Dow Jones Futures Climb As Tesla Stock Dives On Deliveries Miss
Dow Jones futures climbed more than 200 points, while Nasdaq 100 futures inched higher Monday morning to kickstart the fourth quarter of 2022. Tesla stock slid after the company reported record third-quarter vehicle deliveries on Sunday, but they came in well below views.
Acuity Brands (AYI), Conagra Brands (CAG), Constellation Brands (STZ) and McCormick (MKC) are among the key earnings reporters this week.
Electric-vehicle leader Tesla (TSLA) traded 5% lower Monday. Tech titans Apple (AAPL) and Microsoft (MSFT) were mixed ahead of today’s stock market open. Chevron (CVX) was one of the Dow’s top performers, rising more than 2% as U.S. oil prices jumped.
In the ongoing stock market weakness, DoubleVerify (DV), Hostess Brands (TWNK), Neurocrine Biosciences (NBIX), Toro (TTC), Vertex Pharmaceuticals (VRTX) and World Wrestling Entertainment (WWE) — as well as Dow Jones stock UnitedHealth (UNH) — are among the top stocks to watch. Keep in mind that the deepening stock market correction is a time for investors to sit on the sidelines and map out watchlists.
DoubleVerify and Vertex are IBD Leaderboard stocks. Hostess and Toro were featured in last week’s Stock Near A Buy Zone column. Neurocrine Biosciences was a recent IBD Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Monday’s opening bell, Dow Jones futures rose 0.8% vs. fair value, while S&P 500 futures gained 0.7%. Nasdaq 100 futures moved up 0.3% in morning action.
Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 0.3%, and the SPDR S&P 500 ETF (SPY) rose 0.7%.
The 10-year Treasury yield fell significantly to 3.71% Monday morning. Last week, the 10-year Treasury yield briefly topped 4%, which hadn’t been done for more than decade.
Meanwhile, U.S. oil prices jumped more than 4% Monday, as West Texas Intermediate futures traded at $83 a barrel. Last week, they fell to their lowest level of the year. On Wednesday, OPEC+ will meet to consider a production cut in order to help prop up falling oil prices.
Stock Market Correction
On Friday, the Dow Jones Industrial Average sold off 1.7%, while the S&P 500 closed down 1.5%. The Nasdaq composite also lost 1.5%. The market averages have now fallen for a third consecutive quarter for the first time since 2009. Meanwhile, the Dow and S&P 500 notched their biggest monthly losses since March 2020.
Friday’s The Big Picture column commented, “The blue chip index closed at levels last seen in November 2020 as it dived 1.7% for the day and 2.9% for the week. It ended September down almost 9% and has now fallen in each of the past three weeks. Nike (NKE) was by far the worst performer, plummeting 12.8% on quarterly results.”
With the major stock indexes at new correction lows, investors are still looking for another rally attempt. Amid the continued selling, investors should remain in cash.
Nevertheless, it is important for investors to put this downtime to good use. Now is an ideal opportunity to study market bottoms and to build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the follow-through day, the market bottoming signal. Missing that early opportunity can be a costly mistake.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: UnitedHealth
Dow Jones stock UnitedHealth continues to hold above its long-term 200-day line. Shares are building a flat base that has a 553.23 buy point, according to IBD MarketSmith chart analysis. The stock’s resilience — its relative strength line hit a new high Friday — made it Tuesday’s IBD 50 Stocks To Watch pick. Shares inched higher Monday morning.
UNH stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: DoubleVerify, Hostess, Neurocrine, Toro, Vertex, WWE
IBD Leaderboard stock DoubleVerify closed just below its 28.07 buy point in a bottoming base after Friday’s 1.5% fall. Per Leaderboard commentary, DoubleVerify found support near its 50-day line and has a relative strength line at new highs. Shares traded flat Monday.
Twinkie maker Hostess Brands is clinging to its 23.23 buy point out of a cup with handle, according to IBD MarketSmith chart analysis. Bullishly, Hostess’ relative strength line continues to make new highs. Keep in mind that the weak market trend should keep you on the sidelines, but it is one of the top stocks to watch. The stock was inactive Monday.
Neurocrine Biosciences is still building a flat base that has a 109.36 buy point. Shares decisively regained their 50-day line during Friday’s 3.4% jump. The RS line hit a new high last week. Shares were unchanged Monday.
Toro stock is in a flat base and about 5% away from a 92.05 buy point. Shares fell further below their 50-day line after Friday’s 0.4% decline. The RS line is at new highs. Toro shares traded flat Monday.
Vertex Pharmaceuticals decisively regained its 50-day line last week and is forming a flat base with a 306.05 buy point, and an early entry at 296.24. The stock’s resilience makes it a top idea to watch. Shares were unchanged Monday.
World Wrestling Entertainment continues to build a flat base that has a 75.33 entry. The stock is back above its 50-day line and about 7% away from the buy point. WWE shares were flat early Monday.
Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live
Tesla stock fell another 1.1% Friday, closing at its lowest level since July 26. Shares are sharply below their 50-day line. Tesla shares skidded 5% Monday morning after missing deliveries estimates.
Tesla delivered 343,830 EVs in the third quarter, up 42% vs. a year earlier and topping Q1’s record 310,048. It was also 35% higher than Q2’s 254,695. The Shanghai plant faced a lengthy shutdown and slow recovery in Q2 due to Covid lockdowns.
But analysts had expected Tesla deliveries of 350,000-370,000, with the consensus slightly above 360,000. Tesla cited an increased number of vehicles in transit. But that may reflect weaker Chinese demand, spurring an earlier-than-usual export push from Shanghai.
In recent weeks, the stock’s relative strength line reached its highest level since April, but has fallen sharply in recent sessions. Shares are about 35% of their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares slid 3% Friday, extending a losing streak to three sessions and falling to its lowest level since June 30. Apple stock dropped 0.5% Monday morning.
Microsoft dropped 1.9% Friday, hitting another 52-week low. The software giant is more than 33% off its 52-week high. Microsoft shares rose 0.7% early Monday.
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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