Dow Jones futures turned lower Tuesday morning, as the market looked for a toehold following Monday’s stock market plunge. Security software names rallied after a strong quarterly report from Palo Alto Networks. Zoom Video stock dived almost 12% in early trade after cutting its earnings and sales outlook for the year.
Dick’s Sporting Goods (DKS), JD.com (JD), Macy’s (M), Palo Alto Networks (PANW) and Zoom Video (ZM) were key earnings movers Tuesday.
DKS shares rose around 2%. JD.com stock rallied more than 4%. Macy’s stock moved up 1.5%. Palo Alto shares surged more than 9% on better-than-expected results, triggering strong early moves from CrowdStrike (CRWD), Zscaler (ZS) and Okta (OKTA).
Electric-vehicle leader Tesla (TSLA) traded up almost 1% Tuesday morning ahead of Wednesday’s stock split. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) both moved up slightly ahead of today’s stock market open.
In the current stock market pullback, Albemarle (ALB), Arista Networks (ANET), Axcelis Technologies (ACLS) and Costco (COST) — as well as Dow Jones stocks Amgen (AMGN) and McDonald’s (MCD) — are among the top stocks to buy and watch.
Costco stock was added to IBD Leaderboard in the wake of last week’s breakout move. Arista and Axcelis were featured in this week’s Stocks Near A Buy Zone column.
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Early Tuesday, Dow Jones futures and S&P 500 futures inched lower vs. fair value, while Nasdaq 100 futures traded down less than 0.1% in morning trade. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 0.1%, and the SPDR S&P 500 ETF (SPY) inched lower in early trade.
The 10-year Treasury yield ticked lower to 3.01% early Tuesday, following Monday’s continued jump. The 10-year Treasury yield is above the 3% level for the first time since July 21.
Oil stocks helped prop the Dow and S&P 500, as U.S. oil prices moved higher Tuesday after Saudi Arabia’s energy minister said recent market volatility could make OPEC+ lower production, according to Bloomberg. Last week’s losses saw West Texas Intermediate futures touch their lowest level since January. WTI futures rose 1.7% early Tuesday, trading near $92 a barrel.
Fed chief Jerome Powell will give a speech Friday on the central bank’s economic outlook from Jackson Hole, Wyo. The Fed has raised interest rates this year in an attempt to bring down inflation but has sent increasingly mixed signals about coming increases.
Last week’s Fed minutes seemed to push back against market expectations for a dovish pivot, after a six-week stock market rally followed the June 14-15 meeting. Markets place a roughly 56% chance of a 75-basis-point rate hike on Sept 21. One week ago, there was a 39% chance.
Stock Market Pullback
On Monday, the stock market finished with heavy losses, as the tech-heavy Nasdaq composite sold off 2.55%.
Monday’s The Big Picture column commented, “Sellers came back from the weekend with a big appetite, sending the stock market indexes to a second straight day of sharp losses. After the two-session rout, investors have reason to make some defensive adjustments.”
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Amgen, McDonald’s
Dow Jones biotech stock Amgen is building a flat base that has a 258.55 buy point, amid a strong performance by biotechs so far this year. An early entry at 253.87 is also in play. For now, shares are holding above their 50-day line despite Monday’s 1.6% decline. The stock traded flat early Tuesday.
AMGN stock shows a solid 92 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.
McDonald’s shares are trading just below a 265.56 cup-with-handle entry following Monday’s losses, according to IBD MarketSmith chart analysis. MCD shares were unchanged Tuesday morning.
4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally
Top Stocks To Watch: Albemarle, Arista, Axcelis, Costco
Lithium producer Albemarle is in buy range following Monday’s retake of a large cup with handle’s 273.78 buy point. The 5% buy zone goes up to 287.47. In previous weeks, shares topped a smaller cup with handle’s 250.25 buy point. The stock was down 0.6% Tuesday morning.
Arista Networks, one of last week’s IBD 50 Stocks To Watch picks, continues to plod up the right side of a double-bottom base that offers a 143.67 buy point. With the stock about 11% away from the current entry, look for a handle to offer a more risk-optimal buy point. Arista’s RS line has been trending higher and is approaching a new high. ANET shares dropped 1.1% early Tuesday.
IBD Leaderboard stock Costco surrendered its cup with handle’s 552.81 buy point Monday, declining 1.6%. Wait for a bullish retake of the entry before buying shares. Shares inched higher early Tuesday.
Chip-equipment maker Axcelis Technologies continues to build a cup with handle that offers a 79.93 buy point, according to IBD MarketSmith chart analysis. The stock was unchanged Tuesday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla stock lost 2.3% Friday, extending a losing streak to five sessions. Shares of the EV giant moved up almost 1% Tuesday morning, looking to rebound from sharp losses in recent sessions.
Tesla stock has been wrestling to overcome resistance around its 200-day line. Tesla is about 30% off its 52-week high. Its 3-for-1 stock split is set for Wednesday.
Tesla Announces 3-For-1 Stock Split Date: Is Now The Time To Buy?
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 2.3% Monday, as the stock continues to build the right side of a cup base that has a 179.71 buy point. Another interpretation could be a large double bottom that spans back to January. Either way, the buy point is identical. The last three days of losses could be the early part of a potential handle, which would offer a lower entry.
Bullishly, the stock’s relative strength line is holding at new highs, indicating big stock market outperformance. Shares rose 0.2% Tuesday morning.
Microsoft fell 2.9% Monday, extending a losing streak to five sessions and falling further away from its long-term 200-day line. The stock inched higher early Tuesday.
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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