The Dow Jones Industrial Average traded sharply lower Monday morning, adding to the losses from Friday’s stock market sell-off.
Potential revenue movers this week include discount stores Dollar General (DG) and money tree (DLTR), along with Macy’s (M), Nvidia (NVDA), Sales team (CRM) and Toll Brothers (TOLL). Palo Alto Networks (PANW) and Zoom video (ZM) report after the closing Monday.
Cruise operators were hard on early action with Norwegian Cruise Lines (NCLH) discount of 4%. Boeing (BA) led to declines in the Dow industry with a loss of 2%. Netflix (NFLX) slipped more than 3%, following a downgrade to sell and a modest price target cut from CFRA.
Chinese equities reacted little early Monday after the Chinese central bank cut its key lending rates again in a bid to boost economic growth. Alibaba (BABA) shares were flat, while JD.com (JD) rose 1%. Tencent (TCEHY) lost nearly 1%.
Electric driving leader Tesla (TSLA) fell nearly 2% Monday morning. Elsewhere, Dow Jones Tech Leaders Apple (AAPL) and Microsoft (MSFT) have both fallen sharply after today’s stock market open.
In the current healthy stock market climate, Albemarle (ALB), Arista Networks (A NET), Costco (COST) and Ollie’s bargain outlet (OLLI) — as well as Dow Jones stocks Coca Cola (KO), Merck (MRK) and McDonald’s (MCD) — are among the top stocks to buy and watch.
Albemarle and Costco were featured in the Stocks near a buy zone column last week. Costco shares were added to IBD Leaderboard and SwingTrader in the wake of last week’s breakout move. Albemarle was a recent IBD stock of the day.
Dow Jones Today: Treasury Yields, Oil Prices
Early Monday, the Dow Jones Industrial Average fell 1.2%, while the S&P 500 fell 1.4%. The tech-heavy Nasdaq composite was down 1.7% in morning trading.
Of the exchange-traded funds, the Nasdaq 100-tracker Invesco QQQ Trust (QQQ) fell 1.4% and the SPDR S&P 500 ETF (SPY) fell 1.2% in early trading.
Ten-year government bond yields were stable at 2.98% early Monday, after last week’s jump. Ten-year government bond yields are approaching 3% for the first time since July 21.
Meanwhile, US oil prices plunged after last week’s losses, pushing West Texas Intermediate futures to their lowest level since January. WTI futures fell 3% and traded below $88 a barrel.
stock market rally
On Friday, the Nasdaq and S&P 500 broke four-week win streaks with the week’s worst session on Friday. The Dow Jones Industrial Average fell 0.9%.
The coming days are likely to be key to the stock market trend as the Nasdaq and Dow Jones index test support levels. Meanwhile, the S&P 500 is falling after finding resistance on its long-term 200-day line, an important area to watch.
Friday’s Big Picture column noted: “The rally could use a breather, and stock losses point to at least a period of calm for major indices. That’s not necessarily a reason for investors to flee entirely to cash. , but make sure your profits don’t evaporate.”
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Five Dow Jones Stocks to Watch Now
Dow Jones Stocks to Watch: Coca-Cola, McDonald’s, Merck
Dow Jones soft drink giant Coca-Cola is building a flat base with a buy point of 67.30. A handle input at 65.14 is also in play. Shares are rebounding from their 50-day line and trying to outperform the entry. The stock fell 0.5 percent Monday morning.
Shares of McDonald’s are trading just above a 265.56 cup-with-handle entry after last week’s breakout move. MCD shares lost 0.6% Monday morning.
Merck is also building a flat base, a pattern showing a buy point of 95.82. According to the IBD MarketSmith chart analysis, stocks are moving beyond their 50-day line. Merck shares fell 0.3% on Monday.
MRK stocks show a solid 94 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical statistics.
4 top growth stocks to buy and watchrent Stock Market Rally
Top Stocks to Watch: Albemarle, Arista, Costco, Ollie’s
Lithium producer Albemarle gave up its 273.78 buy point in a large handle cup amid Friday’s 3.4% drop. Shares remain above a smaller handle cup with a buy point of 250.25. The stock lost more than 1% on Monday morning.
Arista Networks, one of last week’s IBD 50 Stocks To Watch picks, continues to slog up the right side of a double bottom base offering a buy point of 143.67. With the stock about 9% away from current entries, look for a handle to provide a more risk-optimal buying point. Arista’s RS line is trending higher and approaching a new high. ANET shares fell 2% on Monday.
IBD Leaderboard stock Costco remains in buy range above a handle cup with a buy point of 552.81 despite falling 1.15% on Friday. Shares fell 0.6% on Monday.
Ollie’s Bargain Outlet is once again testing its 10-week line – a critical support level. Shares found support there earlier in late July, pushing the top discount trader into a new buying zone. Shares also cut a handle after a big cup base, bringing the latest buy point to 72.37. The current price action is about 11% away from those entries. The stock was lower on Monday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares lost 2.05% on Friday, extending a losing streak to four sessions. Shares of the EV giant fell another 1.5% on Monday morning.
Tesla stocks have struggled to overcome resistance around the 200-day line. Tesla is about 28% lower than its 52-week high. The 3-for-1 stock split is set for Wednesday.
Dow Jones Leaders: Apple, Microsoft
Of the Dow Jones stock, Apple shares sold 1.5% on Friday, as the stock continues to build the right side of a cup base with a buy point of 179.71. Another interpretation could be a large double bottom dating back to January. Anyway, the point of sale is identical. The last two days of losses could be the start of a potential handle offering a lower entry.
Bullish, the stock’s relative strength is already at new highs, indicating a major outperformance of the stock market. The stock fell 1.2% Monday morning.
Microsoft fell 1.4% on Friday, extending a losing streak to four sessions and moving further away from its long-term 200-day line. The stock lost 1.5% Monday morning.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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