The Dow Jones Industrial Average lost more than 200 points on Monday morning, before the last day of October. Investors are gearing up for a big week highlighted by the Federal Reserve’s two-day meeting and concluding with the Labor Department’s jobs report on Friday.
The Fed’s two-day meeting begins Tuesday, with an interest rate decision Wednesday afternoon. Investor sentiment shows an 81% chance of a 75 basis point hike, according to the CME.
The Fed says it won’t pivot — which means slowing its pace of rate increases — until the overheated labor market shows clear signs of slowing. But once the labor market begins to recover, the Fed’s strategy and a wide range of economic factors are likely to change. This puts Friday’s employment report under greater scrutiny.
The main reporters for Monday’s results were Global Payments (GPN) and All (ON). Global Payments fell more than 4% on mixed results, while ON stock fell more than 1%.
Other important earnings reports this week include Advanced micro-systems (AMD), Arista Networks (A NET), Eli Lily (THERE IS), NXP Semiconductor (NXPI) and Pfizer (EFP).
Electric vehicle giant You’re here (TSLA) was trading down around 1% on Monday morning, while technology leaders Dow Jones Apple (AAPL) and Microsoft (MSFT) were also lower after today’s stock market open.
Cardinal Health (ACH), Eli Lily (THERE IS), Pure storage (PSTG) and Texas Truck Stop (TXRH) – as well as Dow Jones stocks Merck (MRK) and UnitedHealth Group (UNH) – are among the best stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to put their watchlists into action, but be mindful of current market volatility.
Cardinal and Texas Roadhouse are IBD rated stocks. Pure Storage was a recent IBD Stock of the Day. UnitedHealth was featured in last week’s Stocks Near A Buy Zone column, along with three other stock ideas.
Dow Jones Today: Treasury Yields, Oil Prices
After Monday’s opening bell, the Dow Jones Industrial Average fell 0.7%, while the S&P 500 fell 0.8%. The Nasdaq lost 1% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 1% and the SPDR S&P 500 ETF (SPY) fell 0.7%.
The 10-year Treasury yield rose to 4.04% on Monday morning, looking to rebound from last week’s losses that saw the 10-year Treasury yield snap a 12-week winning streak.
Meanwhile, US oil prices fell nearly 2% on Monday, following a weekly rebound last week. West Texas Intermediate futures held just above their 50-day moving average, just above $86 a barrel.
The stock market rally continues
On Friday, the Dow Jones Industrial Average rebounded 2.6%, while the S&P 500 jumped 2.5%. The tech-heavy Nasdaq composite rose 2.9%.
Friday’s The Big Picture commented: “The stock market put on a show of strength rising despite disappointing Big Tech earnings reports. But it’s still too early for investors to get excited, with another meeting of Federal Reserve fast approaching.”
Now is an important time to read IBD’s The Big Picture column. Following recent gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-ups work, so it’s important to increase exposure slowly and methodically as the new uptrend proves its worth.
Check out IBD stock listings, like the IBD 50 and stocks near a buy zone, for stock ideas.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: Merck, UnitedHealth
Merck is extended past the 93.12 buy point of a double bottom after a six-day winning streak. The 5% buy zone rose to 97.78. Merck shares traded down 0.9% on Monday.
Healthcare giant UnitedHealth is just below the 553.23 buy point of a cup with handle, according to IBD MarketSmith pattern recognition. Sthe Hares climbed 1.7% on Friday, moving with the points from the title’s last entry.
UNH stock rose nearly 1% on Monday morning.
4 growth stocks to watch in the currentrStock market rally
Top stocks to buy and watch: Cardinal, Eli Lilly, Pure Storage, Texas Roadhouse
According to IBD MarketSmith’s chart analysis, IBD Leaderboard Cardinal Health stock continues to rack up gains after a recent breakout that topped the 71.22 entry of a short cut with a handle. Stocks are also above the buy point of 72.38 on a flat basis. Earnings are scheduled for Friday. CAH stock traded down 0.6% on Monday morning.
IBD SwingTrader Eli Lilly stock closed beyond its buy range above the buy point of 335.43 on a flat basis, climbing 1% on Friday. Shares were down 2% on Monday morning ahead of Tuesday’s earnings report.
Friday’s IBD Pure Storage stock is approaching a buy point of 31.62 after two consecutive days of gains. The stock was up 2.4% on Monday morning.
Texas Roadhouse remains in the buy range above the 95.52 buy point on a flat basis during Friday’s volatile earnings-fueled session. The pursuit zone goes up to 100.30. TXRH stock fell 1.5% after Deutsche Bank downgraded it from buy to hold.
Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live
Tesla stock rebounded 1.5% on Friday, rising for a fourth consecutive session and continuing to rebound after hitting a 52-week low last week. Despite its recent gains, the stock closed around 45% off its 52-week high.
Shares of the electric vehicle giant were down around 1% on Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares jumped 7.6% on Friday, decisively retracing the key 50-day line. Now stocks are trying to break above their long-term 200-day line for the first time since Sept. 13. Apple stock fell 1.3% on Monday.
Microsoft jumped 4% on Friday, ending a two-day decline. The software giant is around 33% off its 52-week high. Microsoft shares fell 0.7% on Monday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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