Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were squarely higher late Monday, as Treasury yields fell from recent highs. Tech stocks sold off sharply Monday, as Apple tumbled over 4%, while Tesla stock dived nearly 6%. Former hot stock Stitch Fix plunged more than 20% in overnight trade.
On Monday, the Dow Jones Industrial Average advanced 1%, or 306 points. The blue-chip index hit a record high before cutting gains. The S&P 500 slipped 0.5%, while the tech-heavy Nasdaq composite tumbled 2.4%.
Among the Dow Jones leaders, Apple (AAPL) sold off 4.2% Monday, while Microsoft (MSFT) moved down 1.8% in today’s stock market. On the upside, Disney (DIS) advanced 6.3%, while Visa (V) is in buy range above a new buy point.
Microsoft, Polaris and Tesla are IBD Leaderboard stocks. Alphabet was featured in this week’s Stocks Near A Buy Zone column. Westlake was Monday’s IBD Stock Of The Day.
Dow Jones Futures: Yields Fall
After the stock market close Monday, Dow Jones futures rallied 0.6%, while S&P 500 futures gained 0.8% vs. fair value. Nasdaq 100 futures advanced 1.15% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
U.S. Stock Market Today Overview
Last Update: 4:44 PM ET 3/8/2021
The 10-year Treasury yield advanced as high as 1.606% Monday before closing at 1.596%. The 10-year yield traded around 1.573% in overnight trade.
On Saturday, the Senate passed the $1.9 trillion Biden stimulus plan. House Majority Leader Steny Hoyer said the House plans to vote Tuesday on the Senate version of the stimulus plan. Then, it will go to President Joe Biden to sign.
Stock Market Correction
On March 4, the major stock indexes were rocked with heavy selling, while top growth stocks also crumbled. The Nasdaq dived below last week’s lows, closing at its lowest level since Jan. 4 and turning negative for the year. The tech-heavy composite is down 1.3% in 2021 after rallying as much as 10% from Jan. 1 to its Feb. 16 record high.
IBD’s market outlook was downgraded to “market in correction” on March 4. During periods of severe stock market weakness, investors should be lightly invested — or even in 100% cash — until a follow-through day. Follow-throughs signal a new potential market uptrend and give the green light to start buying stocks again.
Use the downtime as a chance to take a mental break; however, don’t tune out. Be on watch for the next leaders to emerge. One of the best ways to identify the next cycle of leading stocks during stock market corrections is to use the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Friday’s Big Picture commented, “After a morning swoon knocked the Nasdaq to a loss of 2.6%, buyers came back into the market in late-morning trade and major stock indexes ended with bullish gains by the close.” Check out the IBD’s The Big Picture for more stock market commentary.
Stock Market ETF Strategy And How To Invest
Bitcoin traded near sessions highs late Monday, as it briefly topped $54,000. The price of Bitcoin traded around $53,700 in evening action, according to CoinDesk.
The price of Bitcoin hit an all-time high on Feb. 21, topping out at $58,332.
The Grayscale Bitcoin Trust (GBTC) ETF advanced 5.8% Friday, finding support at its 50-day moving average line. The Bitcoin-tracking ETF rallied another 3.65% Monday.
Dow Jones Stocks: Disney, Visa
Inside the Dow Jones Industrial Average, Disney stock surged over 6% after California signaled that Disneyland and California Adventure can reopen April 1.
Shares moved out of the buy zone past a 183.50 buy point in a flat base.
Visa stock is in buy range past a 211.69 buy point in a cup with handle following a Feb. 23 breakout, according to IBD MarketSmith chart analysis. The 5% buy zone goes up to 222.27.
Shares gained 2.3% Monday, and remain in buy range.
Stocks To Watch: Alphabet, Polaris, Westlake
FANG stock leader Alphabet is holding up well in the face of the stock market’s recent weakness. Shares remain extended from a 1,843.93 buy point in a flat base, and are about 2% away from a 2,145.24 entry in a three-weeks-tight pattern.
Shares dropped more than 4% Monday, but they remain above their recent lows.
Polaris broke out past a 129.10 buy point in a flat base Friday with a 5.7% surge. Shares are in the 5% buy zone that tops out at 135.56. Polaris stock rallied 3.7% Monday.
According to IBD Stock Checkup, Polaris stock shows a solid 90 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
Monday’s IBD Stock Of The Day, Westlake Chemical, cleared a 90.46 buy point amid Monday’s 4.1% advance. Shares ended in the 5% buy zone that tops out at 94.98.
Westlake was added to IBD Leaderboard Monday. Per Leaderboard commentary, “The stock’s latest base is second stage, and the relative strength line is making new highs as shares break out. Both are positive elements for the chart.”
Stock Market Earnings: Stitch Fix
After the close Monday, Stitch Fix reported a loss of 20 cents per share, beating estimates. But sales missed consensus targets. The company reported revenue of $504.1 million, below analyst estimates for sales of $512.2 million.
Stitch Fix shares plunged more than 20% in extended trade Monday. The stock ended Monday below its 50-day line, about 40% off its 52-week high.
Tesla stock extended a losing streak to five sessions Monday, tumbling 5.8%. Shares could be forming a new base, but it’s too early to identify a new entry.
On Feb. 22, the electric-auto leader broke down through its key 10-week moving average line, a critical support level.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle. Shares are about 37% off that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple sold off 4.2% Monday. Apple stock remains below its 10-week line, but a strong rebound back above the level would be bullish for the stock’s prospects.
On Feb. 18, Apple stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, Microsoft fell 1.8% Monday. The stock remains below its 232.96 buy point and dropped back below its 50-day line.
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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