Dow Jones futures were lower, while tech futures sold off late after Monday’s stock market rebound. Zoom Video (ZM) briefly surged more than 17% after better-than-expected first-quarter earnings results. Advance Auto Parts (AAP) and Heico (HEI) also reported late. And Snap (SNAP) crashed 30% after warning that its second-quarter revenue would be below its low end of guidance.
AAP shares fell about 2% in extended trade. And Heico stock edged higher after reporting better-than-expected results.
Meanwhile, AutoZone (AZO), Best Buy (BBY) and Ralph Lauren (RL) are among the companies reporting Tuesday morning.
After Monday’s close, Dow Jones futures dropped 0.4% vs. fair value, while S&P 500 futures lost 0.8%. Nasdaq 100 futures sold off 1.3 vs. fair value. 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 ticked higher to 2.85% Monday, snapping a three-day losing streak. On Friday, the 10-year Treasury yield closed at its lowest level since April 26. Meanwhile, U.S. oil prices climbed less than 1%, with West Texas Intermediate crude trading above $110 a barrel.
On Monday, the Dow Jones Industrial Average jumped 2%, while the S&P 500 moved up 1.9%. The tech-heavy Nasdaq composite advanced 1.6%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rallied 1.7%, and the SPDR S&P 500 ETF (SPY) climbed 1.9%.
VMware (VMW) surged nearly 25% Monday after news reports said Broadcom (AVGO) is in talks to acquire the cloud service provider. Broadcom shares tumbled more than 3% in response.
Tesla (TSLA) stock raced 1.7% higher Monday. Among Dow Jones leaders, Apple (AAPL) rose 4% and Microsoft (MSFT) traded 3.2% higher in today’s stock market.
As the stock market rally continues to struggle, Dow Jones leaders Chevron (CVX) and Merck (MRK) — along with Livent (LTHM), Exxon Mobil (XOM), Eli Lilly (LLY), and World Wrestling Entertainment (WWE) — are among IBD’s top stocks to watch for Tuesday.
Microsoft is an IBD Leaderboard stock. Merck is on IBD SwingTrader. Livent and World Wrestling Entertainment were featured in this week’s Stocks Near A Buy Zone column.
The major stock indexes posted solid gains Monday. Monday’s action was a step in the right direction following last week’s heavy selling, but it wasn’t enough to switch the market status back into a confirmed uptrend.
Even though the underlying uptrend remains intact, it’s time to play defense and maintain a cautious stance after heavy selling last week. Be careful about new purchases by focusing on stocks with the best fundamentals and price action. To be sure, there are few good setups among leading stocks.
Monday’s The Big Picture column commented, “Notably, volume was significantly lower than on Friday, off 17% on the Nasdaq. In the prior session, trading may have gotten a boost from equity and index options that expired the same day. Even then, the slower activity suggested that institutional investors held back from committing much capital to the market rebound.”
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Dow Jones leader and energy giant Chevron continues to build a flat base that has a 174.86 buy point, according to IBD MarketSmith chart analysis. CVX shares traded up 2.3% Monday, placing them just below their latest buy point.
CVX stock boasts a perfect 99 IBD Composite Rating, per IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Merck, a Dow Jones and drug industry leader, is barely still in buy range above a cup-with-handle’s 89.58 buy point, as shares rose 0.3% Monday. The 5% buy area goes up to 94.06.
Positively, the stock’s relative strength line is at new highs, indicating outperformance during the current stock market correction.
Lithium producer and Tesla supplier Livent is approaching an early buy point at 29.68, rising 3.7% Monday, according to IBD MarketSmith chart analysis. Meanwhile, Livent stock continues to rally up the right side of a cup base that has a conventional entry at 33.14. Keep an eye out for a potential handle to offer a more risk-optimal entry.
Energy giant Exxon Mobil is at the top of a buy range above a cup-with-handle’s 89.90 buy point, rising 2.2% Monday. Shares are at the top of the 5% buy area that goes up to 94.40.
Pharmaceutical giant Eli Lilly rose 1.25% Monday. Shares of the IBD Leaderboard stock are finding support around their 50-day moving average line and are approaching a flat base’s 314.10 buy point. An early buy trigger at 309.54 is also in play.
World Wrestling Entertainment is one of the top stocks to watch after it closed Monday within striking distance of a flat base’s 63.81 buy point. WWE shares rallied 1.3% Monday. extending a win streak to five sessions.
Tesla stock rose 1.7% Monday, recovering a small part of Friday’s 6.4% tumble and snapping a three-day losing streak. Shares are sharply below their 50- and 200-day moving averages.
The stock traded as high as 1,243.49 on Nov. 4 and is more than 45% away from that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares jumped 4% Monday. The stock remains far below its long-term 200-day line.
Software leader Microsoft gained 3.2% Monday, but remains sharply below its 50- and 200-day lines. The stock closed more than 25% off its 52-week high.