Editorial StaffDow Jones futures were lower Tuesday 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 kicks off Tuesday.
Arista Networks (ANET), Devon Energy (DVN), Diamondback Energy (FANG), Expedia (EXPE), Mosaic (MOS) and NXP Semiconductors (NXPI) were key earnings mover after the close.
Arista rallied 1% in early trade after strong earnings results. Devon shares climbed about 1%. FANG shares inched higher. Expedia jumped almost 5%. Mosaic slid 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 funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.7%, and the SPDR S&P 500 ETF (SPY) moved up 0.6% Monday.
Twitter (TWTR) moved up 0.2% and Tesla (TSLA) stock raced 3.7% higher Monday.
Among the other Dow Jones leaders, Apple (AAPL) moved up 0.2% and Microsoft (MSFT) traded 2.5% higher in today’s stock market.
Amid a deepening stock market correction, Dow Jones leader Merck (MRK) — along with IBD Leaderboard stock Cheniere Energy (LNG), Exxon Mobil (XOM) and World Wrestling Entertainment (WWE) — are among Monday’s top stocks to watch.
Microsoft and Tesla are IBD Leaderboard stocks. Exxon and Merck were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Futures Today: Treasury Yields, Fed Meeting
Before Tuesday’s open, Dow Jones futures lost 0.3% vs. fair value, while S&P 500 futures also moved down 0.3%. Nasdaq 100 futures dropped 0.35% 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 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, U.S. oil prices revered from sharp losses, with Texas Intermediate crude trading above $105 a barrel.
The Fed’s two-day policy meeting kicks 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 p.m. 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.”
Source: Investors.com
