Dow Jones Slides 350 Points After Cool Inflation Data, Rising Jobless Claims; PacWest Plunges 30% On Falling Deposits

The Dow Jones Industrial Average fell more than 350 points on Thursday, following key inflation data including the Labor Department's Producer Price Index and initial weekly jobless claims. Walt Disney (DIS), which has been struggling with subscriber growth, plunged, while PacWest, the embattled regional banking company, fell after it reported that deposits had fallen nearly 10% for the week ending May 5.

The producer price index for April rose by 0.2% over the previous month and 2.3% on an annual basis, which is lower than expected. Core prices increased 0.2% over the past month, and 3.2% over the last year. These were also lower than expected.

The number of first-time claims for unemployment benefits has also risen to 264,000 – the highest since October 2021. It was expected that they would rise to 245,000 from 242,000 the previous week.

Disney and Trade Desk were both on the move early Thursday morning after their earnings.

Trade Desk reported on Wednesday that its March quarter earnings and revenue surpassed estimates, as internet television drove growth. TTD's stock rose nearly 5% on Thursday morning as the company's outlook surpassed expectations.

The best stocks in the current stock market trend are Advanced Micro Devices, Nvidia, IBD Leaderboard Nvidia, Netflix (NFLX), Uber Technologies (UBER), and Visa (V).

This week, Visa is featured in the Stocks Near A Buy Zone IBD Stock of The Day column.

Dow Jones Today: Oil prices, Treasury Yields

The Dow Jones Industrial Average dropped 1.1% after Thursday's opening. Disney shares were the main culprit. S&P 500 fell 0.5% while Nasdaq Composite lost 0.2%. Alphabet (GOOGL), which is a tech heavy company, was at the top of the list and expected to continue its 5.9% weekly gain through Wednesday.

The Nasdaq-100 tracker Invesco QQQ Trust, (QQQ), rose by less than 0.1% while the SPDR S&P500 ETF, (SPY), traded lower at the start of Thursday.

After the PPI report, which showed a low inflation rate of 3.36%, the 10-year U.S. Treasury Yield traded at 3.36% on Thursday.

U.S. crude oil prices eased Thursday morning, after recovering from multi-month lows. West Texas Intermediate futures were trading at $72 per barrel so far this month, a drop of about 6%.

Stock Market Rally

The Dow Jones Industrial Average dropped 0.1% on Wednesday. The S&P 500 gained 0.45% while the Nasdaq composite, which is heavily tech-oriented, rose more than 1%.

The Big Picture column on Wednesday stated, "Watch out as complacent traders could collide with the June 1, debt ceiling deadline."

Dow Jones Stocks to Buy and Watch: Nike, Visa

Nike shares fell 1.3% on Wednesday. They are now further below the 127.59 purchase point for a cup with handle after last week’s breakout attempt. Another handle entry, 128.78, has appeared. The 50-day line is a good place to look for support. NKE shares fell by 0.4% on Thursday morning.

Even after a 0.8% drop on Wednesday, Visa shares are still in the buy range. The range of buys goes up to 241.66. The V stock rose 0.1% on Thursday.

AMD, Nvidia Netflix, Uber: Best Stocks to Buy and Watch

According to IBD MarketSmith's pattern recognition, chip leader Advanced Micro Devices is continuing to rise up the right-hand side of a base cup that has a buy point of 102.53. AMD's stock climbed above an early trendline, with the high of May 4, 91.64 as the buying point. AMD shares rose by 1.9% on Thursday.

Nvidia, the IBD Leaderboard's stock, finished Wednesday with a 1.1% gain. It is still within a buy range over a 280.10 point of purchase in a brief consolidation. The 5% zone extends up to 294.11. The NVDA stock rose 0.1% on Thursday morning.

Netflix, the IBD Stock of The Day for Monday, has risen above its 50-day average moving line. This positive movement created an opportunity for investors to buy. Netflix shares are now nearing the buy point of $349.90 from a cup with handle base. NFLX stock lost 0.1% Thursday morning.

Uber Technologies has decisively moved over a 37.68 purchase point in a base cup, gaining 1.6% on Wednesday. UBER's shares remain in the 5% buying area, which goes up to 39.56. Stocks were down 0.6% on Thursday.

There are four stocks that you should buy today and keep an eye on, including two Dow Jones leaders.

Advanced Micro Devices 102.53 Cup Base

Source: IBD data as of May 11, 2023

Tesla Stock

Tesla's stock fell 0.4% on Wednesday for the second consecutive day. The shares are still below the 50-day line despite their gains since late April. They're trying to establish a new base. The stock closed at a 46% discount to its 52-week peak on Wednesday.

TSLA's stock appeared to be recovering from its losses on Wednesday, but it traded a little lower in the early hours of Thursday.

Dow Jones Leaders - Apple and Microsoft

Apple stocks rose 1% on Wednesday after two days of losses. The shares closed at a distance of just a few centimeters from their mid-August 52-week highs. Stock continues to rise above the 157.48 purchase point, and is now out of the range where it could have reached 165.35. AAPL's stock fell slightly on Thursday.

Microsoft shares rose 1.7% on Wednesday, reaching a new 52 week high. The shares remain well above the 276.86 buy-point. On Thursday morning, MSFT stock fell 1.4%.