The Dow Jones Industrial Average rose more than 300 points Monday morning to kick-start the fourth quarter of 2022. Tesla shares fell after the company reported record third-quarter vehicle deliveries on Sunday, but they came in well below the displays.
Acuity brands (AJI), Conagra Brands (CAG), Zodiac Signs (STZ) and McCormick (MKC) are among the top earnings reporters this week.
Electric driving leader Tesla (TSLA) was trading nearly 7% lower on Monday. technical titans Apple (AAPL) and Microsoft (MSFT) were higher after today’s stock market open. Chevron (CVX) was one of the best performing Dows, rising nearly 5% as US oil prices rose.
In the ongoing weakness in the stock market, Double Verify (DV), Hostess Brands (TWNK), Neurocrine Life Sciences (NBIX), toro (TTC), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Keep in mind that the ever-deepening stock market correction is a time for investors to sit on the sidelines and chart watch lists.
DoubleVerify and Vertex are IBD Leaderboard stocks. Hostess and Toro were featured in last week’s Stock Near A Buy Zone column. Neurocrine Biosciences was a recent IBD stock of the day.
Dow Jones Today: Treasury Yields, Oil Prices
After Monday’s opening bell, the Dow Jones Industrial Average rose 1.1%, while the S&P 500 rose 0.8%. The tech-heavy Nasdaq Composite gained 0.3% in the morning action.
Of the exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.3% and the SPDR S&P 500 ETF (SPY) rose 0.8%.
The yield on 10-year Treasuries fell sharply to 3.69% on Monday morning. Last week, the 10-year yield was briefly above 4%, which hadn’t happened in over a decade.
Meanwhile, US oil prices rose 6% on Monday as West Texas Intermediate futures traded at $84 a barrel. Last week they fell to their lowest level of the year. OPEC+ will meet on Wednesday to consider a production cut to support falling oil prices.
Stock Market Correction
On Friday, the Dow Jones Industrial Average sold 1.7%, while the S&P 500 closed 1.5%. The Nasdaq composite also lost 1.5%. Market averages have now fallen for the third consecutive quarter for the first time since 2009. Meanwhile, the Dow and S&P 500 posted their biggest monthly losses since March 2020.
Friday’s Big Picture column noted, “The blue chip index closed at levels last seen in November 2020, when it plunged 1.7% for the day and 2.9% for the week. ended September at nearly 9% and has now fallen in each of the past three weeks. Nike (NKE) was by far the worst performer, with a 12.8% decline in quarterly results.”
With the major stock indices at new correction depths, investors are still looking for another attempt at rallying. Amid the ongoing sales, investors should stay in cash.
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 next day, the signal of a trough. Missing that early opportunity can be a costly mistake.
Five Dow Jones Stocks to Watch Now
Dow Jones Stocks to Watch: UnitedHealth
Dow Jones stock UnitedHealth remains above its long-term 200-day mark. Stocks are building a flat base with a buy point of 553.23, according to the IBD MarketSmith chart analysis. The stock’s resilience – its relative strength line hit a new high on Friday – made it the IBD 50 Stocks To Watch pick on Tuesday. The stock rose 0.7% Monday morning.
UNH stocks show a solid 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, WWE
IBD Leaderboard stock DoubleVerify closed just below the 28.07 buy point in a low after Friday’s 1.5% drop. Per Leaderboard comment, DoubleVerify found support near its 50-day line and has a relative strength line at new highs. The stock was down 0.8% on Monday.
Twinkie creator Hostess Brands is sticking to its 23.23 buy point from a handle cup, according to IBD MarketSmith chart analysis. Bullish, Hostess relative strength continues to hit 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. The stock rose 0.5% on Monday.
Neurocrine Biosciences is still building a flat base with a buy point of 109.36. Shares resolutely retook their 50-day line during Friday’s 3.4% jump. The RS line reached a new high last week. The stock lost 0.4 percent on Monday.
Toro stocks are on a flat basis and about 5% off a buy point of 92.05. Shares fell further below their 50-day line after falling 0.4% on Friday. The RS line is at new heights. Toro shares were up 0.6% Monday.
Vertex Pharmaceuticals resolutely regained its 50-day line last week, forming a flat base with a buy point of 306.05 and an early entry at 296.24. The stock’s resilience makes it a great idea to watch. The stock rose 0.4 percent on Monday.
World Wrestling Entertainment continues to build a flat base with a 75.33 entry. The stock is back above the 50-day line and about 7% from the buy point. WWE shares rose 0.85% early Monday.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla stock fell another 1.1% on Friday, closing at its lowest level since July 26. Shares are well below their 50-day line. Tesla shares fell nearly 7% Monday morning after missing delivery estimates.
Tesla delivered 343,830 EVs in the third quarter, up 42% from a year earlier and surpassing the Q1 record of 310,048. 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 Covid lockdowns.
But analysts had expected Tesla deliveries of 350,000-370,000, with a consensus of just over 360,000. Tesla mentioned an increased number of vehicles in transit. But that may reflect weaker Chinese demand, encouraging an earlier-than-usual export push out of Shanghai.
In recent weeks, the stock’s relative strength has reached its highest level since April, but has fallen sharply in recent sessions. The stock is at about 40% of their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stock, Apple shares fell 3% on Friday, extending the losing streak to three sessions and falling to its lowest level since June 30. Apple shares rose 0.5% Monday morning.
Microsoft fell 1.9% on Friday, hitting another 52-week low. The software giant is more than 33% away from its 52-week high. Microsoft shares gained 1% on Monday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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