Dow Jones futures were higher ahead of Tuesday’s open after the Dow Jones Industrial Average gained more than 400 points on Monday. Tech titans Alphabet, Apple, Meta Platforms and Microsoft have earnings expected this week.
But first, Dow Jones stocks 3M (MMM) and Coca Cola (KO) will report early Tuesday. General Motors (GM), Halliburton (HAL), Raytheon Technologies (RTX) and UPS (UPS) will also be among key reporters on Tuesday morning.
Stock market today: Chinese stocks plunge
On Monday, the Dow Jones Industrial Average rebounded 1.3% and the S&P 500 advanced 1.2%. The tech-heavy Nasdaq composite climbed 0.9%. And the small-cap Russell 2000 rose 0.35%.
Chinese stocks took a beating on Monday, as China’s Hang Seng index plunged 6.4%, closing at its lowest level since April 29, 2009. Chinese leader Xi Jinping continued to consolidate his powerappointing a number of supporters to the party’s most powerful decision-making body after winning a third term defying convention.
Auto area (AZO), Cardinal Health (HAC), Eli Lily (THERE IS) and Texas Truck Stop (TXRH) — as well as Dow Jones stocks Chevron (CLC) and UnitedHealth (A H) – are among the best stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to put their watchlists into action.
Cardinal and Texas Roadhouse are IBD classification shares. Eli Lilly is a IBD Swing Trader Stock. UnitedHealth has been presented in this week Stocks Near Buy Zone columnplus three other best stock ideas.
Dow Jones Futures Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s opening bell, Dow Jones futures were up 0.1% relative to fair value, while S&P 500 futures edged higher. Nasdaq 100 futures remained unchanged from fair value. Remember that overnight action in Dow Jones Futures and elsewhere does not necessarily translate into actual trading over the next stock Exchange session.
The 10-year Treasury yield rose to 4.23% on Monday, settling at its highest level since June 2008. Meanwhile, U.S. oil prices edged lower on Monday, halting after a winning streak of three days. West Texas Intermediate futures were trading near $85 a barrel.
Third quarter earnings Season: Alphabet, Apple, Meta, Microsoft to report
Earnings reports drive many of the largest stock moves and require close attention. Strong earnings can fuel major stocks to never-before-seen levels — and above new buy points — while a less-than-impressive news can send stocks tumbling.
The stock market’s reaction to an earnings release can often tell you more than the earnings themselves. If results look strong but the stock still slips, investors may worry about the sustainability of growth, rising costs, or other potential negative effects.
With the market in rally attempt mode, investors should follow companies that easily beat earnings results and have strong upside reactions. They could be among the stock market leaders if the market is able to rebound.
What to do in the new stock market rally
Despite recent gains, now is not the time to aggressively step back into actions with both feet, but to take a measured approach. Exposure should be limited to a maximum of 20% of the portfolio for most investors. Aggressive investors should stay below 40% exposure until the market starts to prove itself.
This is an important time to read IBD’s The Big Picture column. After Friday’s powerful gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-ups work, so it’s important to increase exposure slowly and methodically as the new uptrend proves its worth.
If the uptrend is real and significant, you will have plenty of time to make money with successful breakouts. At this time, it is important to be disciplined in increasing exposure as the new market rally strengthens.
Dow Jones stocks to watch: Merck, UnitedHealth
Member of the Dow Jones and IBD Stock 50 Merck exceeds one double bottomat 93.12 point of purchase, according IBD Pattern Recognition MarketSmith. The shares rose 1.8% on Monday, ending in the 5% buy zone which rises to 97.78. Third-quarter results are expected Thursday before the opening bell.
Healthcare giant UnitedHealth is approaching 553.23 from a cup with handle point of purchase, according IBD Pattern Recognition MarketSmith. Shares rebounded 1.5% on Monday, closing in on the stock’s last entry.
Top stocks to watch: AutoZone, Cardinal, Eli Lilly, Texas Roadhouse
Leader in auto parts and Recent IBD stock of the day AutoZone is above the buy point of 2,362.34 from a cut basis, rising 4.6% on Monday. The 5% pursuit zone rises to 2,480.46.
IBD Swing Trader Eli Lilly stock closed again in the buy range past the buy point of 335.43 on a flat basis, rising 2.1% on Monday.
Texas Roadhouse is trying to reclaim the 95.52 buy point from a flat base after a brief breakout move last week. Shares ended just above the entry on Monday. The results are expected on Thursday.
Tesla Stock plunged as much as 7.4% on Monday before cutting losses to 1.5% after slashing prices of its Model 3 and Model Y cars by up to 9% in China. Stocks hit their lowest level since June 2021.
The stock closed around 49% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares rebounded 1.5% on Monday and are about 18% off their 52-week high. Despite a recent rally, the stock remains below its 50 and 200 day lines. Apple’s earnings are expected Thursday after the close.
Microsoft rose 2.1% on Monday, up for a second straight day. Stocks are in rebound mode after hitting a 52-week low on Oct. 13. The software giant remains around 30% off its 52-week high. Microsoft’s results are expected Tuesday evening.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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