Dow Jones futures were higher for Tuesday’s opening. The Dow Jones Industrial Average ended in a bear market, down 20% or more from a recent high, selling more than 300 points on Monday.
Stock market today
On Monday, the Dow Jones Industrial Average sold 1.1%, while the S&P 500 fell 1%. The tech-heavy Nasdaq composite was down 0.6%. And the small-cap Russell 2000 lost 1.4%.
Of the exchange-traded funds, the Nasdaq 100-tracker Invesco QQQ Trust (QQQ) fell 0.4% and the SPDR S&P 500 (SPY) fell 1%.
This week’s top earnings reports come from jabil (JBL), Cal-Maine Foods (CALM), AutoMax (KMX), cintas (CTAS), Jefferies (JEF), Micron technology (MU), Dow Jones Stocks Nike (NKE) and paychex (PAYX).
EV giant Tesla (TSLA) gained 0.25% after reversing early losses on Monday. Among Dow Jones stocks, Apple (AAPL) rose 0.2%, while Microsoft (MSFT) lost 0.2% in today’s stock market.
In the ongoing weakness in the stock market, Double Verify (DV), Hostess Brands (TWNK), Neurocrine Life Sciences (NBIX), toro (TTC) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Keep in mind that the deepening of the stock market correction is a good reason for investors to stay on the sidelines.
DoubleVerify is an IBD Leaderboard stock. Hostess and Toro were featured in this week’s Stock Near A Buy Zone column.
Dow Jones Futures Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s opening, Dow Jones futures were up 0.1% relative to fair value, while S&P 500 futures rose slightly higher. Nasdaq 100 futures gained 0.1% below fair value. Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
The 10-year yield rose to 3.87% on Monday and reached another new high. The 10-year government bond yield is at its highest level since April 2010, when it peaked at around 4.01%. Meanwhile, US oil prices remained lower on Monday, falling nearly 3%. West Texas Intermediate futures traded below $77 a barrel, the lowest level since early January.
What to do in the deteriorating stock market correction?
Amid continued selling in major stock indices, IBD’s market trend remains in a “market in correction”. That means investors should be defensive and on the sidelines.
To prepare for a new stock market rally, investors have to wait for a follow-up day. When the market is in a correction, look for at least one major index to try a bottom. We are still looking for the first day the index closes higher counts as day 1 of its attempted rally. The action on Day 2 and Day 3 is irrelevant as long as the index does not fall below its latest low. If that low is undercut, the rally attempt is over and the market must try again.
On Day 4 and beyond, expect the Nasdaq or S&P 500 to rise sharply in volume higher than the previous session. That’s a follow-up day. It gives investors the green light to buy leading stocks that are past the appropriate buying points. It should align your portfolio and mindset with the stock market action by gradually allocating capital to leading stocks.
Nevertheless, it is important for investors to make good use of this downtime. This is an ideal opportunity to study the bottom of the market and build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out on or near the follow-through, the market bottom signal. Missing that early opportunity can be a costly mistake.
Monday’s Big Picture column noted: “At one point, the Nasdaq composite was up 1.4%. It turned out to be a mirage as stock market indices quickly faded and closed with more losses. The faux rally was symptomatic for bear markets, when stocks often gain strength in the early hours, but buyers disappear toward the end.”
Five Dow Jones Stocks to Watch Now
Dow Jones Stocks to Watch: UnitedHealth
Dow Jones share UnitedHealth fell 1% on Monday, quelling the decline around the long-term 200-day line. Stocks are building a flat base with a buy point of 553.23, according to the IBD MarketSmith chart analysis. With stocks about 8% off their 52-week high, they’ve done their job for them ahead of a potential breakout.
UNH stocks show a strong 95 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 keep an eye onrent Stock Market Correction
Top Stocks to Watch: DoubleVerify, Hostess, Neurocrine, Toro, Vertex
IBD Leaderboard Shares DoubleVerify is still below the 28.07 buy point in a bottom despite Monday’s 0.55% rise. According to Leaderboard commentary, DoubleVerify has bottomed out below an early trendline near 27 and is looking for support near its 50-day line.
According to the IBD MarketSmith chart analysis, Twinkie maker Hostess Brands is in the 5% buy area above a handle cup of 23.23 buy points. Bullishly, Hostess’ RS line is on new highs. Keep in mind that the weak market trend should keep you on the sidelines, but it is one of the top stocks to keep an eye on.
Wednesday’s IBD 50 Stocks To Watch pick, Neurocrine Biosciences, is building a flat base with a buy point of 109.36. Shares finally gave up support around their 50-day line on Monday, falling 2.8%. Despite Monday’s decline, the RS line hit a new high last week, so the stock has avoided much of the market’s weakness.
Toro stocks are on a flat basis and about 6% away from a buy point of 92.05. Shares are trading just below their 50-day line after Monday’s 0.5% drop. The RS line is at new heights.
Vertex Pharmaceuticals continues to fall below the 50-day line after Monday’s loss of 2.35%. It forms a flat base with a buy point of 306.05. The stock’s resilience makes it a great idea to watch.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla shares were up 0.25% on Monday, breaking a four-day loss streak. Still, after last week’s heavy losses, equities are well below their 50-day mark.
Last week, the stock’s relative strength hit its highest level since April, but has fallen sharply in recent sessions. The stock is at about 34% from its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Of the Dow Jones stock, Apple shares rose 0.2% on Monday, ending a three-day losing streak. The stock is trading near recent lows even as the RS line hit another new high on Monday.
Microsoft lost 0.2% on Monday, finishing just outside Friday’s 52-week low. The software giant is over 30% off its 52-week high.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
YOU MAY ALSO LIKE THIS:
Top Growth Stocks to Buy and Watch
Learn how to time the market with IBD’s ETF market strategy
Find the best long-term investments with IBD long-term leaders
MarketSmith: research, charts, data and coaching all in one place
How to research growth stocks: why this IBD tool simplifies the search for top stocks