The Dow Jones Industrial Average rose Monday morning, despite broad losses in overseas markets. Investors prepared for more inflation data with the release of the Consumer Price Index, followed by the Federal Reserve's rate policy decision this week.
Consumer inflation data is due out Tuesday morning. The CPI is expected to rise 0.3% on the month of November and 7.3% year over year. In addition, the next meeting Fed meeting takes place on Tuesday and Wednesday.
While the Fed has already heavily telegraphed a 50-basis-point hike, investors will be looking for further guidance on the Fed's plans. A pivot from aggressive tightening looks unlikely, but some respite from punishing rate hikes would be welcome.
Earnings reports this week include Coupa Software, Darden Restaurants, Lennar and Oracle.
Stock Market Today
Lam Research rose 2% after Deutsche Bank upgraded the stock to buy from hold with a new 520 price target, up from 400. Electric-vehicle giant Tesla traded down more than 2% Monday.
Among the Dow Jones stocks, Amgen pared losses to less than 1% after agreeing to acquire Horizon Therapeutics in a deal worth about $28 billion. Horizon shares soared 15%. Dow Jones tech leaders Apple and Microsoft were higher after today's stock market open.
Allegro Microsystems, IBD Leaderboard stock Dexcom, KLA and Trane Technologies — as well as Dow Jones names Caterpillar, Home Depot and UnitedHealth Group — are among the top stocks to buy and watch.
Dexcom and Trane are IBD Leaderboard stocks. Caterpillar and Home Depot were featured in last week's Stocks Near A Buy Zone column. Allegro was a recent IBD 50 Stocks To Watch pick. Caterpillar and Dexcom were recent IBD Stock Of The Day companies.
Dow Jones Today: Oil Prices, Treasury Yields
After Monday's opening bell, the Dow Jones Industrial Average rose 0.4%, while the S&P 500 gained 0.3%. The tech-heavy Nasdaq composite moved up 0.2% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust rose 0.1% and the SPDR S&P 500 ETF moved up 0.25% early Monday.
Overseas, markets across Asia ended lower in Monday's session, with Hong Kong's Hang Seng Index taking a 2.2% hit. Leading indexes in Europe's markets were under modest pressure heading into afternoon trade, with the FTSE 100 in London down 0.3% and Frankfurt's DAX showing a 0.4% decline.
The 10-year U.S. Treasury yield ticked lower to 3.53% Monday morning. Last week, the 10-year Treasury yield rebounded to 3.56% after falling to its lowest level since September.
Meanwhile, U.S. oil prices nudged higher early Monday after last week's losses saw West Texas Intermediate futures hit a new 2022 low that fell below $71 a barrel. WTI futures held just above $72 early Monday. Natural gas futures spiked more than 10% in early trade, after winter weather pointed to increased demand in Europe, and on extreme volatility in California's gas markets over the weekend.
Stock Market Rally
The stock market ended with moderate losses Friday, as the Dow Jones Industrial Average lost 0.9%, while the Nasdaq composite and S&P 500 ended 0.7% lower.
Friday's The Big Picture column commented, "The Nasdaq composite also closed at lows as it skidded 0.7%. The weekly loss was even worse here, at 4%. A crumb of comfort is that it is holding above the 50-day moving average for now. It added a distribution day Friday, though, bringing the current total to three."
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market volatility.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Caterpillar, Home Depot, UnitedHealth
Dow Jones member Caterpillar continues to drift further away from a cup base's 238 buy point, according to IBD MarketSmith pattern recognition, in the wake of Friday's 1.6% decline. CAT stock rose 0.4% Monday.
CAT stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.
Home improvement retailer Home Depot ended Friday about 3% below a cup-with-handle base's 329.77 buy point. HD stock traded up 0.6% Monday.
Health care giant UnitedHealth Group is tracing a flat base that features a 558.20 buy point. Shares are just 3% away from the latest entry. UNH stock was up 0.65% early Monday.
4 Top Growth Stocks To Watch In The Current Stock Market Rally
Top Stocks To Buy And Watch: Allegro, Dexcom, KLA, Trane
Allegro Microsystems ended Friday in buy range past a cup-with-handle's 32.07 buy point following the day's 2.5% rally. ALGM stock traded down 0.5% Monday.
IBD Leaderboard stock Dexcom is trying to break out past a 123.46 buy point in a flat base and is just below the entry. Dexcom stock was up 1% early Monday.
Chip leader KLA is holding just above a cup-with-handle's 392.60 entry after Friday's 0.65 fall. Bullishly, the relative strength line continues to make new highs in the ongoing market volatility. KLA shares dropped 0.3% Monday.
Trane Technologies ended Friday about 2% below a 181.72 buy point in a cup with handle after the session's 1% climb. Shares were down more than 1% Monday morning after BofA Securities downgraded the stock from neutral to underperform.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock moved up 3.2% Friday, snapping a four-day losing streak. Even after the session's gains, Tesla shares ended the week down more than 8%.
Despite the losses, the stock is holding above its 52-week low price, set in mid-November. Shares are about 56% off their 52-week high. Meanwhile, the stock appears to be seeing some resistance around the 200 price level, which is a key area to watch if the stock is able to mount another rally attempt. For now, it appears the stock could be heading for a test of its 2022 low.
Shares moved down 2.6% Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 0.3% Friday, finding resistance at its key 50-day line. The 50-day line, which had been a key support level, has switched into an area of resistance to monitor. The stock is about 22% off its 52-week high. Apple stock traded up 0.3% Monday.
Microsoft declined 0.8% Friday, as shares continue to hold support at the 50-day line. The software giant remains around 30% off its 52-week high. Microsoft shares rose 1.3% early Monday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
