Dow Jones Rallies 400 Points, What To Do Now; 4 Tech Titans Report Earnings

Dow Jones futures were lower ahead of Tuesday’s open after the Dow Jones Industrial Average rallied more than 400 points Monday. Tech titans Alphabet, Apple, Meta Platforms and Microsoft have earnings due this week.

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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) will also be among the key reporters Tuesday morning.

Stock Market Today: Chinese Stocks Plunge

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

Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved up 1.1% and SPDR S&P 500 (SPY) rallied 1.2%.

Chinese stocks were pummeled Monday, as China’s Hang Seng Index dived 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 to the party’s most powerful decision-making body after securing a convention-defying third term.

Alibaba (BABA) and Baidu (BIDU) tumbled more than 12% apiece. Daqo New Energy (DQ) dived nearly 7%, and Li Auto (LI) plunged 17%. And Pinduoduo (PDD) crashed 24%.

EV giant Tesla (TSLA) slashed losses to 1.5% after hitting a new 52-week low. Among Dow Jones stocks, Apple (AAPL) traded up 1.5% and Microsoft (MSFT) climbed 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 put their watchlists into action.

Cardinal and Texas Roadhouse are IBD Leaderboard stocks. Eli Lilly is an IBD SwingTrader stock. UnitedHealth was featured in this week’s Stocks Near A Buy Zone column, 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 lost 0.1% vs. fair value, while S&P 500 futures moved down 0.15%. Nasdaq 100 futures were down 0.15% vs. fair value. Remember that overnight action 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 ticked higher to 4.23% Monday, settling at its highest level since June 2008. Meanwhile, U.S. oil prices edged lower Monday, pausing after a three-day win streak. West Texas Intermediate futures traded near $85 a barrel.

Q3 Earnings Season: Alphabet, Apple, Meta, Microsoft To Report

Third-quarter earnings season rolls on this week, with key reports coming from tech titans Alphabet (GOOGL), Apple (AAPL), Meta Platforms (META) and Microsoft (MSFT).

Results from Boeing (BA), Chevron, Merck and Visa (V) are also due out throughout the week.

Earnings reports cause many of the largest moves in stocks, and they require special attention. Strong earnings can fuel top stocks to previously untouched levels — and above new buy points — while a less-than-impressive announcement can send shares tumbling.

The stock market’s reaction to an earnings release can often tell you more than the earnings themselves. If the results seem strong but the stock slides anyway, investors may be concerned about the sustainability of growth, rising costs or other potential negatives.

With the market in rally attempt mode, investors should be tracking companies that handily beat earnings results and have strong upside reactions. They could be among the stock market’s leaders if the market is able to rebound.

What To Do In The New Stock Market Rally

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

Now is an important time to read IBD’s The Big Picture column. Following Friday’s powerful gains, investors want to put their curated watchlists to work, in order to jump on future breakouts. But not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the new uptrend proves itself.

If the uptrend is real and meaningful, there will be plenty of time to make money with successful breakouts. Right now, it’s important to be disciplined in raising exposure as the new stock market rally strengthens.

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Merck, UnitedHealth

Dow Jones member and IBD 50 stock Merck is breaking out past a double bottom’s 93.12 buy point, according to IBD MarketSmith pattern recognition. Shares rose 1.8% Monday, finishing in the 5% buy area that goes up to 97.78. Third-quarter earnings results are due Thursday before the opening bell.

Health care giant UnitedHealth is approaching a cup-with-handle’s 553.23 buy point, according to IBD MarketSmith pattern recognition. Shares rallied 1.5% Monday, moving closer to the stock’s latest entry.

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

Auto parts leader and recent IBD Stock Of The Day AutoZone is breaking out past a cup base’s 2,362.34 buy point, racing 4.6% higher Monday. The 5% chase zone goes up to 2,480.46.

IBD Leaderboard stock Cardinal Health is in buy range past a short cup-with-handle’s 71.22 entry, according to IBD MarketSmith chart analysis. Shares are also breaking out past a flat base’s 72.38 buy point. Earnings are slated for Nov. 4.

IBD SwingTrader stock Eli Lilly closed further in buy range past a flat base’s 335.43 buy point, climbing 2.1% Monday.

Texas Roadhouse is trying to reclaim a flat base’s 95.52 buy point after a brief breakout move last week. Shares finished Monday just above the entry. Earnings are due out Thursday.

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

Tesla Stock

Tesla stock dived as much as 7.4% Monday before slashing losses to 1.5% after reducing prices for its Model 3 and Model Y cars by as much as 9% in China. Shares hit their lowest level since June 2021.

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

Dow Jones Leaders: Apple, Microsoft

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

Microsoft rose 2.1% Monday, rising for a second straight day. Shares are in rebound mode after hitting a 52-week low on Oct. 13. The software giant remains about 30% off its 52-week high. Microsoft earnings are due late 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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