Prior to reversing course, the Dow Jones Industrial Average temporarily fell more than 250 points on Monday as the yield on the 10-year Treasury note jumped to an 11-year high. The Federal Reserve will decide on interest rates on Wednesday. The main stock indices posed a danger to the stock market’s losses from the previous week.
On Monday morning, AutoZone (AZOearnings )’s moved the needle. On the strength of better-than-expected financial fourth-quarter results, the auto parts retailer’s shares increased 2.5%. Costco (COST), Darden Restaurants (DRI), General Mills (GIS), KB Home (KBH), and Lennar are some additional notable companies reporting earnings this week (LEN).
Leader in electric vehicles Tesla (TSLA) fell lower on Monday, declining 1.7%. After today’s stock market opened, tech giants Apple (AAPL) and Microsoft (MSFT) both had strong declines among the Dow Jones industrials.
Continental Resources (CLR), DoubleVerify (DV), Vertex Pharmaceuticals (VRTX), along with Dow Jones stocks Chevron (CVX) and Merck (MRK), are among the top stocks to monitor in the market’s present slump. Remember that the recent stock market correction is a valid reason for investors to hold off on making any new purchases, if not totally.
Despite being an IBD Leaderboard stock, DoubleVerify’s position size was reduced as a result of last week’s losses. Chevron was discussed in the Stocks Near A Buy Zone column from the previous week.
Treasury Yields, Oil Prices, and a Fed Meeting on the Dow Jones today
The Dow Jones Industrial Average fell 0.4% after the opening bell on Monday, while the S&P 500 decreased by 0.35%. The heavily tech-focused Nasdaq composite lost 0.3% in morning trading.
The Nasdaq 100 tracker Invesco QQQ Trust (QQQ) and the SPDR S&P 500 ETF (SPY) both experienced losses in the first hours of trading.
Increasing to 3.5% on Monday, the 10-year Treasury yield surpassed the 11-year high of 3.48% reached on June 14. Meanwhile, as West Texas Intermediate futures traded below $82 a barrel early on Monday, U.S. oil prices fell by more than 3%.
The two-day Federal Reserve meeting will begin on Tuesday, and the interest rate decision will be made on Wednesday. The central bank will most likely increase rates by 75 basis points, according to the markets, with a 100 basis point increase showing a 20% likelihood. Investors will be watching for cues as to how quickly rates will rise in the future and how high they will ultimately rise.
Stock Market Correction
Out of the major indices, the Nasdaq Composite lost the most on Friday, although it still closed at a record high. However, it fell 0.9% for the day and 5.5% for the entire week. Now, four of the last five weeks have seen it fall.
Friday’s The Big Picture column commented, “Since getting turned away near its 200-day moving average, the Nasdaq has swan-dived below all its main moving averages. It is now down nearly 28% so far in 2022.”
Don’t ignore a stock market correction. Instead, use the relative strength line to establish watchlists to identify emerging stock market leadership. A stock’s price performance in relation to the S&P 500 is gauged by the RS line. The RS line bends upward when the stock is performing better than the overall market. The line will point lower if a stock underperforms the overall market.
This article was originally posted on investors.com