The Dow Jones Industrial Average traded sharply lower Monday morning, extending losses from Friday's stock market sell-off.
Potential earnings movers this week include discount retailers Dollar General and Dollar Tree, along with Macy's, Nvidia, Salesforce and Toll Brothers. Palo Alto Networks and Zoom Video report after the close Monday.
Cruise operators were down hard in early action with Norwegian Cruise Lines off 4%. Boeing led declines among the Dow industrials with a 2% loss. Netflix skidded more than 3%, following a downgrade to sell and a modest price-target cut from CFRA.
Chinese stocks showed little response early Monday, after the Chinese central bank again trimmed its key lending rates in an attempt to help revive economic growth. Alibaba shares were flat, while JD.com moved up 1%. Tencent lost nearly 1%.
Electric-vehicle leader Tesla traded down almost 2% Monday morning. Elsewhere, Dow Jones tech leaders Apple and Microsoft both dropped sharply after today's stock market open.
In the current healthy stock market environment, Albemarle, Arista Networks, Costco and Ollie's Bargain Outlet — as well as Dow Jones stocks Coca-Cola, Merck and McDonald's — are among the top stocks to buy and watch.
Albemarle and Costco were featured in last week's Stocks Near A Buy Zone column. Costco stock was added to IBD Leaderboard and SwingTrader in the wake of last week's breakout move. Albemarle was a recent IBD Stock Of The Day.
5 NYSE Stocks To Buy And Watch Now
Dow Jones Today: Treasury Yields, Oil Prices
Early Monday, the Dow Jones Industrial Average dropped 1.4%, while the S&P 500 moved down 1.7%. The tech-heavy Nasdaq composite traded down 2% in morning trade.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust dropped 2%, and the SPDR S&P 500 ETF fell 1.7% in early trade.
The 10-year Treasury yield held steady at 2.98% early Monday, following last week's jump. The 10-year Treasury yield is approaching the 3% level for the first time since July 21.
Meanwhile, U.S. oil prices tumbled after last week's losses saw West Texas Intermediate futures hit their lowest level since January. WTI futures dropped 3%, trading below $88 a barrel.
Stock Market Rally
On Friday, the Nasdaq and S&P 500 broke four-week win streaks with the worst session of the week on Friday. The Dow Jones Industrial Average declined 0.9%.
The next few days will likely be key for the stock market trend, as the Nasdaq and Dow Jones industrials test support levels. Meanwhile, the S&P 500 is falling after finding resistance at its long-term 200-day line, a key area to watch.
Friday's The Big Picture column commented, "The rally could use a breather, and the stock market losses point to at least a period of rest for the major indexes. That's not necessarily a reason for investors to flee entirely to cash, but do make sure your gains don't evaporate."
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.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Coca-Cola, McDonald's, Merck
Dow Jones soda giant Coca-Cola is building a flat base that has a 67.30 buy point. A handle entry at 65.14 is also in play. Shares are rebounding from their 50-day line and trying to top the handle entry. The stock fell 0.5% early Monday.
McDonald's shares are trading just above a 265.56 cup-with-handle entry following last week's breakout move. MCD shares lost 0.6% Monday morning.
Merck also is building a flat base, a pattern that shows a 95.82 buy point. Shares are moving further from their 50-day line, according to IBD MarketSmith chart analysis. Merck shares were down 0.3% Monday.
MRK stock shows a solid 94 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 Buy And Watch In The Current Stock Market Rally
Top Stocks To Watch: Albemarle, Arista, Costco, Ollie's
Lithium producer Albemarle gave up its 273.78 buy point in a large cup-with-handle base amid Friday's 3.4% decline. Shares remain above a smaller cup with handle with a 250.25 buy point. The stock was down more than 1% Monday morning.
Arista Networks, one of last week's IBD 50 Stocks To Watch picks, continues to plod up the right side of a double-bottom base that offers a 143.67 buy point. With the stock about 9% away from the current entry, look for a handle to offer a more risk-optimal buy point. Arista's RS line has been trending higher and is approaching a new high. ANET shares dropped 2% early Monday.
IBD Leaderboard stock Costco remains in buy range above a cup with handle with a 552.81 buy point despite Friday's 1.15% decline. Shares dropped 0.6% early Monday.
Ollie's Bargain Outlet is again testing its 10-week line — a critical support level. Shares previously found support there in late July, which placed the top discount retailer in a new buy zone. Shares are also carving a handle after a large cup base, putting the latest buy point at 72.37. Current price action is about 11% away from that entry. Shares inched lower Monday morning.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock lost 2.05% Friday, extending a losing streak to four sessions. Shares of the EV giant declined another 1.5% Monday morning.
Tesla stock has been wrestling to overcome resistance around its 200-day line. Tesla is about 28% off its 52-week high. Its 3-for-1 stock split is set for Wednesday.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares sold off 1.5% Friday, as the stock continues to build the right side of a cup base that has a 179.71 buy point. Another interpretation could be a large double bottom that spans back to January. Either way, the buy point is identical. The last two days of losses could be the start of a potential handle, which would offer a lower entry.
Bullishly, the stock's relative strength line is already at new highs, indicating big stock market outperformance. Shares dropped 1.2% Monday morning.
Microsoft fell 1.4% Friday, extending a losing streak to four sessions and falling further away from its long-term 200-day line. The stock lost 1.5% early Monday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
