Dow Jones futures were higher before the open on Tuesday after the Dow Jones Industrial Average snapped its two-day winning streak on Monday. The top six stocks to buy and watch include hot IPO stocks Mobileye (Bly).
Early Tuesday, the producer price index (PPI) will come out at 8:30 am ET. PPI is expected to rise 0.5% in October vs. the previous month. And wholesale inflation is expected to jump 8.3% from a year ago.
third quarter earnings season continues this week, with key reports coming from Dow Jones stocks Cisco Systems (CSCO), Home Depot (HD) and Walmart (WMT), and Applied Materials (great), Kohl’s (KSS), Lowe’s (low), Macy’s (M), Nvidia (NVDA), Palo Alto Networks (PED) and market (TGT).
Stock market Today
On Monday, the Dow Jones Industrial Average lost 0.6%, or 211 points, and the S&P 500 fell 0.9%. The tech-heavy Nasdaq Composite sold off 1.1%.
Among the top stocks to buy and watch, IBD Leaderboard stock Arista Network (SIDE), IBD SwingTrader stock General Motors (GM), GlobalFoundries (GFS), Mobileye and Phillips 66 (PSX) – also the name of Dow Jones caterpillar (CAT) – is among the top stocks to buy and watch.
Arista Networks is IBD Leaderboard watch the stock this is also reviewed in last week’s Stock Near A Shop Zone column, along with three other top stock ideas. General Motors is one IBD SwingTrader stock. And Mobileye was last week’s feature Leader of the IPO.
Dow Jones Futures Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s door bell, Dow Jones futures rose 0.2% vs. fair value, while S&P 500 futures moved up 0.25%. Tech-heavy Nasdaq 100 futures were up 0.35% vs. fair value. Remember that the action is overnight Dow Jones futures and elsewhere should not translate into actual trading in the next regular stock market session.
The 10-year Treasury yield was higher at 3.86% Monday, recovering a small portion of last week’s plunge. Meanwhile, US oil prices fell more than 4% as West Texas Intermediate futures traded just above $85 a barrel.
What to Do in a Stock Market Rally
Now is an important time to read IBD’s The Big Picture column after the stock market trend transitions from “uptrend under pressure” to “confirmed uptrend”.
At this point, it’s important to be flexible. Despite the recent gains, investors should maintain a cautious attitude, limiting exposure to no more than 40%. Await further confirmation of sustained power before adding more exposure. Direct distribution would be a sign to remain more defensive.
If your recent stock purchases continue to make progress, then you should feel more confident in the stock market rally. But sharp reversals and losing trades will certainly be a sign that your powder is still dry.
Dow Jones Stocks to Watch: Caterpillar
Top Stocks to Buy and Watch: Arista, GM, GlobalFoundries, Mobileye, Phillips 66
Automaker and IBD SwingTrader General Motors shares gave up cup-with-handle’s 40.20 buying points during Monday’s 2.8% drop. If the stock retakes the entry, the buying area tops out at 42.21.
The latest stocks from IBD Today GlobalFoundries was trading about 1% away from a 66.06 sell point on the cup base after rising 0.4% on Monday.
Leader of the IPO Mobileye broke above an IPO’s base of 29.96 buying points, according to MarketSmith’s IBD pattern recognition, but used to return below Monday and return below it. The 5% chase zone will come out at 31.46.
Monday’s IBD 50 Stocks To Watch pickPhillips 66, has broken out through our cup-and-handle language 110.08 buy points. Stocks broke out Friday, but gave up part of their gains Monday. The stock is in a 5% buy zone, which reached 115.58.
Tesla shares declined 2.6% Monday, snap a two-day winning streak and erase Friday’s gains.
The stock is more than 50% off its 52-week high and below its 50- and 200-day moving average lines.
Dow Jones Leaders: Apple, Microsoft
In between Dow Jones stocks, Apple shares fell 0.4% Monday, but still holding above their recently recaptured 50-day line. The stock is about 20% off its 52-week high.
Microsoft declined 2% Monday, giving back all of Friday’s gains. The stock ended the session’s slide at the 50-day line. The software giant remains more than 30% off its 52-week high.
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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