The Dow Jones Industrial Average dropped Tuesday morning after the Nasdaq sank to a two-year low on Monday. The 10-year Treasury yield is again approaching 4% as bond markets reopened after Monday's holiday.
Third-quarter earnings season gets started this week, with key results due from Dow Jones stocks JPMorgan, UnitedHealth and Walgreens Boots Alliance. But first, PepsiCo will report Wednesday morning.
American Airlines climbed more than 4% after raising its third-quarter revenue growth outlook ahead of its quarterly report Oct. 20. Zoom Video Communications fell more than 2% after Morgan Stanley downgraded the stock from overweight to equal weight, due to lack of near-term catalysts. Electric-vehicle leader Tesla traded 1% lower Tuesday.
Among the Dow Jones industrials, biotech pioneer Amgen punched up 3% after an analyst upgrade and price target hike. Blue chip tech titans Apple and Microsoft were lower after today's stock market open.
Cardinal Health, ConocoPhillips, Denbury and Vertex Pharmaceuticals — as well as Dow Jones stocks Chevron and UnitedHealth — are among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and build watchlists of top growth stocks.
Cardinal Health and Vertex are IBD Leaderboard stocks. Chevron and Conoco were featured in this week's Stock Near A Buy Zone column, along with two other top stock ideas. Vertex was IBD's Stock Of The Day on Friday.
Dow Jones Today: Treasury Yields, Oil Prices
After Tuesday's opening bell, the Dow Jones Industrial Average lost 0.3%, with Chevron falling hardest. The S&P 500 moved down 1.1%, as chipmakers and oil-related stocks crowded the bottom of the list. The tech-heavy Nasdaq composite fell 1.6% in morning action.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 0.6%, and the SPDR S&P 500 ETF fell 0.6%.
The 10-year Treasury yield ticked higher Tuesday, rising to 3.93% after settling at 3.88% on Friday. The 10-year Treasury yield is again approaching 4%, just as it did in late September.
Meanwhile, U.S. oil prices dropped about 2% Tuesday, sending West Texas Intermediate futures back below $90 a barrel. Oil prices on Monday snapped the five-day advance fueled by the OPEC+ decision to cut monthly oil output by 2 million barrels per day in November.
Stock Market Rally Attempt
On Monday, the Dow Jones Industrial Average declined 0.3% and the S&P 500 lost 0.75%. The tech-heavy Nasdaq composite sold off 1%. And the small-cap Russell 2000 shed 0.6%.
Monday's The Big Picture commented, "First, let's take a look at the Nasdaq's latest signal. The composite fell 1% and undercut its Sept. 30 low. Technically, that kills a rally attempt that started the following day. The Nasdaq also fell below the June low, which had been the bear market's nadir. The Nasdaq is now at the lowest since July 2020."
The S&P 500 held just above its own recent lows. So, the S&P 500's rally attempt remains intact, which means a potential follow-through day on that index is still possible.
Ahead of a potential follow-through day, now 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 day, which confirms a fresh uptrend. Missing that early opportunity can be a costly mistake.
One challenge to forming a watchlist during a correction is that, as you wait for a follow-through day, stock charts may change. That means some bases among your watchlist stocks may deteriorate. So updating is important.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, UnitedHealth
Dow Jones stock UnitedHealth declined 1.2% Monday, falling below its long-term 200-day moving average line. Despite the recent losses, shares are still building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. UnitedHealth reports its third-quarter results on Friday. UNH stock dipped 0.6% Tuesday morning.
Energy giant Chevron decisively reclaimed its 50-day line last week, as U.S. oil prices recovered. Shares are consolidating with a 182.50 buy point ahead of the company's Oct. 28 earnings release. Chevron shares moved down 1% early Tuesday, tracking lower with oil prices.
CVX stock boasts a strong 98 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: Cardinal, Conoco, Denbury, Vertex
IBD Leaderboard stock and medical leader Cardinal Health is shaping a flat base that has a 72.38 buy point, according to IBD MarketSmith chart analysis. Shares are also in buy range amid a first test of its 10-week moving average, per Leaderboard commentary. Earnings are due Nov. 4. Shares inched higher Tuesday.
Energy giant ConocoPhillips fell below a 118.49 buy point in a cup with handle during Monday's 1.4% slide. The stock's RS line hit a new high last week, illustrating strong stock market outperformance. Earnings are due Nov. 3. Shares moved down 2% Tuesday, its fall coinciding with the drop in oil prices.
Denbury surged 6.6%, breaking out past a cup base's 94.05 buy point, following reports that Exxon Mobil is considering a takeover. Shares are already out of the 5% chase zone that ran up to 98.75. The company will report earnings on Nov. 3. Shares lost 0.3% Tuesday.
Biotech leader Vertex Pharmaceuticals continues to build a flat base with a 306.05 buy point and an early entry at 296.90. Its RS line made a new high Monday, a sign of big stock market outperformance. VRTX stock rose 0.75% Tuesday.
Tesla Stock
Tesla stock edged lower Monday, extending a three-day losing streak. Shares are at their lowest level since early July and about 46% off their 52-week high. Tesla stock declined 1% Tuesday morning.
Shares are sharply below their 50- and 200-day lines. The EV giant's third-quarter results are due Oct. 19.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares reversed from losses to rally 0.2% Monday, halting a two-day slide. Still, shares are more than 20% off their 52-week high and below their 50- and 200-day lines. Apple stock moved down 0.4% Tuesday.
Microsoft slid 2.2% Monday, extending a losing streak to three sessions and hitting another 52-week low. The software giant is about 34% off its 52-week high. Microsoft shares slipped 0.7% early Tuesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
