The Dow Jones Industrial Average rallied off lows after a senior Federal Reserve official spoke out on Treasury yields. Rivian Automotive cratered amid a debt offering while Tesla CEO Elon Musk hit out after it emerged he is being sued by the SEC. The bears cleaned Clorox's clock amid a profit warning.
A number of stocks worth watching showed strength despite the lackluster session. Neurocrine Biosciences, CME and Cencora all showed strength near entries.
Fed Official Mary Daly Talks Yields; Jobs Report Looms
Stocks fought back from session lows after San Francisco Federal Reserve Bank President Mary Daly said Thursday that rising bond yields could cause central bankers to hold off on another interest rate hike.
"If we continue to see a cooling labor market and inflation heading back to our target, we can hold interest rates steady and let the effects of policy continue to work," she told the Economic Club of New York.
Treasury yields reversed. The 10-year yield dipped 2 basis points to 4.72% while the two-year yield skidded 3 basis points to 5.02%. The yield curve remains inverted.
Investors were also weighing new jobs data ahead of Friday's jobs report. Initial filings for unemployment benefits came in at 207,000 for the week ended Sept. 30, according to Labor Department data, up 2,000 from the week before. It was lower than analyst expectations for 210,000. Earlier this week, U.S. job openings unexpectedly grew in August while ADP private payrolls rose at a rate well shy of expectations.
This has set the stage for a crunch jobs report tomorrow. It is expected that the nonfarm payrolls report will show a rise of 170,000 in September, which would be a decline from the previous month's 187,000 gain.
Nasdaq Off Lows As Lamb Weston Sizzles
The tech-heavy Nasdaq ended well off lows for the day but still fell 0.1%. CoStar fared well here as it rose 4%.
The S&P 500 also battled back as it ended the session down 0.1%. French fries giant Lamb Weston flexed its muscles with an 8% lift after it hiked its full-year earnings guidance.
The S&P 500 sectors closed mixed with a bias to the negative. Real estate and health care fared best in the stock market today. Consumer staples and materials were the worst-performing areas.
Small caps managed to close higher, with the Russell 2000 gaining 0.2%. Growth stocks outperformed: The Innovator IBD 50 ETF rose 1.1%.
Dow Jones Today: UnitedHealth, Disney Stock Shine
The Dow Jones Industrial Average briefly scrambled out of the red but ended the day 10 points lower, though it was still essentially flat.
Walt Disney was the top Dow performer as it rose 1.9%. The media giant remains below its major moving averages, MarketSmith analysis shows.
But UnitedHealth also fared well as it popped 1.1%. It pulled further above its 50-day and 200-day moving averages.
Coca-Cola and Dow Inc. were the worst laggards on the Dow Jones today. KO fell 4.8% while DOW lost 2.4%.
Rivian Stock Craters, Elon Musk Hits Back Amid SEC Lawsuit
Rivian Automotive was torn apart by the bears after the EV firm announced it will offer $1.5 billion of convertible debt.
It also issued a preliminary view of its Q3 revenue. The fact that it was just in line with estimates disappointed investors.
RIVN ended the session near lows as it gave up 22.9%. Its plunge saw the stock erase all of Wednesday's 9.2% gain and more. The fact that it dived below its 50-day line in massive volume qualifies as a sell signal.
Meanwhile, Tesla stock is hanging tough near a cup-with-handle entry of 278.98. It ended the day down 0.5%. TSLA is a member of the Leaderboard Watchlist of top stocks.
It also emerged that the U.S. Securities and Exchange Commission is suing Tesla CEO Elon Musk. Bloomberg reported he is being sued in federal court in San Francisco. The SEC wants to force the billionaire to testify in its probe into his 2022 purchase of Twitter, now known as X.
The agency is looking into Musk's purchase of Twitter stock as well as his disclosures over his investment in the firm.
It is just one of a slew of legal issues currently affecting the unconventional Tesla CEO and his companies. Musk hinted he feels he is being targeted, snarkily saying on X it is "just a coincidence that it all happened at once."
Futures: Jobs Report On Tap; Tesla, Exxon Fall On News
Bears Wipe Floor With Clorox Stock
Clorox stock was also given a beating after it cut its forecast for the September-ended quarter.
The firm — which makes the Formula 409 range of cleaning products as well as its own brand-name lines — warned a cybersecurity attack over the summer will hurt results.
CLX stock was off lows but still finished with a painful 5.2% dip. At one point in the session, it fell to its lowest level since May 2018.
Raymond James downgraded Clorox stock to market perform from outperform, while some other analysts cut their price targets.
CLX stock currently sits around 19% below its 200-day moving average and about 16% below its downward-sloping 50-day line.
Outside Dow Jones: 3 Stocks Flex Muscles
Investors should be building a robust watchlist with the market in the grip of a correction. Here are some potential candidates eyeing entries:
Neurocrine Biosciences moved toward a cup-with-handle buy point of 119.29. The relative strength line is rising.
Overall performance for this biotech stock is solid, with its IBD Composite Rating coming in at 91 out of 99.
CME is closing in on a flat-base buy point of 209.31. The relative strength line hit fresh heights Thursday, a good sign.
Earnings are a strength here, with the stock's EPS Rating a robust 87 out of 99. The financial exchange operator also has good institutional backing.
Wholesale drug company Cencora has forged a flat base with a potential buy point of 194.79. This is an early-stage pattern.
Big money has been a net buyer of the stock of late, with its Accumulation/Distribution Rating coming in at B-.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
