The Dow Jones Industrial Average dived 600 points Monday morning, as omicron fears ran higher in the U.S. and overseas. Moderna jumped on omicron booster news, while Apple, Nvidia and Tesla stock fell sharply at the stock market open.
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Among the Dow Jones leaders, Apple (AAPL) dropped 1.8% early Monday, while Microsoft (MSFT) was down 1.3% in today’s stock market. Home Depot (HD) is pulling back to a key level, while Nike (NKE) will report earnings after the close Monday.
Electric-vehicle leader Tesla (TSLA) traded down nearly 3% Monday. Its rival, Rivian (RIVN), lost around 3%. Lucid Group (LCID) declined over 4%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) also posted sharp losses after Monday’s open. Nio (NIO) traded down nearly 3% after introducing a new model at its Nio Day event on Saturday.
Among Monday’s top stocks to buy and watch, Arista Networks (ANET), Ryan Specialty (RYAN), Advanced Micro Devices (AMD) and Nvidia (NVDA) are in or near new buy zones. Investors should be cautious with new purchases amid the recent stock market volatility.
Microsoft and Tesla are IBD Leaderboard stocks. Arista was featured in last week’s Stocks Near A Buy Zone column, while Ryan Specialty was last week’s featured IPO Leader.
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Dow Jones Today: Omicron Fears
After the stock market open Monday, the Dow Jones Industrial Average lost 1.6%, while the S&P 500 traded down 1.3%. The tech-heavy Nasdaq composite dropped 1.5%. Small caps were taking hard early hits, with the Russell 2000 down 1.8%.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) declined 1.4% Monday, while the SPDR S&P 500 ETF (SPY) dropped 1.2%.
Elsewhere, the 10-year Treasury yield traded below 1.39% Monday morning, following its close at just above 1.4% Friday. Crude oil prices tumbled, as investors fretted over Covid impact on energy demand. West Texas Intermediate futures dropped more than 4%, to below $68 a barrel.
The Netherlands started a lockdown Sunday, with all nonessential shops, bars and restaurants closed until mid-January. The U.K. and other European governments are mulling similar steps. France and Germany have imposed new restrictions on travelers from the U.K.
On Friday, South Africa reported a much lower rate of hospital admissions during its wave of omicron infections, signaling the variant may be milder than other variants.
Stock Market ETF Strategy And How To Invest
Stock Market Rally
The Dow Jones Industrial Average and the S&P 500 posted weak performances Friday, while the Nasdaq eased from sharp, early losses to finish slightly lower. A follow-through day had shifted the market back into an uptrend on Wednesday, according to IBD’s The Big Picture. But Friday’s action was concerning.
After Friday’s session, The Big Picture commented: “The weak close for the Nasdaq 100, along with a distribution day for the S&P 500, is enough to put the stock market uptrend under pressure.”
For more daily stock market commentary, check out IBD’s The Big Picture.
Dow Jones Earnings: Nike
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares are below their 50-day line following last week’s losses. Nike shares dropped 1.3% Monday.
Late Monday, Nike will report its quarterly results. Analysts polled by Zacks see the company earning 62 cents per share, down 21% year over year, on revenue of $11.2 billion.
Stock Market Earnings: Micron
Micron Technology (MU) also will report after the close Monday. Analysts expect the company to earn $2.10 per share on sales of $7.6 billion, representing year-over-year increases of 169% and 33%, respectively.
Micron stock is tracing a cup with handle that shows a 89.15 buy point. Shares fell 0.2% Monday morning.
Stocks On The Move: Moderna
Vaccine maker Moderna (MRNA) jumped more than 8% Monday after the company said a third dose of its Covid-19 vaccine appeared to offer protection against the omicron variant. Shares closed Friday more than 40% off their 52-week high.
Five Best Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Home Depot
Home Depot stock is rapidly approaching its 50-day moving average following Friday’s 2.9% slide. Despite recent losses, Home Depot remains the top Dow Jones performer in 2021, up 46.1% year-to-date through Friday’s close. Shares were down 1% Monday.
Four Top Growth Stocks To Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Arista, Ryan, AMD, Nvidia
Arista Networks is trying to break out past a flat base’s 134.24 buy point, closing just above the entry after Friday’s 3.8% gain. ANET stock shows a strong 97 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Shares dropped 1.8% Monday.
Positively, the stock’s RS line hit a new high last week, indicating significant stock market outperformance during the recent weakness in the major stock indexes.
IPO Leader Ryan Specialty is rebounding from support at its 50-day moving average — according to IBD MarketSmith chart analysis — a key crossroads. Strong volume so far in its two-day bounce placed shares in a new buy area. The stock could also form a new base. On the downside, if the stock turns and breaches the 50-day support level, it would trigger a defensive sell signal and would likely signal a longer correction. RYAN shares were down 2.5% Monday.
Chip giants Advanced Micro Devices and Nvidia are again at their respective 50-day moving averages following Friday’s sharp losses. Strong rebounds from this support level would place the stock market leaders in new buy areas.
AMD stock moved down 1.6% Monday, threatening to add to Friday’s 0.6% decline. Meanwhile, graphics-chip maker Nvidia was down over 1%, after Friday’s 2.1% loss.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to work on a new base following the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point. Shares are below their 50-day line after finding support around the long-term 200-day moving average. Shares moved down more than 5% Monday.
Xpeng Motors triggered the round-trip sell signal from a 48.08 buy point during early December’s sharp sell-off. XPEV shares fell further below their 50-day line during Friday’s 1.2% decline and are approaching their 200-day line. Wait for the stock to form a new base, which would offer a new entry. The stock was down around 3% Monday.
Lucid Motors shares threatened to extend a losing streak to four sessions Monday, falling more than 4% in early trade. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have dwindled. Shares are trying to find support at their 50-day line.
Initial public offering Rivian dropped around 3% Monday, on pace to add to Friday’s 10.3% plunge.
RIVN shares closed Friday about 46% off their post-IPO highs, hitting a new low Friday. Continue to wait for an IPO base to form before considering a purchase. Last week’s sharp losses were a significant setback in the stock’s basing process.
Tesla Stock
Tesla stock declined about 3% Monday, on pace to give up Friday’s 0.6% gain. Last week, the stock broke down through its key 50-day support level.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Friday about 25% off its 52-week high.
TSLA shares remain sharply above a 764.55 buy point in a cup with handle. The EV giant is working on a new base, but with the stock at recent lows, the current formation needs more time develop before a correct buy point emerges.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock extended a losing streak to two sessions Friday, falling 0.65%. The stock remained about 12% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis.
Apple stock dropped 1.6% Monday.
Software giant Microsoft moved down 1.3% Monday, on pace to extend a losing streak to three sessions. Shares are battling for support around their 50-day line, but closed Friday below that key level.
On Oct. 18, Microsoft stock broke out past a flat base’s 305.94 buy point and remains about 6% past the entry amid recent losses.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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The post Dow Jones Dives 600 Points As Omicron Fears Rise; Moderna Jumps, But Apple, Nvidia, Tesla Drop appeared first on Investor’s Business Daily.
