The Dow Jones Industrial Average reversed higher Friday, as the Wall Street Journal reported that Federal Reserve officials were debating the size of future interest rate increases. Social media company Snap plunged as much as 27% on weak revenue results. And Dow Jones stocks American Express and Verizon fell on earnings results.
According to the WSJ report, some Fed officials are “signaling their desire both to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy.”
Stock Market Today: Snap Earnings
American Express dropped more than 2% despite better-than-expected earnings and sales results. Verizon traded down around 4% in early action, while Schlumberger shares rose 3% in morning trade.
Snap reported third-quarter results late Thursday that missed revenue estimates but beat on earnings. SNAP stock dived more than 27% in response.
AutoZone (AZO), DoubleVerify (DV), Molina Healthcare (MOH) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Chevron (CVX) and Merck (MRK) — are among the top stocks to watch. Keep in mind that the ongoing stock market rally attempt is the perfect time for investors to build and perfect their watchlists of top growth stocks.
DoubleVerify and Vertex are IBD Leaderboard stocks. Merck and Molina Healthcare were featured in this week’s Stocks Near A Buy Zone column, along with two other top stock ideas. AutoZone was the IBD Stock Of The Day last week. DoubleVerify was Tuesday’s IBD Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
After Friday’s opening bell, the Dow Jones Industrial Average rose 0.6% after reversing from early losses, while the S&P 500 moved up 0.5%. The tech-heavy Nasdaq composite rose 0.1% in morning action.
The 10-year Treasury yield marched higher Friday morning, rising to 4.3% Friday morning, after Thursday’s jump to 4.22%. The 10-year Treasury yield on Thursday settled at its highest level since June 2008.
U.S. oil prices continued to rise Friday, looking to extend a win streak to three sessions. West Texas Intermediate futures moved up near $85 a barrel. Earlier this week, WTI futures traded as low as $81 a barrel.
Meanwhile, natural gas prices swung lower, tacking toward a sixth-straight decline as European Union leaders failed to agree on a cap for gas prices. Natural gas futures fell 4.8%, holding just above $5.10 per million British thermal units. Gas prices remain up 43% for the year, and more than 100% above pre-pandemic price levels.
Stock Market Rally Attempt Continues
On Thursday, the Dow Jones Industrial Average, which had rallied as much as 1.3% midday, declined 0.3%, while the S&P 500 fell 0.8%. The tech-heavy Nasdaq composite lost 0.6%, and the small-cap Russell 2000 struggled, down 1.2%.
Thursday’s The Big Picture commented, “Investors should continue to track 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 follow through higher.”
Psychologically, watching the market work through repeated rally attempts can be a challenging process. Investors want to keep watchlists handy, in order to jump on follow-through day breakouts. But not all follow-throughs work, so buying too soon or with too much conviction can lead to frustration.
This is why it’s important to raise exposure slowly and methodically, as the uptrend proves itself.
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron continues to hold above support at its 50-day line and is consolidating below a 182.50 buy point ahead of the company’s Oct. 28 earnings release. An early entry at 166.93 is also in play. Chevron shares inched higher Friday morning, moving up with rising oil prices.
CVX stock boasts a strong 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.
Dow Jones member and IBD 50 stock Merck gave up its double bottom‘s 93.12 buy point, according to IBD MarketSmith pattern recognition, amid two straight days of losses. The stock’s relative strength line hit a new high last week. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares edged higher Friday morning.
Top Stocks To Watch: AutoZone, DoubleVerify, Molina, Vertex
Auto parts leader and recent IBD Stock Of The Day AutoZone is about 4% away from a cup base’s 2,362.34 buy point. Keep an eye out for a potential handle to offer a lower entry. AutoZone shares were down 0.4% early Friday.
IBD Leaderboard stock DoubleVerify is just shy of a flat base’s 30.02 buy point, according to IBD MarketSmith chart analysis. DoubleVerify provides digital media measurement and data analytics. The company designs verification technology to help reduce ad fraud. It also promises to ensure placement of ads in safe and suitable environments for brands. Shares were down almost 1% Friday.
Molina Healthcare finished Thursday about 2% away from a flat base’s 361.35 buy point. The stock’s RS line hit a new high last week, confirming the health care stock as a leader to watch. Molina’s earnings are expected out on Oct. 26. MOH stock was down 0.4% early Friday.
Biotech leader Vertex Pharmaceuticals is again testing its 50-day line amid this week’s losses. Shares continue to build a flat base that has a 306.05 buy point and an early entry at 296.90. Its RS line made a new high in recent sessions, a sign of big stock market outperformance. Earnings are due Oct. 27. Shares were down 0.5% Friday morning.
Tesla stock dived 6.65% Thursday to hit a new 52-week low after the company’s weaker-than-expected sales results. Shares are about 50% off their 52-week high. Tesla stock dropped another 1% Friday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 0.3% Thursday and are about 21% off their 52-week high and below their 50- and 200-day lines. AAPL stock moved down 0.2% Friday morning.
Microsoft dropped 0.1% Thursday, falling for a second straight session. Shares are still trying to rebound from last week’s 52-week low price. The software giant is about 32% off its 52-week high. Shares moved down 0.2% Friday.
Apple earnings are expected on Oct. 27, while Microsoft’s are due Oct. 25.
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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