Dow Jones futures were higher after another bid for a stock rally began on Monday, as major stock indices rebounded from new corrective lows. The 10-year Treasury yield briefly rose above 3% for the first time since December 2018. Then the Federal Reserve two day meeting starts Tuesday.
Arista rebounded 4% in extended trade after strong results. Devon shares rose around 1%. FANG shares rose slightly. Expedia jumped almost 5%. Mosaic slipped about 3%. NXP shares rose about 1%.
stock market today
On Monday, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 rose 0.6%. The tech-heavy Nasdaq composite rose 1.6%. Among exchange traded fundsthe Nasdaq 100 Invesco QQQ Trust tracker (QQQ) rose 1.7% and the SPDR S&P 500 ETF (TO SPY) rose 0.6% on Monday.
Overview of the US stock market today
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Last Updated: 4:30 PM ET on 05/02/2022
Amid a deepening stock market correction, the Dow Jones leader Merck (M.K.R.) – in the same way IBD classification Stock Energy Cheniere (LNG), Exxon Mobil (XOM) and World wrestling entertainment (WWE) – are among the top Monday stocks to watch.
Dow Jones Futures Today: Treasury Yields, Fed Meeting
After Monday’s close, Dow Jones futures were up 0.25% relative to fair value, while S&P 500 futures were up 0.4%. Nasdaq 100 futures gained 0.55% relative to fair value. Remember that overnight action in Futures contracts on Dow and elsewhere does not necessarily translate into actual trading over the next stock Exchange session.
The 10-year Treasury yield briefly rose above 3% on 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, US oil prices rebounded after steep losses, with Texas Intermediate crude trading at the above $105 a barrel.
The Fed’s two-day policy meeting starts Tuesday. Markets expect policymakers to announce a half-point rate hike when this week’s Federal Reserve meeting ends Wednesday at 2 p.m. ET. And that should be followed by the same – if not an even bigger hike – at the next two Fed meetings.
Another attempt at a stock market rally: what to do now?
On Monday, the main stock indexes reached new corrective lows before returning to the upside. Although one day does not make a trend, it was a step in the right direction. Monday was Day 1 of another rally attempt, which means a follow-up day can take place as early as Thursday.
Nevertheless, investors should remain on the defensive. This means avoiding new purchases until a follow-up day. For now, keep a watchlist of stocks that hold up well in a bear market. They could be among the stock market leaders in the next uptrend.
Finding the leaders of the next uptrend as the market continues to correct is a challenge. A useful method is to use a stock relative force line. The RS line measures a stock’s price performance relative to the S&P 500. If the stock is outperforming the broader market, the RS line slopes up. If a stock is performing worse than the broader market, the line will point down.
Friday’s The Big Picture column commented: “The Nasdaq composite fell 4.2% and broke above Wednesday’s low, killing its nascent rally attempt. The index suffered its fourth consecutive weekly decline and fell of 13.2% for the month, the worst monthly decline since October 2008.”
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Dow Jones stocks to watch: Merck
Dow Jones drug stock Merck is below a cup with the handle’s 89.58 buy point after a brief breakout attempt last week. Shares fell 1.2% on Monday, ending around 2% below the last entry.
Positively, the stock is relative force line is at new highs, indicating strong stock market outperformance during the current stock market correction.
Stocks to watch: Cheniere, Exxon, WWE
IBD classification Cheniere Energy stock is one of the top stocks to watch after finding support around its 50-day moving average on Monday. Actions are an engraving flat bottom which shows a buy point of 149.52, according to IBD MarketSmith graphical analysis.
Last week, energy giant Exxon Mobil added a manipulate to a cup base, moving the good point of purchase from 91.61 to 89.90. Shares reversed after early losses to climb 1.4% on Monday. Exxon’s stock is about 4% off new entry.
World Wrestling Entertainment remains below its 50-day moving average despite rising 2.4% on Monday. A decisive rally in the 50-day benchmark would be bullish for the stock’s outlook. Meanwhile, shares are just below a buy point of 60.94 in a handle cup.
Tesla stock rose 3.7% on Monday after the stock broke through its 50- and 200-day moving averages in last week’s 13% drop. The shares finished just below their 200-day line.
Shares of the electric vehicle giant ended Monday about 22% off the buying point of 1,152.97 on a cup-and-handle basis. The stock traded as high as 1,243.49 on Nov. 4 and is about 27% off that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares reversed after heavy losses on Monday, up 0.2%. The stock is still below its long-term 200-day line.
Software leader Microsoft rebounded 2.5% on Monday, recovering some of Friday’s 4.2% slippage. The shares are significantly below their 50 and 200 day lines. The stock closed about 20% off its 52-week high.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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