Before the Bell: Mega-Caps Rule, Tesla Gets Good News, and CPI

Premarket action on Thursday had the three major U.S. indexes trading mixed. The Dow Jones industrials were up 0.08%, the S&P 500 up 0.04% and the Nasdaq 0.08% lower.

All 11 market sectors closed higher Wednesday, with real estate (3.60%) and consumer cyclicals (2.68%) the big winners. Consumer staples (0.06%) posted the day’s smallest gain. The Dow closed up 0.8%, the S&P 500 up 1.28% and the Nasdaq up 1.76%.

Trading volume was up slightly Wednesday, and New York Stock Exchange winners led losers by 2,396 to 7077, while Nasdaq advancers led decliners by more than 2 to 1. Among S&P 500 stocks, GE HealthCare Technologies Inc. (NASDAQ: GEHC) added 8.3% after releasing preliminary fourth-quarter results and raising guidance for the 2023 fiscal year. Another health care company Teleflex Inc. (NYSE: TFX), lost 7.6%, probably as a reaction to the good news from GE HealthCare.

The U.S. Energy Information Administration issued its weekly report on petroleum inventories Wednesday morning, noting an increase of 18.2 million barrels in crude oil stocks and a rise of 4.1 million barrels in gasoline stocks. Spot prices dropped briefly but later recovered to close up by around 3.5%. Crude traded up another 1.3% at $78.44 before U.S. markets opened on Thursday.

The much-anticipated report on December’s consumer price index (CPI) will be released an hour before U.S. markets open Thursday. Economists expect the index to remain flat and the core index (CPI minus food and energy) to rise by 0.3%. Year over year, CPI rose 7.1% in November and core CPI rose 6%.

Wednesday’s stock market gains were led by large- and mega-cap companies. Inc. (NASDAQ: AMZN) added 5.8%, Tesla Inc. (NASDAQ: TSLA) added 4.7%, Alphabet Inc. (NASDAQ: GOOGL) added 3.5% and Microsoft Corp. (NASDAQ: MSFT) added 3%. Over the past five trading sessions, Amazon has added nearly 12% to its share price, while Tesla is up 8.4% and Alphabet is up about 4%. Microsoft is up 2.9% in the same period. The leading gainer among the mega-caps for the past week is ASML Holding N.V. (NASDAQ: ASML), the Netherlands-based maker of semiconductor manufacturing equipment, up nearly 13%.

A report Wednesday that Tesla was near a deal to build a production plant in Indonesia helped give the stock a 3.7% shot in the arm. Thursday morning was a bit of a different story. An Indonesian official has said the negotiations are still in progress, and that was taking some of the glow off the stock.

Automotive News reported Thursday morning that Tesla had passed BMW to become the top U.S. luxury car brand. Tesla’s U.S. sales totaled more than 491,000 in 2022, compared to sales of 332,400 BMWs. After trading down about 0.1% in the early going, Tesla stock moved higher, up about 0.4%.

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