Dow Jones collects 400 points, what to do next; 4 Tech Titans Report Profits

Dow Jones futures were higher for Tuesday’s open, after the Dow Jones Industrial Average rose more than 400 points on Monday. Tech titans Alphabet, Apple, Meta Platforms and Microsoft have earnings this week.


But first, Dow Jones stocks 3M (MMM) and Coca-Cola (KO) will report early Tuesday. General Motors (GM), Halliburton (HAL), Raytheon Technologies (RTX) and UPS (UPS) are also among the top reporters on Tuesday morning.

Stock Market Today: Chinese Stocks Plunge

On Monday, the Dow Jones Industrial Average rose 1.3% and the S&P 500 rose 1.2%. The tech-heavy Nasdaq composite climbed 0.9%. And the small-cap Russell 2000 was up 0.35%.

Of the exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.1% and the SPDR S&P 500 (SPY) rose 1.2%.

Chinese stocks took a hit on Monday as China’s Hang Seng index fell 6.4%, closing at its lowest level since April 29, 2009. Chinese leader Xi Jinping continued to consolidate his power, appointing a number of supporters of the most powerful decision-making body of the party after securing a convention-defying third term.

Alibaba (BABA) and Baidu (BIDU) each fell more than 12%. Daqo New Energy (DQ) plunged close to 7% and Li Auto (LI) plunged 17%. And Pinduoduo (PDD) crashed 24%.

EV giant Tesla (TSLA) cut losses to 1.5% after hitting a new 52-week low. Dow Jones shares, Apple (AAPL) rose 1.5% and Microsoft (MSFT) rose 2.1% in today’s stock market.

AutoZone (AZO), Cardinal Health (CAH), Eli Lilly (LLY), and Texas Roadhouse (TXRH) — as well as Dow Jones stocks Chevron (CVX) and UnitedHealth (UNH) — are among the top stocks to buy and watch. Keep in mind that the new stock market rally is the perfect time for investors to get their watchlists into action.

Cardinal and Texas Roadhouse are IBD Leaderboard stocks. Eli Lilly is an IBD SwingTrader stock. UnitedHealth was featured in the Stocks Near a Buy Zone column this week, along with three other top stock ideas.

4 top growth stocks to watch in the current stock market rally

Dow Jones Futures Today: Treasury Yields, Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures rose 0.1% relative to fair value, while S&P 500 futures rose slightly higher. Nasdaq 100 futures were unchanged from fair value. Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

The 10-year Treasury yield rose to 4.23% on Monday, reaching its highest level since June 2008. Meanwhile, US oil prices fell on Monday after a three-day winning streak. West Texas Intermediate futures traded near $85 a barrel.

Third Quarter Profit Season: Alphabet, Apple, Meta, Microsoft Report

The third quarter earnings season kicks off this week, with key reports from tech titans Alphabet (GOOGL), Apple (AAPL), Meta Platforms (META) and Microsoft (MSFT).

The results from Boeing (BA), Chevron, Merck and Visa (V) also appear throughout the week.

Earnings reports trigger many of the biggest moves in stocks and require special attention. Strong gains can push top stocks to previously untouched levels — and above new buy points — while a less-than-impressive announcement could send stocks tumbling.

The stock market’s response to an earnings release can often tell you more than the earnings itself. If the results appear strong, but the stock is falling, investors may be concerned about the sustainability of growth, rising costs or other potential negatives.

With the market rallying, investors should follow companies that handily beat earnings results and have strong positive reactions. They could be among the leaders of the stock market if the market can recover.

What to do in the new stock market rally?

Despite the recent gains, now is not the time to aggressively jump back into stocks with both feet, but to take a deliberate approach. Exposure should be limited to a maximum of 20% of the portfolio for most investors. Aggressive investors should stay below 40% until the market starts to prove itself.

This is an important time to read IBD’s The Big Picture column. After Friday’s strong gains, investors are looking to put their curated watchlists to work jumping for future breakthroughs. But not all follow-throughs work, so it’s important to increase exposure slowly and methodically as the new uptrend proves itself.

If the uptrend is real and meaningful, there is plenty of time to monetize successful breakouts. At this point, it is important to be disciplined in increasing exposure as the new stock rally strengthens.

Five Dow Jones Stocks to Watch Now

Dow Jones Stocks to Watch: Merck, UnitedHealth

Dow Jones member and IBD 50 stock Merck breaks past the 93.12 buy point of a double bottom, according to pattern recognition from IBD MarketSmith. Shares rose 1.8% on Monday and ended in the 5% buy zone, rising to 97.78. Third quarter results are expected before the opening bell on Thursday.

Healthcare giant UnitedHealth is approaching the 553.23 buy point of a cup-and-handle, according to pattern recognition from IBD MarketSmith. Shares rose 1.5% on Monday, moving closer to the stock’s latest entries.

Top Stocks to Watch: AutoZone, Cardinal, Eli Lilly, Texas Roadhouse

Auto parts leader and recent IBD share of the day AutoZone breaks above a cup base 2,362.34 buy point and races up 4.6% on Monday. The 5% chase zone increases to 2,480.46.

IBD Leaderboard shares Cardinal Health is in the buy range past the 71.22 entry from a short head-and-handle, according to the IBD MarketSmith chart analysis. Stocks are also breaking past the 72.38 buy point from a flat base. Revenues are scheduled for November 4.

IBD SwingTrader stock Eli Lilly closed further into the buy range past the 335.43 buy point from a flat base and was up 2.1% on Monday.

Texas Roadhouse is trying to regain the 95.52 buy point from a flat base after a short breakout last week. Shares ended just above the entry on Monday. The win will be announced on Thursday.

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla stock

Tesla shares fell as much as 7.4% on Monday before cutting losses to 1.5% after prices for its Model 3 and Model Y cars were slashed by as much as 9% in China. Shares hit their lowest level since June 2021.

The stock closed about 49% from its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 1.5% on Monday and are about 18% off their 52-week high. Despite a recent rally, the stock remains below the 50 and 200 day limits. Apple earnings are on tap Thursday after the close.

Microsoft rose 2.1% on Monday, rising for the second day in a row. Shares are in rebound mode after hitting a 52-week low on Oct. 13. The software giant is staying around 30% of its 52-week high. Microsoft’s earnings are expected at the end of Tuesday.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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