Dow Jones futures dropped Tuesday morning, as both the 10-year Treasury yield and U.S. oil prices tumbled on rising recession fears. Currencies were also active, with the euro briefly dipping its closest to parity with the U.S. dollar since 2002.
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Soda giant PepsiCo (PEP) reported better-than-expected second-quarter results early Tuesday. The company also raised its revenue outlook for the year. PepsiCo shares added more than 1% in morning trade.
American Express (AXP) dropped more than 2%, weighing heavy on the Dow following an analyst downgrade. Retailer Gap (GPS) shed nearly 6%, as chief executive Sonia Syngal suddenly stepped down, and Wells Fargo downgraded the stock.
Tesla (TSLA) traded slightly higher early Tuesday. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) both edged a fraction 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. Quanta was Thursday’s Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
Before Tuesday’s open, Dow Jones futures fell 0.6% vs. fair value, and S&P 500 futures lost 0.3%. Nasdaq 100 futures rose 0.2% in morning trade. Peloton (PTON) led the Nasdaq 100, up more than 7% after announcing it would shutter its in-house manufacturing operations.
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 a fraction lower. The SPDR S&P 500 ETF (SPY) fell 0.5%.
The 10-year Treasury yield tumbled to 2.92% Tuesday morning, deepening Monday’s drop to 2.99%. Meanwhile, U.S. oil prices slid nearly 5% in early action, with West Texas Intermediate trading just above $99 per barrel. WTI fell as low as $95 per barrel last week.
Stock Market Rally
On Monday, the Nasdaq closed 2.3% lower, the S&P 500 fell 1.2% and the Dow Jones Industrial Average lost 0.5%. Small caps also sold off, with the Russell 2000 losing 2.2%.
Monday’s The Big Picture column commented, “Bears stomped back into the stock market Monday as apprehension built for the first wave of second-quarter earnings and inflation reports coming out this week.”
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 remains about 2% below a double-bottom base’s 181.84 buy point, according to IBD MarketSmith chart analysis. The company reports earnings on July 19. JNJ shares edged lower Tuesday morning.
Drug giant Merck rallied 1.6% Monday, and is right 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 down a fraction early Tuesday.
Health insurance giant and IBD Leaderboard stock UnitedHealth remains above its double bottom’s 507.36 buy point after Monday’s 0.3% fall. Shares are in buy range. UNH reports second-quarter results Friday morning. The stock was unchanged Tuesday morning.
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 moving higher in the 5% buy range above a cup-with-handle base’s 67 buy point following Monday’s 1.6% rise. The stock’s RS line is at new highs, which is a sign of big stock market outperformance. Shares were unchanged early Tuesday.
IBD Leaderboard stock Evolent Health dropped below its 32.55 buy point in a cup with handle during Monday’s 5.8% slide. Evolent shares were flat Tuesday.
Funko closed in buy range is now about 5% below a cup-with-handle’s 25.18 buy range after Monday’s 6.1% tumble. Funko stock boasts a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup. Shares traded down more than 1% early Tuesday.
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 entry after Monday’s 0.6% fall. PWR shares were flat Tuesday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock skidded 6.55% Monday, snapping a two-day win streak and giving up its 50-day line. Shares looked to take back some of those losses Tuesday morning, trading slightly higher.
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 43% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares slid 1.5% Monday, snapping a five-day win streak. Apple reclaimed its 50-day line last week, but is now testing that key level. Shares remain far below their long-term 200-day line. The stock is about 20% off its 52-week high. Apple earnings are due out July 28. Apple shares shook off early losses and rose a fraction Tuesday morning.
Microsoft fell 1.2% Monday, but is still holding above its 50-day line. The stock closed about 24% off its 52-week high. The software giant will report quarterly results on July 26. Microsoft shares lost 0.1% 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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