The Dow Jones Industrial Average rose Monday ahead of a busy week of key economic data and as the dollar dropped to an eight-month low. A big week of earnings news includes results from Tesla, due out Wednesday. And Advanced Micro Devices surged 6% after a Barclays upgrade to overweight.
On the economic front, data this week includes Tuesday's preliminary January Purchasing Managers' Index for manufacturing and services from researcher Markit. On Thursday, fourth-quarter GDP estimates are due from the Commerce Department along with the Labor Department's weekly jobless claims and December new homes sales numbers from the Census Bureau. Finally, inflation data will wrap up the week on Friday with the Commerce Department's Personal Consumption Expenditures price index.
Oilfield equipment heavyweight Baker Hughes reported earnings Monday morning, with shares gaining more than 1% in morning trade.
Other key earnings this week include Dow Jones members American Express, Boeing, Chevron, IBM, Intel, Johnson & Johnson, Microsoft, Travelers, Verizon Communications and Visa.
Other important earnings are due from ASML, D.R. Horton, Halliburton and Tesla.
Stock Market Today
Spotify advanced more than 3% after announcing layoffs that will cut 6% of its staff. Shopify climbed 4% on a Deutsche Bank upgrade from hold to buy.
Electric-vehicle leader Tesla rallied more than 3% Monday morning. Dow Jones tech giants Apple and Microsoft were both higher after today's stock market open.
IBD Leaderboard stock Fluor, recent IBD Stock Of The Day Medpace, Monster Beverage and Vertex Pharmaceuticals — as well as Dow Jones names Caterpillar, Chevron and Visa — are among the top stocks to buy and watch with the market testing the strength of a new rally.
Fluor and Medpace are IBD Leaderboard stocks. Vertex was IBD's Stock Of The Day on Wednesday. Visa was featured in last week's Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
After Monday's opening bell, the Dow Jones Industrial Average rose 0.2%, and the S&P 500 gained 0.5%. And the tech-heavy Nasdaq composite advanced 1%, with AMD and Tesla among the leaders.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust rose 1% and the SPDR S&P 500 ETF traded up 0.5% early Monday.
The 10-year U.S. Treasury yield rose to 3.53% Monday morning, looking to rise for a third straight session. Still, the 10-year yield is on three-week losing streak that saw it hit its lowest level since mid-September.
The dollar lost ground against competing currencies, on economic news and views that the Fed was set to ease its rate-hike strategy. The Euro climbed above $1.09 against the dollar, while the U.S. Dollar Index dipped to its lowest mark since May.
Oil prices climbed Monday, on pace to extend a win streak to three sessions. West Texas Intermediate futures traded above $82 a barrel, near last week's high price.
Chinese markets are closed all week for Lunar New Year.
Stock Market Rally
On Friday, the Dow Jones Industrial Average rallied 1%, and the S&P 500 jumped 1.9% The Nasdaq Composite surged 2.7% to snap a two-day slide.
Friday's The Big Picture column commented, "With encouraging action at week's end, it makes sense for investors to have 40% to 60% market exposure. But given the risky environment, be ready to reduce this to 20% to 40% if bears regain the upper hand."
Now is an important time to read IBD's The Big Picture column amid the ongoing stock market rally.
Five Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, Visa
Caterpillar is holding in buy range above a flat base's 239.95 buy point after last week's losses. The 5% buy area goes up to 251.95. CAT stock traded up 0.4% Monday.
Energy giant Chevron is rounding out the right side of a cup base with a 189.78 buy point, according to IBD MarketSmith pattern recognition. Keep an eye out for a handle to offer a lower entry. Chevron's fourth-quarter earnings are due Friday. CVX shares rose 0.1% Monday.
CVX stock shows a strong 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Payments leader Visa is trading in buy range above a 220.08 handle buy point in a long pattern. The 5% buy area goes up to 231.08. Visa shares inched lower early Monday, ahead of the company's fiscal first-quarter results due on Thursday.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Top Stocks To Buy And Watch: Fluor, Medpace
IBD Leaderboard stock Fluor is trying to break out past a flat base's 36.16 buy point, and are right at the entry following Friday's 4.4% rise. If shares retake that entry, the 5% buy area tops out at 37.97. FLR stock was up 0.7% early Monday.
Backstory: Fluor manages big infrastructure projects in the oil and gas, chemical, mining and transport industries. This is an earnings turnaround play. A poor Earnings Per Share Rating reflects net losses in 2019 and 2020 and a dip in profit expected in 2022 to 86 cents a share. Analysts, however, see earnings vaulting 95% next year to $1.68 a share.
Medpace inched closer to a consolidation's 235.82 buy point, ending just 3% away from the latest entry. In recent weeks, shares moved above an early entry at 220.09. The company's earnings results are expected on Feb. 13. Medpace shares were up 0.8% early Monday.
Backstory: Medpace is a clinical contract resource organization, or CRO. It helps drugmakers run the clinical studies needed to gain approval for new medicines. In the third quarter, the company issued a bullish outlook for 2023, calling for 18% sales growth at the midpoint of its guidance.
Monster, Vertex Trace Flat Bases
Monster Beverage is squarely below its 50-day line after last week's drop. Shares are tracing a flat base with a 104.75 buy point. MNST stock was down 0.2% Monday.
Backstory: Monster Beverage leads an energy-drink duopoly with privately held competitor Red Bull. The company's portfolio of energy drink brands include Monster Energy, Reign and NOS Energy.
Monster dominates energy drinks in the U.S. and claimed a 39% market share last year, according to Jefferies data, resulting in a record $5.5 billion in revenue for the company. Red Bull accounted for 37% of the American energy drink market in 2021. Upstart Celsius, which is on an impressive growth streak, claimed 4.9% of the market.
Wednesday's IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after bullishly retaking its 50-day line last week. VRTX stock was flat Monday.
Backstory: The company is well-known for its cystic fibrosis treatments — a market that Vertex estimates at 88,000 patients. Of those, there are still 20,000 patients who could receive its old-school oral treatments. But analysts are watching for what's new from Vertex, including an updated regimen of three drugs that could strengthen Vertex's position against rival AbbVie.
Stocks To Buy And Watch In Stock Market Rally
These are seven top stocks to buy and watch in today's stock market, including three Dow Jones leaders.
| Company Name | Symbol | Correct Buy Point | Type Of Base |
|---|---|---|---|
| Monster | 104.75 | Flat base | |
| Fluor | 36.16 | Flat base | |
| Vertex | 324.85 | Flat base | |
| Medpace | 235.82 | Consolidation | |
| Caterpillar | 239.95 | Flat base | |
| Chevron | 189.78 | Cup base | |
| Visa | 220.08 | Cup with handle |
Source: IBD Data As Of Jan. 23, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock raced 4.9% higher Friday, rising 9% for the week and closing at its highest level since Dec. 21. Despite their recent rebound, shares remain sharply below their 50- and 200-day lines. Tesla stock closed Friday about 65% off its 52-week high. Tesla earnings are due Wednesday after the close.
Shares of the EV giant looked to add to Friday's gains, trading up 3.5% Monday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 1.9% Friday, and is eyeing its 50-day line, where it has been trading under since mid-December. The stock remains around 23% off its 52-week high. Apple will report its quarterly earnings on Feb. 2. AAPL stock traded up 1.45% Monday.
Microsoft stock advanced 3.6%, finishing just below its 50-day line, where it found stout resistance last week. A decisive retake would be bullish for the stock's prospects, even though shares remain 24% off their 52-week high. MSFT earnings are due out late Tuesday. Shares were up 0.6% early Monday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
