Dow Jones Falls as China Covid Worries Ease; Alibaba, JD, Pinduoduo Surge

The Dow Jones Industrial Average fell on Tuesday after a difficult session on Monday. China-based stocks Alibaba (DADDY), (JD) and Pinduoduo (PDD) China rallied sharply as Covid-19 concerns eased.


Tuesday’s modest dose of economic news includes the Case-Shiller Home Price index for September and November from the Conference Board at 10 a.m.

Looking forward to the rest of the week, the ADP National Employment Report and the Commerce Department’s preliminary GDP estimates for the third quarter are due out on Wednesday. Weekly jobless claims and inflation data are due Thursday, and the Labor Department’s November employment report is due Friday.

Finally, Fed Chairman Jerome Powell will speak at the Brookings Institution on Wednesday.

Hibbett (HIBB) reported earnings before the open on Tuesday. HIBB shares fell more than 12% in morning trading.

Included in earnings reports later this week CrowdStrike (CRWD), Dollar General (DG) and Intuit (INTU). Dow Jones stocks are also included Salesforce (CRM) together with Snowflake (SAR), Ulta Beauty (ULTA) and Work day (WDAY).

Chinese stocks performed strongly early on Tuesday as Chinese health officials moved to ease concerns about the Covid-19 lockdown and policies. Alibaba rose 6%, and rose 8%. Pinduoduo added 4.3% on Monday’s choppy move.

Darden Restaurants (DRI) and Roku ( ROKU ) both sent their respective stocks lower, with analysts downgrading their estimates early Tuesday. DRI shares fell more than 1%, while Roku shares fell 4.5%. At the top, United Shipping Service ( UPS ) rose 2% after Deutsche Bank upgraded the stock to a buy rating.

The electric car giant Tesla ( TSLA ) was down 0.5% on Tuesday morning. Dow Jones technology leaders apple (AAPL) and Microsoft ( MSFT ) was modestly lower after the stock market opened today. Tesla and Apple are both heavily exposed to the situation in China.

IPO Leader Array Technologies, IBD Leaderboard fund Arista Networks (ANET), Celsius (CELH) and Chubb (CB) – also names Dow Jones Boeing (BA), Caterpillar (CAT) and Chevron (CVX) — is among the best stocks to buy and watch.

Arista Networks is an IBD Leaderboard fund and recently IBD Stockholder of the Day. Boeing is an IBD SwingTrader stock and was one of four leaders featured in this week’s Stocks Near Buy Zone column. Celsius was an IBD 50 Stocks to Watch pick on Monday.

IBD’s latest MarketDiem newsletter delivers actionable ideas for stocks, options and cryptocurrencies straight to your inbox.

Dow Jones today: Oil prices, Treasury yields

The Dow Jones Industrial Average was down 0.2% and the S&P 500 was down 0.1% after the opening bell on Tuesday. The tech-heavy Nasdaq composite fell 0.15% in morning action, with Chinese names supporting the index in early action.

Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) lost 0.1% on Tuesday, while the SPDR S&P 500 ETF ( SPY ) lost 0.15%.

The 10-year Treasury yield rose to 3.75% on Tuesday morning, near recent lows. Last week, the 10-year Treasury yield closed at 3.69%, the lowest close since Oct. 4. Meanwhile, US oil prices rose 2% after hitting their lowest level since December 2021 on Monday. West Texas Intermediate futures traded just below $79 a barrel.

Stock market rally

On Monday, the stock market posted sharp losses as the tech-heavy Nasdaq composite sold off 1.6%. The Dow Jones Industrial Average lost 1.45% and the S&P 500 lost 1.5%.

On Monday, The Big Picture commented, “The S&P 500 closed below 4,000, just three sessions after winning back. The Nasdaq remained in a sideways range, still above its 50-day moving average. The Dow Jones, meanwhile, fell below 34,000.”

Now is an important time to read IBD’s The Big Picture column amid continued stock market volatility.

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones Stocks to Buy and Watch: Boeing, Caterpillar, Chevron

Aerospace giant Boeing fell 3.7% on Monday to 173.95 buy points below a cup base. Before you consider buying Boeing stock, look for a definitive reversal of that entry. Boeing shares rose 1% on Tuesday.

Dow Jones member Caterpillar is close to retrieving the 238 buy points of its trophy base. IBD MarketSmith is about 2% lower than the entry due to pattern recognition. CAT shares gained 0.8% on Tuesday.

The CAT fund boasts an impressive 96 out of a perfect 99 IBD Composite Rating according to the IBD Fund Check.

Energy giant Chevron fell 2.9% on Monday, giving up a 182.50 buy point on a consolidation base. CVX shares rose 1.7% on Tuesday morning, rising again along with oil prices.

4 Best Growth Stocks to Watch on Current Stock Market Rally

Best stocks to buy and watch: Array, Arista, Celsi, Chubb

Solar leader and IPO shareholder Array Technologies gave up a 22.40 buy point in a cup with handle on Monday’s decline, according to IBD MarketSmith model recognition. Shares are down about 3% from the entry. Additional weakness will trigger a 7%-8% loss reduction sell order. ARRY shares were up 0.6% on Tuesday morning.

IBD Leaderboard stockholder Arista Networks remains in buy range above the 132.97 buy point of a wavy base, despite Monday’s 1.5% loss. ANET shares fell 0.3% on Tuesday.

Energy drink maker Celsius fell 1.3% on Monday as shares continued to make a cup base with a buy point of 118.29. Monday’s weakness could be the start of a potential run that suggests a lower entry. Shares fell 0.6% on Tuesday.

Chubb is trading below a cup of Monday’s 216.10 buy point after the session’s modest losses. If the stock re-enters, the 5% buy area will rise at 226.91. The insurance giant fell 0.1% on Tuesday morning.

Join IBD’s experts as they analyze the leading stocks in the current stock rally on IBD Live

Tesla shares

Tesla shares rose on Monday as the stock continues to rally from recent lows. Last week, the stock hit its lowest level since November 23, 2020, hitting a new 52-week low of 166.19. Tesla shares are down about 55% from their 52-week highs and are sharply below their 50- and 200-day moving averages.

Shares of the home appliance giant were down 0.5% in early trading on Tuesday.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares fell 2.6% on Monday, falling below 50-day support. According to reports, Apple iPhone Pro production could be reduced by 6 million units due to civil unrest and Covid restrictions in China. Shares are down more than 20% from their 52-week highs.

Apple shares fell 0.2% on Tuesday.

Microsoft fell 2.3% on Monday, falling for the second session in a row. Shares continue to remain above the 50-day line. The software giant remains about 30% below its 52-week high. Microsoft shares fell on Tuesday morning.

Be sure to follow Scott Lehtonen on Twitter @IBD_SLehtonen For more information on growth stocks and the Dow Jones Industrial Average.


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