Dow Jones futures dropped Monday morning, as investors prepared for the start of second quarter earnings season. Twitter shares tumbled while Tesla stock rose after Elon Musk took steps to terminate his $44 billion takeover deal of the social media giant.
Looking ahead to this week’s earnings, soda giant PepsiCo (PEP) will report second-quarter results after the close. Delta Air Lines (DAL) will report Wednesday. Banking giants JPMorgan Chase (JPM) and Morgan Stanley (MS), along with Taiwan Semiconductor Manufacturing (TSM) will report Thursday morning. Citigroup (C), UnitedHealth (UNH) and Wells Fargo (WFC) wrap up the trading week with earnings reports on Friday morning.
Twitter (TWTR) tumbled more than 5% in Monday’s pre-market after Musk said he is seeking to terminate his $44 billion deal for the social media giant due to the number of spam and fake accounts on the platform. Twitter said it plans legal action and is committed to closing the transaction at the agreed-upon price of $54.20.
Tesla (TSLA) traded up around 1% early Monday. Lululemon Athletica (LULU) declined more than 4% in early trading after Jefferies downgraded the stock from ‘Hold’ to ‘Underperform’. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) both traded squarely lower ahead of today’s stock market open.
In a volatile stock market environment, Dow Jones leaders Johnson & Johnson (JNJ), Merck (MRK) and UnitedHealth (UNH) — as well as BJ’s Wholesale Club (BJ), Evolent Health (EVH), Funko (FNKO) and Quanta Services (PWR) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.
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Evolent Health and UnitedHealth are IBD Leaderboard stocks. BJ’s is an IBD 50 stock. Evolent was IBD’s Stock Of The Day on Wednesday and BYD was featured in last week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices
Before Monday’s open, Dow Jones futures fell 0.6% vs. fair value, and S&P 500 futures lost 0.8%. Nasdaq 100 futures slid 0.8%. Remember that overnight action in Dow 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 0.8%. The SPDR S&P 500 ETF (SPY) fell 0.7%.
The 10-year Treasury yield jumped to 3.1% Friday after the stronger-than-expected jobs report. The 10-year yield ticked lower to 3.05% Monday morning.
Meanwhile, U.S. oil prices dropped more than 2%, with West Texas Intermediate trading just above $102 per barrel. WTI fell as low as $95 per barrel last week.
Stock Market Rally
On Friday, the Nasdaq inched 0.1% higher, giving it a five-session win streak. It ended the week up 4.6% and managed to edge past the 10-week moving average as well. Nevertheless, it remains down almost 26% for the year.
Friday’s The Big Picture column commented, “One crumb of comfort for investors is the fact that low volume and sluggish moves kept the distribution day count steady. Optimists will point to indexes holding weekly gains, but continued volatility looks likely.”
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.
Four Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Johnson & Johnson, Merck, UnitedHealth
Dow Jones leader Johnson & Johnson is about 2% below a double-bottom base’s 181.84 buy point following Friday’s 0.1% fall, according to IBD MarketSmith chart analysis. JNJ shares were unchanged Monday morning. The company reports earnings on July 19.
Drug giant Merck edged lower Friday, and is about 2% below its flat base’s 95.02 buy point. Medical stocks in general, and biotechs in particular, have shown rising strength in recent stock market action. Merck shares traded flat early Monday.
Health insurance giant and IBD Leaderboard stock UnitedHealth remains above its double bottom’s 507.36 buy point after Friday’s 0.8% rise. Shares are in buy range. The stock was unchanged Monday morning. UNH reports second-quarter results on July 15.
UNH stock shows a strong 96 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 Rally
Top Stocks To Watch: BJs, Evolent Health, Funko, Quanta
IBD 50 stock BJ’s Wholesale is in a buy range above a cup-with-handle base’s 67 buy point in the wake of last week’s breakout move. Shares were unchanged early Monday.
IBD Leaderboard stock Evolent Health remains in buy range above a 32.55 buy point in a cup with handle after Friday’s slight gain. The 5% chase zone runs up to 34.18. Evolent shares were flat Monday.
Funko closed in buy range above a cup-with-handle’s 25.18 buy range following Friday’s 0.3% climb. Funko stock boasts a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup. Shares traded unchanged early Monday.
Quanta Services is tracing a cup with handle that has a 138.56 buy range, according to IBD MarketSmith chart analysis. Shares are just 4% away from the latest buy pivot after Friday’s 0.2% fall. PWR shares were flat Monday morning.
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Tesla stock raced 2.5% higher Friday, rising for a second straight session and regaining its key 50-day line. Shares added to those gains Monday morning, moving up about 1% after CEO Elon Musk backed away from his Twitter bid.
Shares remain sharply below their 200-day line ahead of the company’s July 20 earnings date. Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 40% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 0.5% Friday, climbing for a fifth straight session. Apple reclaimed its 50-day line last week, but remains far below its long-term 200-day line. The stock is about 20% off its 52-week high. Apple shares moved down 0.7% Monday morning.
Software leader Microsoft fell 0.3% Friday, but is still holding above its 50-day line. The stock closed about 23% off its 52-week high. Microsoft shares lost 0.5% early Monday.
Microsoft and Apple are due to report quarterly results on July 26 and 28, respectively.
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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