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Dow Jones futures rallied more than 600 points Tuesday, as Goldman Sachs and Johnson & Johnson reported earnings results and global markets logged healthy gains. Netflix earnings are due out after the market close.
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Stock Market Today: Earnings Season Continues
Third-quarter earnings season continues, with results from Dow Jones stocks Goldman Sachs (GS) and Johnson & Johnson (JNJ) early Tuesday. Netflix (NFLX) will kick off tech earnings after the market close.
Goldman Sachs stock jumped nearly 3% after topping earnings and sales estimates. J&J shares jumped more than 2% after the company reported strong results, but trimmed its full-year sales guidance.
Electric-vehicle leader Tesla (TSLA) rose more than 3% Tuesday as electric vehicle stocks rallied in premarket trade. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were also sharply higher ahead of today’s stock market open.
AutoZone (AZO), Cardinal Health (CAH), Molina Healthcare (MOH) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Chevron (CVX) and Merck (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 watchlists of 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 the IBD Stock Of The Day on Thursday. Cardinal Health was Friday’s Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s opening bell, the Dow Jones Industrial Average rallied 2.1%, trading up more than 600 points. The S&P 500 gained 2.3%, with Tesla, Target (TGT) and Etsy (ETSY) trading near the top of the list. The tech-heavy Nasdaq 100 composite rose 2.5% in morning action.
Overseas, markets across Asia generally closed with firm gains. In Europe, markets traded sharply higher in afternoon action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 2.1%, and the SPDR S&P 500 ETF (SPY) rose 1.9%.
The 10-year Treasury yield recovered early losses to trade narrowly above 4%, about even with Monday’s close. U.S. oil prices edged lower Tuesday, threatening to add to recent string of losses. West Texas Intermediate futures held just above $85 a barrel.
Stock Market Rally Attempt Continues
On Monday, the Nasdaq composite led with a 3.4% burst. The S&P 500 rose nearly 2.7% and the Dow Jones Industrial Average climbed 1.9%.
Monday’s The Big Picture commented, “Indexes are holding above Thursday’s lows, which for now mark the start of a rally attempt. Tests of resistance at their 21-day exponential moving averages come next for the big indexes. The past few attempts haven’t gone well, so the 21-day lines certainly bear watching. Also keep in mind that indexes are bouncing from oversold levels. That’s why waiting for a follow-through is the first step in shifting exposure back to stocks.”
Psychologically, watching the market work through repeated rally attempts can be a challenging process. Investors want to keep watchlists handy, in order to jump on follow-through day breakouts. But not all follow-throughs work, so buying too soon or with too much conviction can lead to frustration.
This is why it’s important to raise exposure slowly and methodically, as the uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron continues to hold above support at its 50-day line and is consolidating below a 182.50 buy point ahead of the company’s Oct. 28 earnings release. Chevron shares rose 1.1% early Tuesday, shrugging off the fall in oil prices.
CVX stock boasts a strong 98 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.
Dow Jones member and IBD 50 stock Merck is breaking out past a double bottom’s 93.12 buy point, according to IBD MarketSmith pattern recognition. The relative strength line hit a new high last week. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares added 0.6% Tuesday morning and are above the buy point.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: AutoZone, Cardinal, Molina, Vertex
Auto parts leader and recent IBD Stock Of The Day AutoZone is about 3% away from a cup base’s 2,362.34 buy point. Keep an eye out for a potential handle to offer a lower entry. AutoZone shares swung 1.8% higher early Tuesday.
IBD Leaderboard stock and medical leader Cardinal Health is shaping a flat base that has a 72.38 buy point, according to IBD MarketSmith chart analysis. Earnings are due Nov. 4. Shares were unchanged Tuesday.
Molina Healthcare finished Monday just 2% under a flat base’s 361.35 buy point. The stock’s RS line hit a new high last week, confirming the health care stock as a leader to watch. Molina’s earnings are expected out on Oct. 26. MOH stock climbed 1.2% early Tuesday.
Biotech leader Vertex Pharmaceuticals continues to build a flat base with a 306.05 buy point and an early entry at 296.90. Its RS line made a new high in recent sessions, a sign of big stock market outperformance. Earnings are due Oct. 27. Shares traded up 1.2% Tuesday morning.
Netflix Earnings
Netflix earnings are due Tuesday after the stock market closes. The streaming giant’s adjusted earnings are expected to fall 33% to $2.14 a share on revenue of $7.83 billion.
Netflix shares are building a double-bottom base with a 250.49 buy point. The stock is about 65% off its 52-week high.
Join IBD experts as they analyze leading stocks in the current stock market rally attempt on IBD Live
Tesla Stock
Tesla stock surged 7% Monday, nearly erasing Friday’s 7.55% dive. On Friday, shares closed at their lowest level since June 2021. Despite Monday’s rise, the stock is still about 47% off its 52-week high. Tesla stock climbed 3.3% Tuesday.
The EV giant’s third-quarter results are due late Wednesday. Tesla is expected to earn an adjusted $1.01 per share on sales of $22.1 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 2.9% Monday, rebounding from Friday’s 3.2% selloff. Still, shares are about 23% off their 52-week high and below their 50- and 200-day lines. AAPL stock advanced 1.8% Tuesday morning.
Microsoft climbed 3.9% Monday, continuing its rebound from last week’s 52-week low price. The software giant is about 32% off its 52-week high. Shares advanced 2.6% early Tuesday, as the company reportedly trimmed nearly 1,000 jobs. Meanwhile, Barclays maintained an overweight rating on the Dow Jones stock, reducing the price target from 335 to 310.
Apple earnings are expected on Oct. 27, while Microsoft’s are due Oct. 25.
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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