Dow Jones futures were lower after a new stock market rally attempt began Monday, as the major stock indexes rebounded from fresh correction lows. The 10-year Treasury yield briefly topped 3% for the first time since December 2018. Next up, the Federal Reserve’s two-day meeting kick off Tuesday.
Arista rallied 4% in extended trade after strong earnings results. Devon shares climbed about 1%. FANG shares inch higher. Expedia jumped almost 5%. Mosaic slide around 3%. NXP shares moved up about 1%.
Stock Market Today
On Monday, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 moved up 0.6%. The tech-heavy Nasdaq composite advanced 1.6%. among exchange traded fundsthe Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.7%, and the SPDR S&P 500 ETF (spy) moved up 0.6% Monday.
US Stock Market Today Overview
Last Update: 4:30 PM ET 5/2/2022
Amid a deepening stock market correction, Dow Jones leader Merck (MRK)—along with IBD Leader Board stock Cheniere Energy (LNG), Exxon Mobil (XOM) and World WrestlingEntertainment (WWE) — are among Monday’s top stocks to watch.
Dow Jones Futures Today: Treasury Yields, Fed Meeting
After Monday’s close, Dow Jones futures lost 0.2% vs. fair value, while S&P 500 futures moved down 0.25%. Nasdaq 100 futures dropped 0.3% vs. fairvalue. Remember that overnight action in dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock-market session.
The 10-year Treasury yield briefly topped 3% Monday, before closing at 2.99%. The 10-year Treasury yield hit a new 52-week high and is at its highest level since December 2018. Meanwhile, US oil prices revered from sharp losses, with Texas Intermediate crude trading above $105 a barrel.
The Fed’s two-day policy meeting kick off Tuesday. Markets fully expect policymakers to announce a half-point rate-hike when this week’s Federal Reserve meeting wraps up on Wednesday at 2 pm ET. And that’s expected to be followed by more of the same — if not an even bigger hike — in the next two Fed meetings.
New Stock Market Rally Attempt: What To Do Now
On Monday, the major stock indexes hit new correction lows before reversing higher. While one day doesn’t make a trend, it was a step in the right direction. Monday was Day 1 of a new rally attempt, which means a follow-through day can occur as soon as Thursday.
Still, investors should remain on the defensive. That means avoiding new purchases until a follow-through day. For now, keep a watchlist of stocks that are holding up well in a down market. They could be some of the stock market’s leaders in the next uptrend.
Searching for the next uptrend’s leaders while the market is still correcting is a challenge. One helpful method is to use a stock’s relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Friday’s The Big Picture column commented, “The Nasdaq composite slumped 4.2% and undercut Wednesday’s low, killing its nascent rally attempt. The index suffered its fourth-straight weekly decline and slumped 13.2% for the month, the worst monthly decline since October 2008. “
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Dow Jones Stocks To Watch: Merck
Dow Jones drug stock Merck is below a cup with handle’s 89.58 buy point following a brief breakout attempt last week. Shares dipped 1.2% Monday, ending about 2% below the latest entry.
Positively, the stock’s relative strength line is at new highs, indicating big stock market outperformance during the current stock market correction.
Stocks To Watch: Cheniere, Exxon, WWE
IBD Leader Board stock Cheniere Energy is one of the top stocks to watch after finding support around its 50-day moving average Monday. Shares are etching a flat base that shows a 149.52 buy point, according to IBD MarketSmith chart analysis.
Last week, energy giant Exxon Mobil added to handle to a cup base, moving the correct buy point from 91.61 to 89.90. Shares reversed from early losses to climb 1.4% Monday. Exxon stock is about 4% away from the new entry.
World Wrestling Entertainment remains below its 50-day moving average despite Monday’s 2.4% climb. A decisive retake of the 50-day benchmark would be bullish for the stock’s prospects. Meanwhile, shares are just below a 60.94 buy point in a cup with handle.
Tesla stock raced 3.7% higher Monday after the stock broke down through its 50- and 200-day moving averages during last week’s 13% dive. Shares finished just below their 200-day line.
Shares of the EV giant finished Monday about 22% away from a cup-with-handle base’s 1,152.97 buy point. The stock traded as high as 1,243.49 on Nov. 4 and is about 27% away from that all-time high.
Dow Jones Leaders: Apple, Microsoft
among dow jones stocks, Apple shares reversed from sharp losses Monday, moving up 0.2%. The stock is still below its long-term 200-day line.
Software leader Microsoft rallied 2.5% Monday, recovering from Friday’s 4.2% skid. Shares are sharply below their 50- and 200-day lines. The stock closed around 20% 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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