The Dow Jones Industrial Average rose 100 points Monday morning, but Apple stock fell after the company warned it had scaled back iPhone 14 production due to Covid-19 restrictions in China.
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This week’s key earnings reports include Diamondback Energy (CATCH), Disney (DIS), DoubleVerify (DV), DR Horton (DHI), lyft (LYF), mosaic (MOS), Occidental (OXY), Roblox (RBLX) and shock wave medicine (SAV).
Costco (COST) fell 1.3% on Monday after Wells Fargo downgraded the stock from overweight to equal weight. meta platforms (META) rose 5% after a Wall Street Journal report indicated the company plans to announce layoffs this week.
Giant of electric vehicles Tesla (TSLA) traded down more than 2% on Monday morning. Dow Jones technology leader Apple (AAPL) and Microsoft (MSFT) were mixed after the market open today.
Top stocks to buy and watch include Arista Networks (A NET), Chen energy (LNG), Dollar General (DG) and Pure storage (PSTG) – as well as Dow Jones shares rafters (CVX) and UnitedHealth (UNH). Keep in mind that the currently difficult stock market rally is a reason for investors to become more defensive.
Cheniere is an IBD leaderboard stock. Pure Storage was featured in last week’s Stocks Near A Buy Zone column, along with three other top stock ideas. Pure Storage was also an IBD stock of the day recently.
Dow Jones Today: Treasury Yields, Oil Prices
After Monday’s opening bell, the Dow Jones Industrial Average was up 0.2%, while the S&P 500 was down 0.1%. The tech-heavy Nasdaq Composite lost 0.35% in morning action.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.4% and SPDR S&P 500 ETF (SPY) was down 0.1%.
The 10-year Treasury yield fell to 4.15% Monday morning, threatening to start a three-day winning streak. Meanwhile, US oil prices traded slightly lower. Last week, West Texas Intermediate futures hit their highest level since mid-October. WTI futures traded just below $92 a barrel.
Fight for the stock market rally
On Friday, the Dow Jones Industrial Average gained 1.3% while the S&P 500 gained 1.4%. The tech-heavy Nasdaq Composite climbed 1.3.
Friday’s The Big Picture commented, “While the market is now past the painful bump from the Fed meeting, there are more challenges ahead in the coming week. The latest CPI data is due on Thursday. These will cover the October period. In addition, the midterm elections are coming up. With President Joe Biden suffering from poor approval ratings, a split Congress or even a red wave with Republicans taking over both houses could be on the cards. Markets tend to recover after the midterms.”
Now is an important time to read IBD’s The Big Picture column. After the recent selling, investors should focus more on defending than buying breakouts.
Five Dow Jones stocks to buy and watch
Dow Jones Stocks to Buy and Watch: Merck, UnitedHealth
Dow Jones member and IBD-50 stock Merck remains outside of the buy range above the buy point of a double bottom basis of 93.12, according to pattern recognition by IBD MarketSmith. Merck shares fell 0.7% on Monday.
Healthcare giant UnitedHealth is attempting to break above a cup with a buy point of 553.23, according to IBD MarketSmith. Shares pared losses to 1% on Friday, holding below their last entry. UNH shares were trading a fraction lower on Monday morning.
4 Top Growth Stocks to Watchrightde Stock market rally
Top stocks to watch: Arista, Cheniere, Dollar General, Pure Storage
Stock on IBD leaderboard watch Arista Networks is attempting to break out of a buy point at 132.97 amid Friday’s 7.2% gain. Shares fell inch by inch Monday morning.
IBD leaderboard stock Cheniere Energy was down 3% on Friday, falling about 4% below a buy point of 178.69 in a mug. Look for a crucial iteration of the entry before buying stocks. LNG shares rose 0.5% on Monday.
Dollar General fell further below a buy point of 259.75 on a cup basis as DG shares lost 0.5% on Friday, falling for the fifth straight day. Now the stock will look for support around its 50-day moving average. DG shares were up 0.2% early Monday.
The day’s latest IBD stock, Pure Storage, broke above a buy point of 31.62 last week but continued to fall below that entry during Friday’s 0.5% decline. The stock rose a fraction on Monday.
Join IBD experts as they analyze leading stocks from the current stock market rally on IBD Live
Tesla stock
Tesla stock slipped 3.6% on Friday, barely holding above its recent lows, about 50% below its 52-week high and well below its 50- and 200-day moving average lines.
Shares of the EV giant fell 2.4% on Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares fell 0.4% on Friday, falling for the fifth straight day. The stock plunged more than 11% last week. Apple stock traded 1.4% lower on Monday following the iPhone production warning.
The company said, “We now expect fewer iPhone 14 Pro and iPhone 14 Pro Max shipments than previously expected, and customers will experience longer waits to receive their new products.”
Microsoft rallied 3.3% on Friday, breaking a four-day decline and recovering from its 52-week low. The software giant is down about 37% from its 52-week high. Microsoft shares rose 0.75% Monday morning.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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