Dow Jones futures were higher ahead of Tuesday’s opening and US election results. Key inflation data, including the consumer price index, will be released later this week.
In Tuesday’s midterm elections, Republicans will almost certainly retake the House of Representatives. They seem to have an edge in winning the Senate, although that is less clear. Democrats currently hold a slim majority in the House, with Vice President Kamala Harris holding the deciding vote in the 50-50 Senate.
The consumer price index, which will be released on Thursday, is expected to rise 0.7% in October compared to the previous month. Consumer inflation is expected to rise 8% year over year.
Diamondback energy (FANG), Lyft (LYFT), Mosaic (MOS) and Shockwave Medical (SWAV) were the top reporters for earnings late Monday.
FANG shares traded a fraction lower during extended trading, while Lyft shares fell more than 16%. Mosaic shares rose higher. And Shockwave stock lost more than 5%.
Stock market today
On Monday, the Dow Jones Industrial Average was up 1.3%, or more than 400 points, and the S&P 500 gained 1%. The tech-heavy Nasdaq composite climbed 0.85%.
Of the exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 1.1% and the SPDR S&P 500 (SPY) was up 0.9%.
EV giant Tesla (TSLA) slipped 5% Monday. Among Dow Jones stocks, Apple (AAPL) traded at 0.4% and Microsoft (MSFT) rose 2.9% in the stock market today.
Among the top stocks to buy and watch, Albemarle (ALB), IBD Leaderboard Watchlist Stock Arista Networks (A NET), CF Industries (CF) and New fortress energy (NFE) — as well as Dow Jones names Merck (MRK) and UnitedHealth Group (UNH) — are among the top stocks to buy and watch.
Arista Networks is an IBD Leaderboard watchlist stock. Albemarle was featured in the Stocks Near Buy Zone column this week, along with three other top stock ideas.
4 top growth stocks to buy and watchrent Stock Market Rally
Dow Jones Futures Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s opening bell, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, rose about 0.1% relative to 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.
10-year government bond yields rose to 4.21% on Monday, extending the earnings streak to four sessions and closing at the highest level since Oct. 24. Meanwhile, US oil prices fell nearly 1% as West Texas Intermediate futures traded close to $92 a barrel. . Last week, WTI futures hit their all-time high since mid-October.
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Q3 profit Season
The third quarter earnings season continues this week, with more key reports from Disney (DIS), Double Verify (DV), DR Horton (DHI), western (OXY) and Roblox (RBLX).
Earnings reports trigger many of the biggest moves in stocks and require special attention. Strong gains could propel top stocks above new buy points and into buying zones, while a less-than-impressive announcement could send stocks tumbling below key support levels.
The stock market’s response to an earnings release can often tell you more than the earnings itself. If the results appear strong, but the stock is falling, investors may be concerned about the sustainability of growth, rising costs or other potential negatives.
With the market in rally mode, investors should follow companies that handily beat earnings results and have strong positive reactions. These stocks could be among the new leaders if the market can recover from recent losses.
What to do in the difficult stock market rally?
This is an important time to read IBD’s The Big Picture column following the transition of the stock market trend from a “confirmed uptrend” to an “uptrend under pressure”.
At this point, investors should play defense; don’t let profitable trades turn negative. As The Big Picture reiterated last week, it makes sense to keep exposure at or below 20% until the uptrend resumes.
But it’s not the time to step away completely. The uptrend is still intact, so investors can still buy breakouts, but should focus on stocks with top-notch fundamental and technical metrics.
(Check out IBD stock lists such as the IBD 50 and Stocks Near a Buy Zone for additional stock ideas.)
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones Stocks to Watch: Merck, UnitedHealth
Dow Jones member and IBD 50 shares Merck is out of buy range past the 93.12 buy point of a double bottom. The 5% buy range rose to 97.78.
Healthcare giant UnitedHealth continues to watch a cup with the handle’s 553.23 buy point, according to IBD MarketSmith, after last week’s breakout attempt. Shares were up 1.3% on Monday, closing about 1% below the stock’s latest entries.
Top Stocks to Buy and Watch: Albemarle, Arista, CF, New Fortress
Lithium producer Albemarle is building the right side of a cup base with a buy point of 308.34. Shares were up 0.5% on Monday, extending a winning streak to three sessions.
IBD Leaderboard Watchlist Stock Arista Networks is trying to get past the 132.97 buy point from a choppy base. The stock fell 0.4 percent on Monday.
CF Industries is trying to find support around the 50-day moving average amid Monday’s 1% loss. Stocks build a cup base with a buy point of 119.70, according to IBD MarketSmith pattern recognition.
New Fortress Energy is fast approaching the 63.16 buy point of a cup base. With the stock about 6% away from new highs, keep an eye out for a handle to offer a past entry. The energy leader reported results late Monday, leading to a gain of 1.5% for the day.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares slipped 5% Monday, hitting a new 52-week low and hitting the lowest level since June 2021.
Shares are more than 50% off their 52-week high and sharply below their 50- and 200-day moving averages.
Dow Jones Leaders: Apple, Microsoft
Dow Jones shares rose 0.4% on Monday, despite the company’s warning that it has cut iPhone 14 production due to Covid-19 restrictions in China. Apple stock ended a five-day loss streak but is still about 24% from its 52-week high.
Microsoft rose 2.9% on Monday, continuing its recovery from Friday’s 52-week low. The software giant remains about 35% lower than its 52-week high.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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