Futures: a new rally attempt begins; 6 Key Earning Drivers
Dow Jones futures were lower after another bid for a stock rally began on Monday, as major stock indices rebounded from new corrective lows. The 10-year Treasury yield briefly topped 3% for the first time since December 2018. Then the Federal Reserve’s two-day meeting kicks off on Tuesday.
Arista Networks (A NET), Devon Energy (DVN)Diamondback Energy (CROC), Expedia (EXPE), Mosaic (MOS) and NXP Semiconductors (NXPI) were the main drivers of earnings after the close.
Arista rebounded 4% in extended trade after strong results. Devon shares rose around 1%. FANG shares rose slightly. Expedia jumped almost 5%. Mosaic slipped about 3%. NXP shares rose about 1%.
stock market today
On Monday, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 rose 0.6%. The tech-heavy Nasdaq composite rose 1.6%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.7% and the SPDR S&P 500 ETF (SPY) rose 0.6% on Monday.
Overview of the US stock market today
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Last Updated: 4:30 PM ET on 05/02/2022
Twitter (TWTR) increased by 0.2% and You’re here (TSLA) stock rose 3.7% on Monday.
Among other Dow Jones leaders, Apple (AAPL) increased by 0.2% and Microsoft (MSFT) was trading up 2.5% in today’s stock market.
Amid a deepening stock market correction, the Dow Jones leader Merck (MRK) – with the stock IBD Leaderboard Energy Cheniere (LNG), Exxon Mobil (XOM) and World wrestling entertainment (WWE) – are among the top Monday stocks to watch.
Microsoft and Tesla are IBD stocks. Exxon and Merck were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Futures Today: Treasury Yields, Fed Meeting
After Monday’s close, Dow Jones futures were down 0.1% from fair value, while S&P 500 futures were down 0.15%. Nasdaq 100 futures fell 0.15% from fair value. Remember that overnight action on futures contracts on Dow and elsewhere does not necessarily translate into actual trading in the next regular trading session.
The 10-year Treasury yield briefly rose above 3% on Monday, before closing at 2.99%. The 10-year Treasury yield hit a new 52-week high and is at its highest level since December 2018. Meanwhile, US oil prices rebounded after steep losses, with Texas Intermediate crude trading at the above $105 a barrel.
The Fed’s two-day policy meeting begins on Tuesday. Markets expect policymakers to announce a half-point rate hike when this week’s Federal Reserve meeting ends Wednesday at 2 p.m. ET. And that should be followed by the same – if not an even bigger hike – at the next two Fed meetings.
Another attempt at a stock market rally: what to do now?
On Monday, the main stock indices hit new corrective lows before heading back up. Although one day does not make a trend, it was a step in the right direction. Monday was Day 1 of another rally attempt, which means a follow-up day may occur as early as Thursday.
Nevertheless, investors should remain on the defensive. This means avoiding new purchases until a follow-up day. For now, keep a watchlist of stocks that hold up well in a bear market. They could be among the stock market leaders in the next uptrend.
Finding the leaders of the next uptrend as the market continues to correct is a challenge. A useful method is to use the relative force line of an action. The RS line measures a stock’s price performance relative to the S&P 500. If the stock is outperforming the broader market, the RS line slopes up. If a stock is performing worse than the broader market, the line will point down.
Friday’s The Big Picture column commented: “The Nasdaq composite fell 4.2% and broke above Wednesday’s low, killing its nascent rally attempt. The index suffered its fourth consecutive weekly decline and fell of 13.2% for the month, the worst monthly decline since October 2008.”
If you are new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one of the keys to investing guidelines. IBD offers a wide range of growth stock listings, such as Leaderboard and SwingTrader.
Investors can also create watchlists, find companies close to a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones stocks to watch now
Dow Jones stocks to watch: Merck
Dow Jones drug stock Merck is below a cup with the handle’s 89.58 buy point after a brief breakout attempt last week. Shares fell 1.2% on Monday, ending around 2% below the last entry.
On the positive side, the stock’s relative strength line is reaching new highs, indicating strong stock market outperformance during the current stock market correction.
Three growth stocks to watch in the currentrent Stock market correction
Stocks to watch: Cheniere, Exxon, WWE
IBD Leaderboard Cheniere Energy stock is one of the top stocks to watch after finding support around its 50-day moving average on Monday. Stocks are carving a flat base that shows a buy point of 149.52, according to chart analysis from IBD MarketSmith.
Last week, energy giant Exxon Mobil added a handful to a cup base, moving the correct buy point from 91.61 to 89.90. Shares reversed after early losses to climb 1.4% on Monday. Exxon’s stock is about 4% off new entry.
World Wrestling Entertainment remains below its 50-day moving average despite rising 2.4% on Monday. A decisive rally in the 50-day benchmark would be bullish for the stock’s outlook. Meanwhile, shares are just below a buy point of 60.94 in a handle cup.
Join IBD experts as they analyze the top stocks of the current market correction on IBD Live
Tesla stock rose 3.7% on Monday after the stock broke through its 50- and 200-day moving averages in last week’s 13% drop. The shares finished just below their 200-day line.
Shares of the electric vehicle giant ended Monday about 22% off the buying point of 1,152.97 on a cup-and-handle basis. The stock traded as high as 1,243.49 on Nov. 4 and is about 27% off that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares reversed after heavy losses on Monday, rising 0.2%. The stock is still below its long-term 200-day line.
Software leader Microsoft rebounded 2.5% on Monday, recovering some of Friday’s 4.2% slippage. The shares are significantly below their 50 and 200 day lines. The stock closed about 20% off its 52-week high.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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