Dow Jones Futures Drop As Target Dives On Profit Warning
Dow Jones futures dropped Tuesday, as Treasury yields eased from Monday’s gains. Retail giant Target (TGT) sank more than 9% after warning profits would fall and announcing plans to quickly unload excess inventory. The Target news sent retail stocks sprawling, taking the hardest early hits on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average.
Ahead of Tuesday’s open, key earnings reporters include Academy Sports & Outdoors (ASO), Dave & Buster’s (PLAY) and G-III Apparel (GIII). Academy leapt 6%. Dave & Buster’s jumped more than 6%, while G-III shares rallied nearly 4% early.
Electric-vehicle giant Tesla (TSLA) traded down nearly 3% Tuesday. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) were both squarely lower in today’s stock market. Walmart (WMT) and Home Depot (HD) led the Dow’s early declines.
Amid the ongoing stock market rally, Dow Jones leaders Chevron (CVX) and Merck (MRK) — along with Albemarle (ALB), Eli Lilly (LLY), Northrop Grumman (NOC), Vertex Pharmaceuticals (VRTX) and Zim Integrated Shipping (ZIM) — are among IBD’s top stocks to watch for Tuesday.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s open, Dow Jones futures dropped 0.8% vs. fair value, while S&P 500 futures moved down 1%. Nasdaq 100 futures sold off 1.3% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
The 10-year Treasury yield threatened to give back a part of Monday’s gains, easing to 3.03% Tuesday morning. Meanwhile, U.S. oil prices were slightly lower but holding well within their recent range, with West Texas Intermediate just above $118 a barrel.
Treasury Secretary Janet Yellen will appear before the Senate Finance Committee on Tuesday and the House Ways and Means Committee on Wednesday.
Stock Market Rally
The major stock indexes posted slightly positive action Monday, as the stock market rally continued.
Monday’s The Big Picture column commented, “Friday’s tumble cost the Nasdaq 2.5% worth of gains and the S&P 500 1.6%. Then came Monday’s vanishing gains. A tentative conclusion is that the fast rebound needed a pause. With only one distribution day so far in the major indexes, investors can still afford some exposure to stocks.”
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Dow Jones Stocks To Watch: Chevron, Merck
Dow Jones leader and energy giant Chevron is trading just above a flat base‘s 174.86 buy point, according to IBD MarketSmith chart analysis, following Monday’s 0.4% loss. The 5% buy zone tops out at 183.60. CVX shares traded slightly lower Tuesday.
CVX stock boasts a 98 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.
Merck, a Dow Jones and IBD Big Cap 20 stock, is still in buy range past a cup-with-handle’s 89.58 buy point despite a five-day losing streak, as shares fell 0.1% Monday. The 5% buy area goes up to 94.06. MRK shares inched up 0.2% Tuesday morning.
The stock’s relative strength line hit a new high in mid-May, but is now pulling back sharply.
Stocks To Buy And Watch: Albemarle, Eli Lilly, Northrop, Vertex, Zim
IBD Leaderboard stock Albemarle is about 8% away from a cup with handle’s buy point at 273.78, according to IBD MarketSmith chart analysis. In recent weeks, Albemarle passed an early buy point near 248. ALB shares dropped 1.7% Tuesday morning.
Pharmaceutical giant Eli Lilly climbed 0.6% Monday after the company delivered a promising update for its experimental obesity treatment. Lilly stock is trading just below a flat base’s 314.10 buy point following a May 27 breakout. LLY shares rose about 0.2% Tuesday.
Northrop Grumman broke out last week past a cup-with-handle’s 477.36 buy point and moved further above the entry Monday. The defense contractor also is moving above a trend line within its handle that had an early entry around 464. NOC shares were flat Tuesday morning.
Vertex Pharmaceuticals is tracing a cup with handle with a 276.10 buy point. For now, shares are seeing some support around their 50-day line. A strong bounce from this area would likely lead to a breakout. Conversely, a sharp break of the 50-day line would mean the basing process needs more time. Vertex shares dipped 1.1% Tuesday.
IPO Leader Zim Integrated is tracing a cup with handle that has a 68.80 buy point. Shares are about 1% away from the correct buy point after Monday’s 0.7% fall. ZIM shares lost nearly 1% early Tuesday.
Tesla stock rallied 1.6% Monday, recovering a small portion of Friday’s 9.2% dive. Shares threatened to erase this week’s early gains, sliding nearly 3% Tuesday morning.
The stock is falling further below its 50- and 200-day moving averages. Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 43% off that record high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.5% Monday. The stock remains far below its long-term 200-day line. AAPL stock traded down 1.5% Tuesday.
The company’s WWDC event kicked off Monday. Apple touted features of its next smartphone operating system that will power the upcoming iPhone 14 and older compatible handsets. It also showed off a second-generation Mac processor for two new laptops.
Software leader Microsoft slipped 0.5% Monday, and remains sharply below its 50- and 200-day lines. The stock closed more than 20% off its 52-week high. MSFT shares were down 0.9% 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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