The Dow Jones Industrial Average turned lower Tuesday morning ahead of the Federal Reserve’s two-day meeting. The 10-year government interest rate is ticking down after Monday’s new high.
BP (BP), Avis Budget Group (CAR) and Nutrients (NTR) made all strong progress after earnings reports late Monday / early Tuesday.
Other important income factors ahead of the open included Arista Network (ET NETT), Devon energy (DPN)Diamondback Energy (LAP), Expedia (EXPE), Mosaic (MOS), NXP Semiconductors (NXPI) and Pfizer (PFE).
Arista fell 4% in morning trading despite strong earnings results. Devon shares rose around 5%. The FANG share rose almost 3%. Expedia fell around 9%. Mosaic fell around 3%. NXP shares fell around 1%. Pfizer shares rose in early trading.
Twitter (TWTR) rose after Monday’s rise of 0.2%. And electric car giant Tesla (TSLA) traded down almost 1% on Tuesday morning, and is looking to increase Monday’s rise.
Among the Dow Jones executives, apple (AAPL) and Microsoft (MSFT) was down a fraction in today’s stock market.
In the middle of a new attempt at a stock market rally, leader Dow Jones Merck (MRK) – along with IBD Leaderboard storage Cheniere energy (LNG), Exxon Mobile (XOM) and World Wrestling Entertainment (WWE) – is among Tuesday’s best stocks to see.
Cheniere Energy, Microsoft and Tesla are IBD Leaderboard shares. Exxon and Merck were featured in this week’s Stocks near a buy zone column.
Dow Jones Today: Treasury Yields, Oil Prices, Fed Meeting
After Tuesday’s opening, the Dow Jones Industrial Average fell 0.1%. The S&P 500 was flat. And the technology-heavy Nasdaq fell 0.3% in morning trading.
Among exchange-traded funds, the Nasdaq 100 tracking Invesco QQQ Trust (QQQ) fell 0.4%. SPDR S&P 500 ETF (SPY) lost a fraction.
The 10-year government interest rate ticked down to 2.92% on Tuesday morning after peaking at 3% on Monday. On Monday, the 10-year government bond yield reached a new 52-week high and reached its highest level since December 2018.
Meanwhile, the US oil price fell more than 1%. West Texas Intermediate oil fell narrowly below $ 104 a barrel after disappointing first-quarter growth data in China pointed to weaker-than-expected energy demand.
The Fed’s two-day political meeting starts on Tuesday. That does not mean much for Tuesday’s marketing campaign. But markets fully expect decision-makers to announce a half-point rate hike when this week’s Federal Reserve meeting concludes on Wednesday. 14.00 ET. It is expected to be followed by more of the same – if not an even larger increase – in the next two Fed meetings. Any significant deviation from these expectations can provoke a market reaction.
Stock market rally attempts
On Monday, the major stock indices reached new correction bottoms before turning higher. Although one day is not a trend, it was a step in the right direction. Technically, Monday was day 1 in a new rally attempt. This means that a follow-up day – which will launch a new confirmed trend – can take place as soon as Thursday.
Nevertheless, investors should remain on the defensive. This means avoiding new purchases until a follow-up day. For now, keep a watch list of stocks that are doing well in a declining market. They could become some of the stock market leaders in the next upswing.
Looking for the next trend leaders while the market is still recovering is a challenge. A useful method is to use a stock’s relative strength line. The RS line measures a share price development vs. S&P 500. If the stock surpasses the wider market, the RS line angles upwards. If a stock performs worse than the broad market, the line will point lower.
Monday’s The Big Picture column commented: “After a brutal April, May started with a bullish reversal when bargain hunters entered the stock market late Monday afternoon. What happens next may depend on the Federal Reserve.”
If you are new to IBD, you should consider taking a look at the stock trading system and the basics of CAN SLIM. Recognizing chart patterns is a key to the investment guidelines. IBD offers a wide range of growth charts, such as Leaderboard and SwingTrader.
Investors can also create watch lists, find companies approaching a point of purchase, or develop custom monitors at IBD MarketSmith.
Five Dow Jones shares to see now
Dow Jones shares to see: Merck
Dow Jones drug stock Merck is below a 89.58 buy-by-handle base after a brief outburst last week. Shares fell 1.2% on Monday, ending about 2% during the last listing. Merck shares fell almost 1% on Tuesday morning.
On a positive note, the share’s relative strength is at new heights, which indicates large stock market returns during the current stock market correction.
Three top growth stocks to see in timerent Stock market correction
Shares to look at: Cheniere, Exxon, WWE
The IBD Leaderboard stock Cheniere Energy is one of the best stocks to see after finding support around its 50-day moving average on Monday. The stock etches a flat base showing a buying point of 149.52, according to IBD MarketSmith chart analysis. LNG shares rose on Tuesday morning.
Last week, energy giant Exxon Mobil added a handle to a cup base, moving the correct buying point from 91.61 to 89.90. The stock turned from early losses to climb 1.4% on Monday. Exxon shares are about 4% away from the new listing, and shares were slightly lower early Tuesday.
World Wrestling Entertainment is still below the 50-day moving average despite Monday’s rise of 2.4%. A decisive repetition of the 50-day benchmark would be bullish on the stock’s outlook. Meanwhile, the shares are just below a buy point of 60.94 in a cup with handles. WWE stock rose Tuesday morning.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla shares rose almost 1% on Tuesday morning, and appear to be rising on Monday’s 3.7% rise. The shares remain below the 50- and 200-day moving average after last week’s dive of 13%.
Shares in the EV giant ended Monday about 22% away from a cup-with-handle buy point of 1,152.97. The stock traded as high as 1,243.49 on November 4 and is approximately 27% away from the record high.
Dow Jones executives: Apple, Microsoft
Among Dow Jones shares, Apple shares reversed from heavy losses on Monday, rising 0.2%. The stock is still below its long-term 200-day line. Apple stock lost 0.2 percent on Tuesday.
Software leader Microsoft increased 2.5% on Monday, restoring part of Friday’s 4.2% drop. The stock is strong below its 50- and 200-day lines. The stock closed around 20% of its 52-week high. MSFT shares fell 0.5% on Tuesday morning.
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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