The Dow Jones Industrial Average surged more than 600 points Tuesday, as the 10-year Treasury yield tumbled. The major stock indexes appeared set to continue Monday's stock market momentum, which hoisted the Dow Jones Industrial Average 765 points.
Acuity Brands was a key earnings mover Tuesday morning. Shares climbed about 7% after the company reported better-than-expected earnings and sales results.
Irvine, Calif.-based Rivian Automotive surged 8% in early trade after the company said it produced over 7,000 vehicles in the third quarter and was on still on track to produce 25,000 vehicles for 2022. Electric-vehicle leader Tesla traded more than 3% higher Tuesday.
Among the Dow Jones industrials, tech titans Apple and Microsoft jumped about 2% each after today's stock market open. Disney rose more than 1.5% after JPMorgan maintained its overweight rating on the stock, though it trimmed its price target from 160 to 145.
As the stock market turns up into a rally attempt, Murphy USA, Neurocrine Biosciences, Vertex Pharmaceuticals and World Wrestling Entertainment — as well as Dow Jones stock UnitedHealth — are among the top stocks to watch. Despite Monday's gains, investors should remain on the defensive.
Vertex is a recent addition to IBD Leaderboard. Murphy USA was featured in this week's Stock Near A Buy Zone column, along with three other top stock ideas. World Wrestling was a Stock Of The Day on Thursday. Neurocrine was a Stock Of The Day on Sept. 26.
Dow Jones Today: Treasury Yields, Oil Prices
After Tuesday's opening bell, the Dow Jones Industrial Average rallied 2.1%, while the S&P 500 gained 2.3%. The tech-heavy Nasdaq Composite advanced 2.7%.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was up 2.7%, and the SPDR S&P 500 ETF rose 2.3%.
The 10-year Treasury yield fell further to 3.60% Tuesday morning, extending Monday's losses. Last week, the 10-year Treasury yield briefly topped 4%, which hadn't been done for more than decade.
Meanwhile, U.S. oil prices extended Monday's gain, rising nearly 3% Tuesday, lifting West Texas Intermediate futures to near $86 a barrel. Last week, they fell to their lowest level of the year. On Wednesday, OPEC+ will meet to consider a production cut in order to help prop up falling oil prices.
Stock Market Rally Attempt
On Monday, the Dow Industrial Average turned in a bullish session with a 2.7% gain. The S&P 500 added 2.6%. The Nasdaq composite rallied 2.3%, chasing the Russell 2000's rebound of almost 2.7%.
Monday's The Big Picture commented, "IBD founder William O'Neil taught that CAN SLIM strategies do not work as well in bear markets as they do in bull markets. Buying breakouts in these conditions can be extremely risky because most stocks sell off during extended downturns."
Monday's gains kicked off a new stock market rally attempt, which is your Day 1. The action on Day 2 and Day 3 is irrelevant as long as the index doesn't undercut its latest low, from Friday. If that low is undercut, the rally try is done and the market continues to feel for a bottom.
Next, on Day 4 or later, investors should be waiting for a follow-through day. Starting Thursday (Day 4), you are looking for the Nasdaq or S&P 500 to rise sharply in higher volume than the previous session. A large enough rise in climbing volume marks a follow-through day. That would give investors the green light to start buying leading stocks breaking out past correct buy points.
Now, ahead of a potential follow-through day, is the perfect time to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through, the market bottoming signal. 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 advanced 2.1% Monday, again finding support around the long-term 200-day line. Shares are building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. Shares are about 7% from their latest buy point and face a test of resistance at the 50-day line. UNH stock moved up 0.6% Tuesday.
UNH stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock's fundamental and technical metrics.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: Murphy USA, Neurocrine, Vertex, WWE
Gas station and mini-market leader Murphy USA is building a flat base with a 303.19 buy point. Shares rallied 3.1% Monday and are approaching potential resistance at their 50-day line. A decisive retake of this level would be bullish for the stock's base-building prospects. Shares were up 1.6% Tuesday morning.
Neurocrine Biosciences, is building a flat base that has a 109.36 buy point, according to IBD MarketSmith chart analysis. Shares are just 2% away from buy point after Monday's 0.5% gain. The RS line hit a new high Friday, a bullish signal. Shares rose 1.2% Tuesday.
IBD Leaderboard stock Vertex Pharmaceuticals decisively regained its 50-day line last week. Shares are building a flat base with a 306.05 buy point and an early entry at 296.24. The stock topped the early entry during Monday's nearly 3% gain. While the weak market status may keep you on the sidelines, the stock's resilience makes it a top idea to watch. Its RS line is at new highs, a potential sign of big stock market outperformance. VRTX stock moved down 0.2% Tuesday.
World Wrestling Entertainment continues to build a flat base that has a 75.33 entry. The stock is back above its 50-day line and just 4% away from the buy point. The RS line continues to notch new highs. WWE shares rose 1% early Tuesday.
Tesla Stock
Tesla stock dived 8.6% Monday, closing at its lowest level since July 18, after the company missed estimates on vehicle deliveries over the weekend. Tesla shares rebounded 3.1% Tuesday morning.
In recent weeks, the stock's relative strength line reached its highest level since April, but has fallen sharply in recent sessions. Shares are more than 40% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 3.1% Monday, snapping a three-day losing streak. Still, shares are more than 20% off their 52-week high and below their 50- and 200-day lines. Apple stock rallied 1.8% Tuesday morning after Apple supplier Foxconn said it was "cautiously positive" on its fourth-quarter outlook.
Microsoft rose 3.3% Monday, rebounding from Friday's 52-week low price. The software giant remains more than 30% off its 52-week high. Microsoft shares rose 2% early Tuesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
