The Dow Jones Industrial Average briefly fell 200 points Tuesday as the fourth-quarter earnings season picked up with eight key earnings reports, including Johnson & Johnson (JNJ) and Verizon Communications (VZ). Software giant Microsoft (MSFT) reports after the market closes.
Along with J&J and Verizon, including other companies reporting earnings before Tuesday’s open 3M (MMM), DR Horton (DHI), Halliburton (HAL) and Travelers (TRV).
MMM shares plunged more than 5%, while DHI shares rose 3%. Halliburton shares fell 1.3%, while JNJ shares rose 0.7%. The share of travel increased by 1.7 per cent. And VZ shares fell almost 2%.
Shares of General Electric (GE) rose 0.3% and Raytheon (RTX) erased early gains after earnings news. GE topped views in its first report after it was delivered GE Healthcare Technologies (GEHC) device. Raytheon reported mixed results, with revenue just missing analyst estimates.
On the economic front, the preliminary January PMI for manufacturing and services came from researcher Markit after the market opened. Both PMIs remained in decline, with the manufacturing index at 46.8 and the services index at 46.6, both higher than Econoday’s estimate.
The stock market today
Advanced Micro Devices ( AMD ) fell 3.9% on a Bernstein downgrade to market performance from outperform. Lululemon Athletica ( LULU ) fell 4% after Bernstein downgraded the retailer from market perform to underperform.
Head of electric vehicles Tesla ( TSLA ) traded up 1.7% Tuesday morning, ahead of earnings, due Wednesday. Dow Jones technology giants apple (AAPL) and Microsoft were both lower after today’s market opening.
Axon Enterprise (AXON), Today’s IBD stock Etsy (ETSY), IBD Leaderboard stocks Fluorine (FLR), Medpace (MEDP), Monster Drink (MNST) and Vertex Pharmaceuticals (VRTX) – as well as Dow Jones names Chevron (CVX), JPMorgan Chase (JPM) and Visa (V) — are among the best stocks to buy and watch as the market tests the strength of another rally.
Fluor and Medpace are IBD Leaderboard stocks. Vertex was IBD’s Stock Of The Day on Wednesday. Axon was featured in this week’s Stocks Near a Buy Zone column.
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Dow Jones today: Oil prices, Treasury yields
After Tuesday’s opening bell, the Dow Jones Industrial Average was down 0.5%, and the S&P 500 was down 0.4%. The tech-heavy Nasdaq composite lost 0.2%.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.2% and the SPDR S&P 500 ETF (SPY) traded down 0.3% early Tuesday.
The 10-year US Treasury yield ticked down to 3.51% on Tuesday morning, threatening to snap a three-day winning streak. Despite the recent gains, the 10-year yield is on a three-week losing streak that saw it hit its lowest level since mid-September.
Oil prices climbed on Tuesday, staying close to recent peaks. West Texas Intermediate futures traded up 0.7% to just above $82 a barrel.
In China, the mainland’s Shanghai Stock Exchange remains closed all week for the country’s Lunar New Year celebrations. The Hong Kong Stock Exchange is closed through Wednesday and will reopen on Thursday.
Stock market rally
On Monday, the Dow Jones Industrial Average rose 0.8%, and the S&P 500 jumped 1.2%. The technology-heavy Nasdaq composite rose 2% to add to Friday’s gains.
But Monday’s The Big Picture column warned: “The bullish turn in the stock market also invites the risk that the indices may exceed their trends. Case in point: The MarketSmith short-term overbought-oversold oscillator is near its highest level in more than a year on both the Nasdaq and SNEEZE.”
Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to buy and watch: Chevron, JPMorgan, Visa
Energy giant Chevron rounds off the right side of a cup base with 189.78 buy points, according to IBD MarketSmith pattern recognition. Keep an eye out for a handle to offer a lower entry. Chevron’s results for the fourth quarter are due on Friday. CVX shares fell 0.4% on Tuesday.
CVX stock scores a strong 95 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Banking giant JPMorgan is about 1% below a 138.76 buy point after last week’s breakout attempt, according to IBD MarketSmith chart analysis. The stock fell 0.3 percent on Tuesday morning.
Payments leader Visa is trading in buy territory above a buy point of 220.08 in a long pattern. The 5% buy range goes up to 231.08. Visa shares were lower early Tuesday, ahead of the company’s first-quarter financial results due on Thursday.
