Dow Jones futures were higher before Tuesday’s open. A new attempt at a stock market recovery began on Monday, as the Dow Jones Industrial Average rose 765 points.
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Today’s stock market
On Monday, the Dow Jones Industrial Average rose 2.7%, leading the stock market higher. The S&P 500 rose 2.6% and the tech-heavy Nasdaq Composite rose 2.3%. And the small-cap Russell 2000 advanced 2.65%.
Among funds traded, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 2.35% and the SPDR S&P 500 (SPY) rose 2.6%.
This week’s key earnings reports come from Brands Acuity (DO), ConAgra brands (CAG), Constellation Marks (STZ) and McCormick (MKC).
General Motors (GM) reported third-quarter auto sales on Monday, beating expectations on strong consumer demand and better vehicle availability. GM shares rose 2.4% on Monday, but are still more than 50% off their 52-week high.
EV giant Tesla ( TSLA ) fell 8.6% after missing vehicle delivery estimates. Among the Dow Jones stocks, apple ( AAPL ) rose 3.1%, while Microsoft ( MSFT ) rose 3.4% in the stock market today.
In the current weakness of the stock market, Murphy USA (MUSE), Neurocrine Biosciences (NBIX), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE), as well as Dow Jones stocks UnitedHealth (UNH) — are among the best stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and make watch lists.
Vertex is a recent addition to the IBD Leaderboard. Murphy USA was featured in this week’s Stock Near A Buy Zone column, along with three other top stock ideas.
Dow Jones futures today: Treasury yields, oil prices
Ahead of Tuesday’s opening bell, Dow Jones futures were up 0.5% from fair value, while S&P 500 futures gained 0.6%. Nasdaq 100 futures rose 0.9% to fair value. Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next normal stock market session.
The 10-year Treasury yield fell significantly to 3.65% on Monday. Last week, the 10-year Treasury yield briefly topped 4%, which it hadn’t done in more than a decade.
Meanwhile, US oil prices rose more than 4% on Tuesday as West Texas Intermediate futures traded above $83 a barrel. Last week, they fell to their lowest level of the year. On Wednesday, OPEC+ will meet to consider a production cut to help shore up falling oil prices.
What to do in the new attempt at stock market concentration
Despite Monday’s strong gains, the IBD market trend remains a “correcting market,” with strong selling in recent weeks. That means investors should stay in cash.
However, Monday’s gains started a new attempt at a stock market recovery, which is your Day 1. Day 2 and Day 3 action is irrelevant as long as the index doesn’t break off its last low. If this low is lowered, the recovery attempt is over and the market must try again.
Investors should then wait for a follow-up day, which will occur on the 4th or later. Starting Thursday (the 4th), you’re looking for the Nasdaq or S&P 500 to rise sharply on higher volume than the previous session. This is a tracking day. It gives investors the green light to start buying major stocks by beating the correct buy points. You should synchronize your portfolio and mindset with the action of the stock market, gradually committing capital to the main stocks.
Now, before a potential tracking day, is the perfect time to build a solid watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market bottom signal. Missing this early opportunity can be a costly mistake.
Friday’s The Big Picture column commented: “The market average has now fallen for a third consecutive quarter for the first time since 2009. The crumb of comfort for investors is the fact that IBD research finds that bear markets they form in three or four waves of intense sales. It looks like it will be the third stage.”
Five Dow Jones Stocks to Watch Now
Dow Jones stocks to watch: UnitedHealth
Shares of Dow Jones UnitedHealth advanced 2.1% on Monday, finding support again around the longer-term 200-day line. Shares are building a flat base that has a buy point at 553.23, according to IBD MarketSmith chart analysis. Shares are about 7% from their last buy point and are facing a test of resistance at the 50-day line.
UNH stock scores a strong 95 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Review. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics.
4 most important growth actions to watch in the Current Stock market correction
Top acts to watch: Murphy USA, Neurocrine, Vertex, WWE
Gas station and convenience store leader Murphy USA is building a flat base with a buy point of 303.19. The stock rallied 3.1% on Monday and is nearing potential resistance at its 50-day line. A decisive recovery from this level would be optimistic for the stock’s base-building prospects.
According to IBD MarketSmith’s chart analysis, Wednesday’s IBD 50 stock pick to watch, Neurocrine Biosciences, is building a flat base that has a buy point of 109.36. Shares are just 2% away from a buy point after Monday’s 0.5% gain. The RS line hit a new high on Friday, a bullish signal.
Vertex Pharmaceuticals decisively recovered its 50-day line last week. The stock is building a flat base with a buy point at 306.05 and an early entry at 296.24. Shares outperformed early entry during Monday’s nearly 3% gain. While the weak state of the market may keep you on the sidelines, the stock’s resistance makes it an excellent idea. Its RS line is at new highs, a possible sign of strong stock performance.
World Wrestling Entertainment continues to build a flat base that has a 75.33 entry. The stock is back above its 50-day line and just 4% from the buy point. The RS line continues to reach new highs.
Join IBD experts as they analyze the top stocks in the current stock market correction on IBD Live
Tesla stock
Tesla shares fell 8.6% on Monday, closing at their lowest level since July 18, after the company missed estimates for vehicle deliveries over the weekend.
The electric vehicle giant delivered 343,830 electric vehicles in the third quarter, up 42% from a year earlier and surpassing the record of 310,048 in the first quarter. It was also 35% higher than the 254,695 in the second quarter. The Shanghai plant faced a prolonged shutdown and slow recovery in the second quarter due to the Covid lockdowns.
But analysts expected Tesla deliveries between 350,000 and 370,000, with the consensus slightly above 360,000. Tesla cited an increase in the number of vehicles in transit. But that may reflect weaker Chinese demand, which spurred an earlier-than-usual export push from Shanghai.
The stock is more than 40% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 3.1% on Monday, snapping a three-day losing streak. Still, the stock is more than 20% off its 52-week high and below its 50- and 200-day lines.
Microsoft rose 3.3% on Monday, recovering from Friday’s 52-week low. The software giant remains more than 30% off its 52-week high.
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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