Futures: Stocks are up, but the main signal is missing

Dow futures rose ahead of Tuesday’s open after the Dow Jones Industrial Average rose more than 550 points on Monday. Netflix earnings were announced late Tuesday, and Tesla’s earnings are scheduled for Wednesday.


But, first, Dow Jones stock Goldman Sachs (p) and Johnson & Johnson (JNJ) will report back early Tuesday.

Stock Market Today: Bank of America Earnings Charles Schwab

On Monday, the Dow Jones Industrial Average rose 1.9% and the Standard & Poor’s advanced 2.65%. The technology-heavy Nasdaq Composite is up 3.4%. Small cap Russell 2000 rose 3.2%.

Among the exchange-traded funds, the Nasdaq 100 index-tracked Invesco QQQ Trust (QQQ) rose 3.3% and the SPDR S&P 500 (SPY) rose 2.5%.

American bank (BAC) and Charles Schwab (SCHW) announced its quarterly results Monday morning. Shares of BBK jumped 6.1%, while shares of Charles Schwab sold 2.25%.

Giant EV Tesla (TSLA) is up 7%, rebounding from Friday’s big slide. Among Dow Jones stocks, apple (AAPL) up 2.9% and Microsoft (MSFT) is up 3.9% in the stock market today.

AutoZone (to avoid), Cardinal’s health (CAH), Molina Healthcare (Ministry of Health) and Vertex Pharmaceuticals (VRTX) – as well as shares of Dow Jones chevron (CVX) and merck (MRK) – Among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time when investors sit on the sidelines and build watch lists of the top growth stocks.

Cardinal Health and Vertex are IBD Leaderboard shares. Merck and Molina Healthcare appeared in this week’s Stocks Near A Buy Zone column, along with two other top stock ideas.

4 growth stocks to watch at Cursstock market correction

Dow futures today: Treasury yields, oil prices

Before the opening bell on Tuesday, Dow Jones futures were up 0.5%, while S&P 500 futures were up 0.55%. Nasdaq 100 futures are up 0.5% against fair value. Remember that the overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield rose to 4.01% to close above 4% for the second consecutive session. Meanwhile, US oil prices extended losses from Friday’s fall, retreating on Monday. West Texas Intermediate crude futures were trading at less than $86 a barrel.

Q3 earnings season

Third-quarter earnings season heats up this week, with key reports coming in Lockheed Martin (LMT), Netflix (NFLX), Procter & Gamble Company (PG), travelers (TRV), Alcoa (AA), IBM (IBM), Tesla, American Express (AXP) and Verizon Communications (VZ), along with a number of other notable companies.

Earnings reports cause many of the biggest moves in stocks, and require special attention. Strong earnings can push big stocks to previously untouched levels – and above new buying points – while a less-than-impressive announcement can send stocks lower.

The stock market’s reaction to the earnings release can often tell you more than the earnings themselves. If the results look strong but the stock is falling anyway, investors may be concerned about the sustainability of growth, higher costs, or other potential downsides.

With the market entering the mode of trying to rise, investors should track companies that are easily outperforming earnings results and have strong bullish reactions. They could be among the stock market leaders if the market is able to recover.

What to do in the stock market today: look for this key signal

Despite the big gains made on Monday, the market trend is still correcting amid sharp losses in recent sessions. Investors remain on the lookout for the follow-up day, which is the main signal that could lift the market direction into a confirmed uptrend. The Nasdaq and S&P 500 could launch this trend change day on Tuesday (the fourth day of the current rally attempt) at the earliest. With the trend of IBD “market correcting” investors are safer on the sidelines.

Now is the perfect time to build a solid watch list for high performing stocks. Many long-term leaders tend to breakout on or near the follow-up day, which is the market’s signal to a bottom. Missing this early opportunity can be a costly mistake.

Friday’s big picture column commented, “Technically, a bullish attempt is intact but a reversal reduces the odds for a bullish follow. The 21-day exponential moving averages remain strong resistance, so investors should be watching when buyers return.”

Five Dow Jones stocks to watch right now

Dow Jones stocks to watch: Chevron, Merck

Energy giant Chevron continues to consolidate above the 50-day line, building a base showing 182.50 buying points. An early entry at 166.93 is also in play. Chevron stock rose 0.7% on Monday.

CVX stock boasts a solid 98 rating of the 99 perfect IBD compounding rating, according to an IBD stock review. Investors can use the IBD composite rating to easily gauge the quality of a stock’s fundamental and technical metrics.

Dow Jones Member and Merck IBD 50 stock breaks through the 93.12 buy point for the double bottom, According to IBD MarketSmith Pattern Recognition. Shares rose 2.1% on Monday, to close above the buying point. Keep in mind that a continuous correction in the market is a reason to remain neutral; However, the stocks are showing abnormal signs of strength. The RSI line reached a new high last week. Third-quarter earnings results are due on October 27, before the opening bell.

Top stocks to watch: AutoZone, Cardinal, Molina, Vertex

A leading auto parts and stock IBD company today, AutoZone is about 3% away from its 2362.34 cup base purchase point. Keep an eye out for a potential handle to offer a lower entrance. AutoZone shares rose 1.5% on Monday.

IBD Leaderboard stock and medical pioneer Cardinal Health form a flat base with 72.38 buying points, according to IBD MarketSmith chart analysis. Dividends are due November 4th.

Molina Healthcare ended Monday just 2% below 361.35 buying points from a flat base. The stock’s RS line hit a new high last week, confirming that the healthcare stock is the leader to watch.

Leading biotech company Vertex Pharmaceuticals continues to build a flat base with a buy point of 306.05 and an early entry at 296.90. Its RS line has hit a new high in recent sessions, which is a sign of an outperformance in the stock market.

Netflix earnings

Netflix earnings are due on Tuesday after the stock market closes. The streaming giant’s adjusted EPS ratio is expected to drop 33% to $2.14 on revenue of $7.83 billion.

Netflix shares are building a double bottom base with 250.49 buy points. The stock is about 65% off its 52-week high.

Join IBD experts as they analyze the leading stocks in an attempt to rise the current stock market on IBD Live

Tesla Stock

Tesla stock is up 7% on Monday, almost erasing Friday’s 7.55% drop. Shares closed on Friday at their lowest level since June 2021. Despite Monday’s rally, the stock is still off a 52-week high by about 47%.

Third-quarter results from the electric car giant late Wednesday. Tesla is expected to earn $1.01 per share on adjusted sales of $22.1 billion.

Dow Jones Leaders: Apple and Microsoft

Among Dow Jones stocks, Apple shares rose 2.9% on Monday, rebounding from a massive sell-off of 3.2% on Friday. With that said, shares are down nearly 23% from 52-week highs and 50- and 200-day lows.

Microsoft advanced 3.9%, continuing its recovery from last week’s 52-week low. The software giant is about 32% from its 52-week high.

Apple earnings are expected on October 27, while Microsoft is due on October 25.

Make sure to follow Scott Lehtonen on Twitter at Tweet embed Learn more about developing stocks and the Dow Jones Industrial Average.

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