The Dow Jones Industrial Average turned higher on Tuesday, as the index sits at the top of a solid four-day gain. Blue chip stocks Home Depot (HD) and Walmart ( WMT ) was higher after earnings beats before Tuesday’s open. Early trading was generally muted as markets looked to Fed minutes from the central bank’s latest policy meeting and US retail sales, both due on Wednesday.
Contract manufacturer Factory (FN) staked out an early lead, up more than 10% after delivering a solid second-quarter report and strong guidance late Monday. Zoom video communication (ZM) fell to the bottom of the Nasdaq 100, falling more than 3% after it was downgraded to sell by Citi.
Head of electric vehicles Tesla ( TSLA ) traded up about 1% Tuesday morning. Elsewhere, Dow Jones tech leaders apple (AAPL) and Microsoft (MSFT) both inch lower after today’s stock market open.
In the healthy stock market environment, Dow Jones shares Cola (KO) and Merck (MRK) — as well as Albemarle (ALB), Costco (COST), Monolithic power systems (MPWR) and Ollie’s Bargain Outlet (OLLI) — is among the best stocks to buy and watch.
Albemarle is an IBD Leaderboard stock. Albemarle and Costco were featured in this week’s Stocks near a Buy Zone column.
Dow Jones today: Treasury yields, oil prices
Early Tuesday, the Dow Jones Industrial Average was up 0.1%, and the S&P 500 was down 0.2%. The tech-heavy Nasdaq lost 0.55% in morning trading.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 0.55% and the SPDR S&P 500 ETF ( SPY ) fell in morning trading.
The 10-year Treasury yield ticked up to 2.81% early Tuesday, recovering some of Monday’s drop to 2.79%. The 10-year government yield is on the rise after reaching its lowest level since early April in recent weeks.
Meanwhile, US oil prices erased early losses on Tuesday morning after undercutting recent lows on Monday. West Texas Intermediate futures rose higher, trading above $89 a barrel.
The Federal Reserve’s minutes from the last meeting will be published on Wednesday morning. The report is expected to reveal clues in the central bank’s thoughts on potential interest rate increases at the meeting in September.
At the last Fed meeting, the central bank delivered a 75 basis point interest rate hike for the second meeting in a row, and Fed Chair Jerome Powell indicated a third such increase “may be appropriate” in September.
Stock market rally
On Monday, the Nasdaq Composite once again came out the best of the major indexes. It finished close to the highs for the day as it rose 0.6%. That’s still down more than 17% so far in 2022.
Monday’s The Big Picture column commented: “The stock market rally showed resilience even as it took a well-deserved breather on Monday. Indices bounced back after coming under early pressure amid new data and managed to finish marginally higher.”
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Dow Jones Earnings: Home Depot, Walmart
Home improvement retailer Home Depot reported its second-quarter results early Tuesday. The company earned $5.05 per share on sales of $43.79 billion, topping analyst estimates. HD shares rose more than 1% in early morning trading.
Discount retailer Walmart extended a winning streak to seven sessions on Monday, rising 0.3%. Walmart’s second-quarter earnings came in at $1.77 per share on revenue of $152.9 billion, beating estimates. WMT shares rose 5% after the open.
Five Dow Jones stocks to watch now
Dow Jones stocks to watch: Coca-Cola, Merck
Dow Jones soft drink giant Coca Cola is building a flat base that has a buy point of 67.30. A handle entry of 65.14 is also in play. Shares are retreating from the 50-day line and nearing the early entry amid Monday’s 1.3% rally. The stock rose early Tuesday.
Merck is also building a flat base, a pattern showing a buy point of 95.82. Shares are trying to hold above their 50-day line amid Monday’s 0.5% drop, according to IBD MarketSmith chart analysis. The Merck share fell 0.5 percent on Tuesday.
The MRK share shows a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. Investors can use the IBD Composite Rating to easily measure the quality of a stock’s fundamental and technical metrics.
4 top growth stocks to buy and watch nowra stock market rally
Top stocks to watch: Albemarle, Costco, Monolithic, Ollie’s
IBD Leaderboard stock and lithium producer Albemarle is in buy territory after Friday’s breakout past a large cup-handled 273.78 buy point. The 5% buy zone goes up to 287.47. Earlier last week, shares topped a minor cup handle with a buy point of 250.25. Shares rose 0.9% on Monday, extending a winning streak to four sessions. The stock rose 0.2 percent on Tuesday morning.
Retail giant Costco builds a cup with a handle that displays a buy point of 552.81. The stock rose 1.6% on Monday and is about 3% off its last entry. The share rose 1.4 percent early Tuesday.
Recently IBD Stock Of The Day Monolithic Power Systems added a handle to a cup base last week, moving the correct buy point from 580.10 to 541.49. Meanwhile, shares remain above a 514.80 entry. The stock fell 1 percent on Tuesday.
Ollie’s Bargain Outlet is back from its 10-week line – a critical support level – putting the top discount retailer in a new buying zone. Shares are also cutting a handle after a major cup base, setting the latest buy point at 72.37. Current price action is about 10% away from this entry. The share rose 1.3 percent on Tuesday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares climbed 3.1% on Monday, closing at their highest level since May 4. Shares are once again trying to rise decisively above resistance around the 200-day line, which is a key level to watch. Tesla shares rose nearly 1% Tuesday morning.
The stock is about 25% off its 52-week high. The 3-to-1 share split will take place on 24 August.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares rose 0.6% on Monday, as the stock continues to build the right side of a cup base that has a buy point at 179.71. Another interpretation could be a major double bottom extending back to January. Regardless, the point of purchase is identical. Keep an eye out for a potential handle that could form and provide a lower entry.
Bullishly, the stock’s relative strength line is already at new highs, indicating big stock market returns. The stock fell 0.4 percent on Tuesday morning.
Microsoft gained another 0.5% on Monday, closing just shy of the long-term 200-day line, which is a key resistance area to watch. The stock fell 0.4 percent early Tuesday.
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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