The Dow Jones Industrial Average rose 375 points on Monday as the stock market appeared to be recovering from last week’s sharp losses. VMware (VMW) rose 18% in early trade Monday after Bloomberg said Broadcom (AVGO) was in talks to buy the cloud service provider. In response, Broadcom shares tumbled 4%.
Electric vehicle giant Tesla (TSLA) fell nearly 1% Monday morning. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) edged higher in stocks today.
Dow leaders Chevron (CVX) and Merck (MRK) along with Northrop Grumman (NOC), Eli Lilly (LLY), Exxon Mobil (XOM) and World Wrestling Entertainment (WWE). One of IBD’s top stocks to watch on Monday.
Microsoft is an IBD leaderboard stock. Merck on IBD SwingTrader. Eli Lilly and Merck featured in last week’s “Stocks Near the Buy Zone” column.
Dow Jones Today: Treasury yields, oil prices
After the opening bell on Monday, the Dow Jones Industrial Average rose 1.2% and the S&P 500 gained 1.1%. The tech-heavy Nasdaq rose 0.9% in early trade.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.9%. The SPDR S&P 500 ETF (SPY) rose 1.1%.
The 10-year U.S. Treasury yield rose to 2.82% on Monday morning after closing at 2.78% on Friday. The 10-year government bond yield closed at its lowest level since April 26 after falling for a second straight week. Meanwhile, U.S. oil prices rose less than 1%, with West Texas Intermediate crude trading at $111 a barrel.
Tough stock market rally
The major indexes were mixed on Friday, with the Dow Jones Industrial Average and S&P 500 inching up slightly, while the Nasdaq closed slightly lower.
Friday’s The Big Picture op-ed commented: “The Dow Jones Industrial Average completed a bullish reversal in the final hour of trading Friday with modest gains. The Nasdaq Composite performed about the same, but closed down 0.3% as the market Losses in the range led to an early end to another confirmed uptrend.”
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Keep an eye on Dow Jones stocks: Chevron, Merck
According to IBD MarketSmith chart analysis, Dow leader and energy giant Chevron continues to build a steady base with a 174.86 buy point. Stocks halted losses on Friday near the 50-day moving average. CVX shares rose 1.3% on Monday.
According to the IBD Stock Checkup, CVX stock has an IBD Composite Rating of 99. Investors can easily gauge the quality of a stock’s fundamentals and technical indicators using the IBD Composite Ratings.
Merck, a stock of Dow Jones and IBD SwingTrader, was trading toward the top of its buy range above the cup and dealing with an 89.58 buy point as it rose 1.6% on Friday. The 5% buy range is 94.06. MRK shares were up 0.9% on Monday morning.
The stock’s relative strength line continued to set new highs on Friday, a strong indicator of stock market outperformance during the current correction.
Stocks to watch: Northrop Grumman, ExxonMobil, Eli Lilly, WWE
IBD stock Northrop Grumman is making a cup with a handle on Wednesday with a buy point of 477.36, according to IBD MarketSmith chart analysis. The stock continued to drop below its 50-day moving average after three straight days of losses. NOC shares rose 0.7% Monday morning.
Energy giant Exxon Mobil was range-bound above the 89.90 cup and handle buy point, up 0.8% on Friday. The stocks are within a 5% buy range, extending to 94.40. XOM shares rose 1.1% on Monday.
Pharmaceutical giant Eli Lilly rose 0.7% on Friday. The IBD Leaderboard stock found support near its 50-day moving average and a flat-bottom buy point at 314.10. An early buy trigger at 309.54 is also in play. Shares of Eli Lilly rose nearly 1% on Monday after SVB Securities launched the stock with an outperform rating and a $341 price target.
World Wrestling Entertainment was one of the most interesting stocks to watch after snapping a four-day winning streak on Friday. WWE stock is back above its 50-day moving average and close to a buy point at the 63.81 flat. Shares rose slightly in early trade Monday.
Tesla shares tumbled more than 6% on Friday and ended the week down 13.7%, hitting their lowest level since late July. Shares threatened to add to those losses Monday morning, down nearly 1%. The stock remains well below its 50-day and 200-day moving averages.
Tesla reportedly aims to resume full production of 2,600 vehicles a day at its Shanghai plant starting Tuesday, Reuters reported on Monday, citing a company memo. That’s more than 1,000 on Monday. The factory has stopped production due to the country’s Covid lockdown.
The stock traded as low as 1,243.49 on Nov. 4, down about 47% from its all-time high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.2% on Friday. The stock is well below its 200-day long-term moving average and about 25% below its 52-week high. Apple shares rose 0.6% on Monday.
Software leader Microsoft fell 0.2% on Friday, its third straight day of losses. MSFT stock is well below its 50-day and 200-day moving averages. The stock closed about 28% below its 52-week high. Microsoft shares rose 0.7% on Monday.