Tesla Climbs on Strong China Sales While Dow Jones Prices Rally
Dow Jones prices increased early Tuesday, as stock market pessimism extended just after Dow 30 hit resistance at a significant level. Tuesday’s positive China sales figures rallied Tesla shares.
The Dow Jones Industrial Average declined 0.7% on Monday. Also, the S&P 500 declined 0.7%, while the Nasdaq began declining 0.6% to close at day lows.
In the current stock market, Apple (AAPL) declined only 0.1%, whilst Microsoft (MSFT) declined 0.2%. In this current stock market downturn, American Express (AXP), Merck (MRK), and Salesforce.com (CRM) are looking for fresh buying points.
TSLA Stock price increased over 1% on Monday, rising above the stock’s most recent buy target. For September, the EV giant’s China sales were reported earlier Tuesday.
Among some of the biggest shares to watch are Advanced Micro Devices (AMD), Netflix (NFLX), and Palo Alto Networks (PANW), all of which are in or approaching potential buy zones, despite the fact that the stock market is still in a downturn.
IBD Leaderboard shares include Advanced Micro Devices, Microsoft, and Tesla. Also, Palo Alto Networks is a share recommended by IBD SwingTrader. Stocks Near a Buy Zone column of this week, Microsoft and Salesforce, are featured.
The Dow Jones Industrial Average Closes Lower in a Row
The Dow Jones Industrial Average closes lower as U.S. stocks decline for the third market day in a row ahead of company profits.
Inflation fears continued to weigh on optimism ahead of the unofficial beginning of the third earnings season, as U.S. shares closed lower on Tuesday just after wavering between little losses and gains previously in the stock market.
What Were the Major Indexes’ Market Movements?
- The Dow Jones Industrial Average DJIA, -0.34% closed at 34,378.34, dropped 117.72 points, or 0.3%.
- The S&P 500 SPX, -0.24% closed at 4,350.65, dropped 10.54 points, or 0.2%.
- The Nasdaq Composite COMP, -0.14% closed at 14,465.92, dropped 20.28 points, or 0.1%.
All three major indexes were decreased for the third time in a row.
What Causes The Market To Be Like This?
As earnings season about to begin, traders are concerned that CEOs will declare that supply problems and inflation are reducing company profits, which may deal another shock.
In a phone interview, Jack Janasiewicz, who is the lead portfolio strategist at Natixis Investment Managers Solutions, stated “, “There’s a lot of consternation in the market right now circling around the growth outlook as it relates to the impact of higher energy prices” and slowdowns in the globalized economy.
“That has a direct impact on earnings season,” he added. “All of us are sort of on hold waiting to hear and see” how firms are faring in the face of increasing prices and wages.
According to S&P Global Ratings, operating income for S&P 500 participants are expected to increase by 25% in the third quarter. EPS increased by an above average 89% in the second quarter.
“Many businesses that move or produce things have issued profit warnings due to rising input prices and supply chain-related output shortfalls.” This is reflected in cautious analyst average earnings per share expectations for the third quarter,” said David Bianco, who is DWS’s chief investment officer for the Americas.
By the end of the year, DWS continues to anticipate a 4,400 level for the S&P 500.
Furthermore, the International Monetary Fund forecasts economic expansion of 5.9% this year, declining one-tenth of a percentage point from its July projection, before declining to 4.9% in 2022. The IMF decreased its 2021 growth prediction for the United States by 1% to 6%, Germany by five-tenths to 3.1%, and Canada by six-tenths to 5.7%.
The National Federation of Independent Business reported that its optimism index in September declined one point to 99.1, the lowest level since March, as small-business owners remained dissatisfied by supply and skilled trades shortages.
As per a federal data released in August, job openings in the United States fell to 10.4 million, down from an all-time high of 11.1 million in July. As companies struggled to fill the positions, a record number of staff resigned in August.
How Is Dow Jones Today?
Dow Jones futures rose 0.1% versus market price ahead of the stock market’s open on Tuesday, whilst S&P 500 futures rose 0.15%. Nasdaq 100 futures increased by 0.3% versus market value. Take into account that investing in Dow Jones futures and other futures does not always transfer to actual investing in the following regular stock market sessions.
Both S&P and Nasdaq 500 remains around last week’s downturn low points, but also, both extended Friday’s declines with modest losses on Monday. Likewise, the Dow Jones Industrial Average hit barriers at its 50-day trend line once more.
The Big Picture said on Friday, “With major stock indexes still trading below their 50-day trend lines, the stock market remains vulnerable to further declines, although a follow-through day might happen at any time. And bulls in the stock market are encouraged by the amount of growth stocks that continue to prove strength and support following previous breakouts.”
We would also like to mention another issue. Which is about blue-chip names to analyze in today’s stock market activity include Dow Jones leaders American Express, Merck, and Salesforce.
As per IBD MarketSmith chart analysis, IBD SwingTrader share American Express is targeting a 179.77 buy point. Shares were down 1% on Monday and are now roughly 3% below the new buy price.
Merck later fell almost 1% on Monday, following the Friday’s 1.6% decline. Recently, the corporation and its collaborator Ridgeback Biotherapeutics requested approval from the FDA for its experimental Covid pill. Merck shares surged over a 79.33 buy price in a flat base on October after the corporation said that the medication reduced the risk of serious health problems by 50% in a final-phase study. The stock continues in the buy zone, but the breakout gains are fading away.
After the breakout move on September 23, Dow Jones software leader Salesforce is attempting to regain a 275.32 buy goal. The stock rose 0.5% on Monday, closing just below the point of entry.
Both Salesforce and American Express have a relatively high strength level, and these relatively high strength levels in times of general market downturn signal future market leaders.