The Dow Jones Industrial Average rose 100 points Monday morning, but Apple stock retreated after the company warned it has reduced iPhone 14 production due to Covid-19 restrictions in China.
Stock Market Today: Earnings Season Continues
Key earnings reports this week include Diamondback Energy, Disney, DoubleVerify, D.R. Horton, Lyft, Mosaic, Occidental, Roblox and Shockwave Medical.
Costco dropped 1.3% Monday after Wells Fargo downgraded the stock from overweight to equal weight. Meta Platforms jumped 5% after a Wall Street Journal report indicated the company is planning to announce layoffs this week.
Electric-vehicle giant Tesla traded down more than 2% Monday morning. Dow Jones tech leaders Apple and Microsoft were mixed after today's stock market open.
Among the top stocks to buy and watch are Arista Networks, Cheniere Energy, Dollar General and Pure Storage — as well as Dow Jones stocks Chevron and UnitedHealth. Keep in mind that the now-struggling stock market rally is a reason for investors to play more defense.
Cheniere is an IBD Leaderboard stock. Pure Storage was featured in last week's Stocks Near A Buy Zone column, along with three other top stock ideas. Pure Storage was also recently an IBD Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
After Monday's opening bell, the Dow Jones Industrial Average rose 0.2%, while the S&P 500 moved down 0.1%. The tech-heavy Nasdaq composite lost 0.35% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust traded down 0.4%, and the SPDR S&P 500 ETF fell 0.1%.
The 10-year Treasury yield fell to 4.15% Monday morning, threatening to snap a three-day win streak. Meanwhile, U.S. oil prices traded down slightly. Last week, West Texas Intermediate futures hit their highest point since mid-October. WTI futures traded just below $92 a barrel.
Stock Market Rally Struggles
On Friday, the Dow Jones Industrial Average rallied 1.3%, while the S&P 500 gained 1.4%. The tech-heavy Nasdaq composite climbed 1.3.
Friday's The Big Picture commented, "While the market is now over the painful Fed meeting speed bump, yet more challenges are ahead for the coming week. On Thursday, the latest Consumer Price Index data is due. This will cover the October period. In addition, the midterm elections are set to take place. With President Joe Biden suffering from poor approval ratings, a split Congress or even a red wave where the Republicans seize both chambers could be in the offing. Markets tend to rally following the midterms."
Now is an important time to read IBD's The Big Picture column. Following recent selling, investors should be more focused on playing defense than buying breakouts.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Merck, UnitedHealth
Dow Jones member and IBD 50 stock Merck remains out of buy range past a double-bottom base's 93.12 buy point, according to IBD MarketSmith pattern recognition. Merck shares dropped 0.7% Monday.
Health care giant UnitedHealth is trying to break out past a cup with handle's 553.23 buy point, according to IBD MarketSmith. Shares pared losses to 1% Friday, holding below their latest entry. UNH stock traded a fraction lower Monday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Watch: Arista, Cheniere, Dollar General, Pure Storage
IBD Leaderboard watchlist stock Arista Networks is trying to break out past a buy point at 132.97 amid Friday's 7.2% surge. Shares inched lower Monday morning.
IBD Leaderboard stock Cheniere Energy declined 3% Friday, falling about 4% below a 178.69 buy point in a cup with handle. Look for a decisive retake of the entry before purchasing shares. LNG shares moved up 0.5% Monday.
Dollar General fell further below a 259.75 buy point in a cup base, as DG shares lost 0.5% Friday, falling for a fifth straight day. Now, the stock will look for support around its 50-day line. DG shares were up 0.2% early Monday.
Recent IBD Stock Of The Day, Pure Storage, broke out last week past a 31.62 buy point, but fell further below that entry during Friday's 0.5% decline. The stock was up a fraction Monday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock skidded 3.6% on Friday, barely holding above their recent lows, about 50% off their 52-week high and sharply below their 50- and 200-day moving average lines.
Shares of the EV giant moved down 2.4% Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 0.4% Friday, falling for a fifth straight day. The stock tumbled more than 11% last week. Apple stock traded down 1.4% Monday after its iPhone production warning.
The company said, "We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products."
Microsoft rebounded 3.3% Friday, snapping a four-day skid and rallying from its 52-week low. The software giant is about 37% off its 52-week high. Microsoft shares rose 0.75% Monday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
