The Dow Jones Industrial Average rallied more than 600 points before paring gains Tuesday as Goldman Sachs and Johnson & Johnson reported earnings results and global markets posted healthy gains. Netflix earnings are due after market close.
Stock market today: The reporting season continues
The third quarter earnings season continues with results from Dow Jones stocks Goldman Sachs (GS) and Johnson&Johnson (JNJ) early Tuesday. Netflix (NFLX) to begin tech earnings after market close.
Goldman Sachs stock rose 4.5% after beating earnings and revenue estimates. J&J shares fell more than 1% after the company reported strong results but reduced its full-year sales guidance.
Market leader in electric vehicles Tesla (TSLA) pared gains to about 1% on Tuesday as electric vehicle shares rallied in early trade. Among the Dow Jones Industrials are tech titans Apple (AAPL) and Microsoft (MSFT) were also significantly higher after the market open today.
AutoZone (AZO), cardinal health (CAH), Molina Healthcare (MOH) and Apex Pharma (VRTX) – as well as Dow Jones stocks rafters (CVX) and note (MRK) – are among the top stocks to watch. Keep in mind that the ongoing stock market correction is a time for investors to sit on the sidelines and build watch lists of the top growth stocks.
Cardinal Health and Vertex are IBD Leaderboard stocks. Merck and Molina Healthcare were featured in this week’s “Stocks near a buy zone” column, along with two other top stock ideas. AutoZone was Thursday’s IBD stock of the day. Cardinal Health was Friday’s stock of the day.
Dow Jones Today: Treasury Yields, Oil Prices
After Tuesday’s opening bell, the Dow Jones Industrial Average was up 1.8% and trading nearly 600 points. The S&P 500 gained 1.8%, with Tesla, target (TGT) and Etsy (ETSY) trading at the top of the list. The tech-heavy Nasdaq Composite rose 1.9% in morning action.
Overseas, markets across Asia generally closed with firm gains. In Europe, markets traded significantly higher in the afternoon action.
Among exchange-traded funds, Nasdaq 100-tracker Invesco QQQ Trust (QQQ) was up 1.9% and SPDR S&P 500 ETF (SPY) was up 1.8%.
The 10-year Treasury yield rebounded from early losses to trade just over 4%, about the same as Monday. US oil prices fell more than 1% on Tuesday, threatening to add to recent losses. West Texas Intermediate futures held just above $83 a barrel.
Stock market rally attempt continues
On Monday, the Nasdaq Composite led with a 3.4% breakout. The S&P 500 was up nearly 2.7% and the Dow Jones Industrial Average was up 1.9%.
Monday newspaper The Big Picture commented: “Indices are holding above Thursday’s lows, which mark the start of a rally attempt for now. Next comes resistance tests at their 21-day exponential moving averages for the major indices. The last few attempts haven’t gone well so the 21-day moving averages are definitely worth keeping an eye on. Also remember that indices are recovering from oversold levels. Therefore, waiting for a follow-through is the first step in shifting exposure back to equities.”
Psychologically, watching the market make repeated rally attempts can be a challenging process. Investors want to have watch lists handy to jump to next-day breakouts. But not all follow-throughs work, so buying too soon or with too much conviction can lead to frustration.
For this reason, it is important to slowly and methodically increase exposure as the uptrend proves its worth.
Check out IBD stock lists, like the IBD 50 and stocks near a buy zone, for stock ideas.
Five Dow Jones stocks to watch right now
Keep an Eye on Dow Jones Stocks: Chevron, Merck
Energy giant Chevron holds its 50-day moving average above support and consolidates below a buy point of 182.50 ahead of earnings release on October 28th. Chevron shares rose 0.6% early Tuesday, shrugging off the drop in oil prices.
CVX stock has a strong 98 out of 99 perfect IBD Composite Ratings, according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Dow Jones member and IBD-50 stock Merck breaks above the buy point of a double bottom at 93.12, according to pattern recognition by IBD MarketSmith. The relative strength line made a new high last week. Third quarter results are due on October 27 before the opening bell.
Merck shares are up 0.3% on Tuesday morning and are above the buy point.
4 Top Growth Stocks to Watchrightent stock market correction
Top stocks to watch: AutoZone, Cardinal, Molina, Vertex
Auto Parts Leader And Most Recent IBD Stock Of The Day AutoZone is about 3% off the buy point of a cup base of 2,362.34. Be on the lookout for a potential grip to provide a lower entry. AutoZone shares were up 0.2% early Tuesday.
IBD leaderboard stock and medical leader Cardinal Health is forming a flat base with a buy point of 72.38 according to chart analysis by IBD MarketSmith. Winnings are due on November 4th. Shares rose 1.8% on Tuesday.
Molina Healthcare closed just 2% below the buy point on Monday from a flat base of 361.35. The stock’s RS line hit a new high last week, confirming that the healthcare stock should be eyeing a leading position. Molina earnings are expected on October 26th. MOH stock was up 1.4% early Tuesday.
Biotech leader Vertex Pharmaceuticals continues to build flat base with a buy point at 306.05 and an early entry at 296.90. Its RS line made a new high in recent sessions, a sign of a major outperformance in the stock markets. Winnings are due October 27th. Shares were up 1.8% Tuesday morning.
Netflix earnings are due Tuesday after the market close. The streaming giant’s adjusted earnings are expected to fall 33% to $2.14 per share on sales of $7.83 billion.
Netflix shares are building a double bottom base with a buy point of 250.49. The stock is down about 65% from its 52-week high.
Join IBD experts as they analyze leading stocks in the latest stock market rally attempt on IBD Live
Tesla shares rose 7% on Monday, nearly erasing Friday’s 7.55% plunge. On Friday, shares closed at their lowest level since June 2021. Despite Monday’s surge, the stock is still about 47% off its 52-week high. Tesla shares rose 1.1% on Tuesday.
The EV giant’s third-quarter results are due late Wednesday. Tesla is expected to earn an adjusted $1.01 per share on revenue of $22.1 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 2.9% on Monday, rebounding 3.2% from Friday’s sell-off. Still, shares are about 23% below their 52-week high and below their 50- and 200-day moving averages. AAPL shares gained 2.7% Tuesday morning.
Microsoft rose 3.9% on Monday, continuing its recovery from last week’s 52-week low. The software giant is down about 32% from its 52-week high. Shares rose 2.3% early Tuesday as the company reportedly cut nearly 1,000 jobs. Meanwhile, Barclays maintained an overweight position in Dow Jones stock, lowering its price target to 310 from 335.
Apple’s earnings are expected on October 27th, while Microsoft’s are due on October 25th.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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