The Dow Jones Industrial Average rallied Tuesday, as the June-quarter earnings season gathered momentum. Reports from IBM, Halliburton, Johnson & Johnson and Lockheed Martin influenced early trade. Netflix reports earnings after the close.
IBM shares dived 7% in morning trade. Halliburton jumped 3%. Johnson & Johnson gained 1%. And Lockheed Martin slid 2% in early trade.
Tesla traded up around 0.5% early Tuesday. Elsewhere, Dow Jones tech leader Apple rose 0.5% and Microsoft gained 1.1% after today's stock market open.
In a volatile stock market environment, Dow Jones leaders Johnson & Johnson, Merck and UnitedHealth — as well as Dollar Tree, Northrop Grumman, Quanta Services and Verra Mobility — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay defensive.
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UnitedHealth is an IBD Leaderboard stock. Dollar Tree is an IBD SwingTrader stock. Verra was featured in this week's Stocks Near A Buy Zone column and was IBD's Stock Of The Day on Monday.
Dow Jones Today: Treasury Yields, Oil Prices
After Tuesday's open, the Dow Jones Industrial Average moved up 0.8%, and the S&P 500 gained 1.1%. The tech-heavy Nasdaq composite rose 1.15%. Remember that overnight action in Dow 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 moved up 1.1%. The SPDR S&P 500 ETF rose 1.05%.
The 10-year Treasury yield ticked higher to 2.98% Tuesday morning, adding to Monday's rise to 2.93%. Meanwhile, U.S. oil prices retreated, falling around 2% in early action. West Texas Intermediate traded near $97 per barrel.
June housing starts and building permits data came out from the Commerce Department at 8:30 a.m. ET. Housing starts missed Econoday estimates, while housing permits came in above expectations.
Investors will be alert to whether the forward-looking permits data corroborates July's Housing Market Index, released by the National Association of Home Builders on Monday, which showed the second-largest one-drop in builder sentiment in the index's 37-year history.
Stock Market Rally
On Monday, the stock market posted disappointing action, as the major stock indexes reversed lower. The Dow Jones Industrial Average fell 0.7% after rallying as much as 1.1% at its intraday peak. The S&P 500 moved down 0.8% after rising as much as 1.1%. And the tech-heavy Nasdaq composite reversed an early 1.5% gain into a 0.8% loss.
Monday's The Big Picture column commented, "Sitting in a healthy cash position with limited exposure to individual stocks makes the most sense at this point. When institutional money starts coming in from the sidelines again, that's when you'll see better candidates. Until then, tread cautiously."
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.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Dow Jones Earnings: IBM, Johnson & Johnson
IBM reported better-than-expected Q2 results late Monday. But shares fell 7% in early trade. The company reported adjusted earnings of $2.31 a share on revenue of $15.5 billion. Analysts were expecting adjusted earnings of $2.27 on revenue of $15.1 billion. However, UBS analyst David Vogt warned that deceleration in software constant-currency growth and a deteriorating consulting book-to-bill ration indicated that the company's organic growth had peaked. IBM stock closed Monday about 5% off its 52-week high.
Dow Jones leader Johnson & Johnson ended Monday about 4% below a double-bottom base's 181.84 buy point, according to IBD MarketSmith chart analysis. J&J topped second-quarter sales and earnings estimates but trimmed its full-year outlook. Shares rose 1% in morning trade.
Four Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Merck, UnitedHealth
Drug giant Merck slid 2.8% Monday, falling further below its flat base's 95.02 buy point. Merck shares traded up 0.5% early Tuesday.
Health insurance giant and IBD Leaderboard stock UnitedHealth is in buy range above its double-bottom-with-handle base's 518.80 buy point after Monday's 2% drop. Shares rose 0.3% Tuesday.
UNH stock shows a strong 96 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 Rally
Top Stocks To Watch: Dollar Tree, Northrop, Quanta, Verra
IBD SwingTrader stock Dollar Tree is still in buy range above its cup-with-handle's 166.45 buy point. Another positive note is the discount retailer's RS line, which hit a new high last week. Dollar Tree stock shows a strong 97 out of a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup. Dollar Tree shares rose 0.7% Tuesday.
IBD Leaderboard stock Northrop Grumman is building a new flat base that has a 492.40 buy point. NOC shares are still below support around their key 50-day line. The stock was down 1% Tuesday.
Quanta Services is putting the finishing touches on a cup-with-handle base that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Shares are about 5% away from the latest entry after Monday's slight fall. Shares traded up 1% in morning trade.
Verra Mobility is trying to break out past a cup with handle's 16.83 buy point. Shares briefly topped the entry early Monday, but they closed mildly below the buy point. The stock's RS line continues to show tremendous strength as it hit a new high Monday. Verra shares moved up 2% Tuesday morning.
Netflix Earnings
Netflix earnings are due out late Tuesday. The company's is expected to earn $2.96 a share, flat vs. the year-ago period on sales of about $8.03 billion. Revenue is expected to climb 9% year over year.
Last quarter, the company forecast losing 2 million subscribers in the June quarter amid price hikes and increased competition. Wall Street analysts now expect the video streamer to lose 1.72 million subscribers in Q2.
Netflix stock closed Monday more than 70% off its 52-week high.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rose 0.2% Monday, extending a win streak to four sessions. Shares are trying to decisively regain their 50-day line, but remain deeply below their 200-day line. Tesla stock traded as high as 1,243.49 on Nov. 4. Shares are about 42% off that record high. The stock rose 0.5% Tuesday.
The EV giant's earnings are due out Wednesday after the stock market closes. Analysts expect the company's earnings to rise 28% to $1.86 per share on revenues of $16.5 billion.
Tesla delivered 254,695 vehicles in Q2, roughly in line with lowered Wall Street estimates. FactSet analysts expect deliveries to ramp up in the second half of 2022, with chip supply slowly increasing. Wall Street sees Tesla notching 1.4 million units by the end of the year.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 2.1% Monday, snapping a two-day win streak. Apple remains above its 50-day line after bullish action in recent weeks. Shares remain far below their long-term 200-day line and are about 20% off their 52-week high. Apple earnings are due out July 28. The stock rose 0.5% Tuesday morning.
Microsoft dropped 1% Monday, again finding resistance around its 50-day line. The stock closed about 27% off its 52-week high. The software giant will report quarterly results on July 26. Microsoft shares gained 1.1% early Tuesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
