5% buy zone rises to 287.47. Earlier last week, the stock broke above a smaller cup-handle with a buy point of 250.25. Shares fell 1.15% on Tuesday, snapping a four-day winning streak. Shares were down about 0.4% Wednesday morning. Lithium giant Sociedad Kimica and Minera de Chile (SQM) will report after closing.
IBD ranking Costco shares outperformed a mug with a 552.81 buy point. Shares rose 1.3% on Tuesday, closing just above the last entry. Shares were down 0.6% early Wednesday.
Recent IBD Stock of the Day Monolithic Power Systems added a handle to the base of the bowl last week, moving the correct buy point from 580.10 to 541.49. Meanwhile, shares remain above an entry of 514.80. Shares fell 1.6% on Wednesday.
Ollie’s Bargain Outlet is recovering from its 10 week line — critical level of support — placing the best discount retailer in a new buying area. Stocks also carve a handle after large cup base, placing the last buy point at 72.37. Current price action is about 9% away from this entry. Shares were down 2.8% Wednesday morning.
Join IBD’s experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares lost 0.9% on Tuesday, ending a two-day winning streak. Shares of the EV giant were down 1% Wednesday morning.
The stock closed this week at its highest level since May 4. The stock is trying to reassert itself above resistance around its 200-day line, which is a key level to watch. Shares are about 25% off their 52-week high. The 3-for-1 stock split will take place on August 24.
Dow Jones Leaders: Apple, Microsoft
Between Dow Jones StocksApple shares were down 0.1% on Tuesday, as were stocks continue to build the right side of the cup base which has 179.71 buy points. Another interpretation could be a major double bottom extending into January. Either way, the point of purchase is identical. Watch for a potential handle to form and suggest a lower entry.
On the upside, the relative strength line of stocks is now at new highs, indicating major stock market outperformance. Shares were up 0.5% on Wednesday morning after a pair of price target hikes.
Microsoft fell 0.3% on Tuesday, finishing just short of the long-term 200-day line, which is a key resistance area to watch. Shares were down 0.4% early Wednesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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