4 top growth stocks to buy and watch Stock market rally
Top stocks to buy and watch: Axon, Etsy
Security leader Axon briefly topped a 189.72 buy point in a cup with handles during Monday’s rapid rally. Axon shares fell 1.5 percent on Tuesday morning.
Background story: Formerly known as Taser International, the company has taken advantage of the business opportunities presented by public demands for more police oversight. The series of body cameras and associated software are now market leaders. The Scottsdale, Arizona-based company also has a cloud-based digital evidence platform.
Breaking out past a 137.01 buy point in a cup with handle, Etsy gained 5.5% on Monday and closed out a 5% buy range that goes up to 143.86. ETSY shares fell 0.9% on Tuesday.
Background story: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that in recent years has gone from a niche e-commerce marketplace to a shopping destination across a range of categories.
Fluoride, Medpace Break Out
IBD Leaderboard stock Fluor is trying to break out past a flat-base buy point at 36.16, and is right at the entry point after Monday’s 0.1% gain. If stocks retrace this entry, the 5% buy area tops out at 37.97. FLR shares fell 1.2% early Tuesday.
Background story: Fluor manages large infrastructure projects within the oil and gas, chemical, mining and transport industries. This is an earnings scam. A poor EPS rating reflects net losses in 2019 and 2020 and an expected fall in earnings in 2022 to 86 cents per share. However, analysts see earnings rising 95% next year to $1.68 per share.
Medpace breaks out above a consolidation buy point at 235.82, ending in the buy zone peaking at 247.61. In recent weeks, the shares have risen above an early entry of 220.09. The company’s result is expected on 13 February. Medpace shares fell 0.5% early Tuesday.
Background story: Medpace is a clinical contract resource organization, or CRO. It helps drug manufacturers carry out the clinical studies needed to gain approval for new drugs. In the third quarter, the company gave a positive outlook for 2023, which calls for 18% sales growth in the middle of guidance.
Monster, Vertex Trace Flat Bases
Monster Beverage remains just below its 50-day line amid Monday’s weak gain. Shares are tracking a flat base with a buy point at 104.75. The MNST share rose 0.2 percent on Tuesday.
Background story: Monster Beverage leads an energy drink duopoly with privately held competitor Red Bull. The company’s portfolio of energy drink brands includes Monster Energy, Reign and NOS Energy.
Monster dominates energy drinks in the US, taking a 39% market share last year, according to Jefferies data, resulting in a record $5.5 billion in revenue for the company. Red Bull accounted for 37% of the US energy drink market in 2021. Upstart Celsius (CELH), which is on an impressive growth streak, took 4.9% of the market.
Wednesday’s IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after retracing its 50-day line in recent sessions. VRTX stock lost 0.2% on Tuesday.
Background story: The company is known for its treatments for cystic fibrosis – a market that Vertex estimates has 88,000 patients. Of these, there are still 20,000 patients who can receive the old-school oral treatments. But analysts are looking for what’s new from Vertex, including an updated three-drug regimen that could strengthen Vertex’s position against rivals AbbVie (ABBV).
Shares to buy and watch in a stock market rally
These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
|company name||Symbol||Right point of purchase||Type of base|
|Axon||(AXON)||189.72||Cup with handle|
|Etsy||(ETSY)||137.01||Cup with handle|
|Visa||(V)||220.08||Cup with handle|
Source: IBD data as of January 24, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares rose 7.7% higher on Monday, closing at their highest level since December 19. Despite their recent rally, shares remain firmly below the 50- and 200-day lines. Tesla stock closed Monday about 63% off its 52-week high. Tesla earnings will come out on Wednesday after the close.
Shares in the EV giant appeared to extend Monday’s gains, trading up 1.7% on Tuesday morning.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares rose 2.35% on Monday, decisively retaking its 50-day line, which it had been trading below since mid-December. The stock is still about 21% lower than its 52-week high. Apple will report its quarterly results on February 2. AAPL stock was down 0.1% on Tuesday.
Microsoft shares rose 1% on Monday, finishing just above the 50-day line, where it found strong resistance last week. A more decisive retracement would be bullish for the stock’s outlook, although shares remain 23% off their 52-week high. The stock fell 0.4 percent early Tuesday.
MSFT earnings are due late Tuesday. The software giant is expected to earn $2.29 a share on sales of $52.9 billion, according to IBD data.
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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