Dow Jones Futures Rise After Stock Market Stages Nasty Reversal With Netflix, Tesla Earnings Due

Dow Jones futures were higher following Monday’s nasty stock market reversal ahead of Netflix earnings, due out Tuesday. Tesla earnings are on deck for Wednesday.

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Earnings season continues, with reports out from Dow Jones stock IBM (IBM) and Johnson & Johnson (JNJ), along with Halliburton (HAL) and Lockheed Martin (LMT). IBM reported late Monday, while J&J, Halliburton and Lockheed will report early Tuesday.

Stock Market Today

On Monday, 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 lost 0.8% after gaining as much as 1.5% in earlier trade.

Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) dropped 0.85%, and the SPDR S&P 500 ETF (SPY) declined 0.8%.

Bank of America (BAC) inched higher after its second-quarter results. Charles Schwab (SCHW) declined 1.5% despite a strong earnings report, while Goldman Sachs (GS) jumped 2.5% on better-than-expected earnings results.

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Tesla (TSLA) slashed gains to 0.2% Monday. Among Dow Jones leaders, Apple (AAPL) sold off 2.1% on reports that the company plans to slow hiring and spending growth next year to prepare for a potential recession. Microsoft (MSFT) traded 1% lower in today’s stock market.

In the volatile stock market environment, Dow Jones leaders Johnson & Johnson, Merck (MRK) and UnitedHealth (UNH) — as well as Dollar Tree (DLTR), Northrop Grumman (NOC), Quanta Services (PWR) and Verra Mobility (VRRM) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay more defensive.

UnitedHealth is an IBD Leaderboard stock. Dollar Tree is an IBD SwingTrader stock. Quanta was Thursday’s IBD Stock Of The Day. Verra was featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Futures Today: Treasury Yields, Oil Prices

After Monday’s close, Dow Jones futures rose 0.15% vs. fair value, and S&P 500 futures gained 0.3%. Nasdaq 100 futures were up 0.3% vs. fair value. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield ticked higher Monday, closing at 2.96%. Meanwhile, U.S. oil prices rebounded nearly 5%, with West Texas Intermediate trading above $99 per barrel.

Stock Market Rally

Individual stock action has been mostly improving in recent trading sessions, which is a good start during a struggling stock market rally. Still, be more conservative and keep positions small when it comes to new buys. Don’t raise exposure too quickly, especially amid plenty of uncertainty. Monday’s sharp reversal just provides more confirmation of a difficult environment in which to make progress.

Friday’s The Big Picture column commented, “The Nasdaq composite rose 1.8% and looks ready for another rendezvous with its 50-day moving average. Stock market bulls want to see the index back above this key level. If it can do that, a tradable rally could gain even more traction.”

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.

Four Dow Jones Stocks To Watch Now

Dow Jones Earnings: IBM, Johnson & Johnson

IBM reported better-than-expected Q2 results late Monday. But shares fell more than 3% in extended 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. IBM stock ended about 5% off its 52-week high.

Dow Jones leader Johnson & Johnson remains below a double-bottom base’s 181.84 buy point, according to IBD MarketSmith chart analysis, after Monday’s 2.2% decline. The company reports early Tuesday.

Dow Jones Stocks To Watch: Merck, UnitedHealth

Drug giant Merck dropped 2.8% Monday, and is about 3% below its flat base’s 95.02 buy point.

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.

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 moved further above its cup-with-handle’s 166.45 buy point Monday, rising 0.9%. On another positive note, the discount retailer’s RS line is right at new highs. Dollar Tree stock shows a strong 97 out of a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup.

Northrop Grumman fell below its key 50-day line, as it continues to build a flat base that has a 492.40 buy point. NOC shares were down 2.6% Monday.

Quanta Services is putting the finishing touches on a cup with handle that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Shares are about 8% away from the latest entry after Monday’s 0.8% loss.

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 continued to show tremendous strength as it hit a new high Monday.

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

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.

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 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. The stock is about 20% off its 52-week high. Apple earnings are due out July 28.

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.

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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