Dow Jones futures dropped 250 points Tuesday morning, as Moody’s cut the credit ratings of 10 U.S. regional banks. Meanwhile, hot AI stock Palantir Technologies (PLTR) slid on second-quarter earnings results.
Late Monday, Moody’s said it was downgrading the ratings of 10 banks, due to lower profits and higher funding costs. M&T Bank (MTB), Pinnacle Financial Partners (PNFP) and Commerce Bancshares (CBSH) were among the downgrades.
In addition, Moody’s is reviewing its ratings on six other banks. Those include Bank of New York Mellon (BK), Northern Trust (NTRS), State Street (STT) and U.S. Bancorp (USB). The SPDR S&P Regional Banking ETF (KRE) dropped 2.6% in premarket trade.
Elsewhere, China’s exports to the rest of the world tumbled in July, pointing to weak underlying demand from the West.
Early Tuesday, Datadog (DDOG), Eli Lilly (LLY), Li Auto (LI), Lucid Group (LCID), Palantir, Shockwave Medical (SWAV) and Skyworks Solutions (SWKS) were key earnings movers.
Datadog shares plunged 23% in morning trade, while Eli Lilly stock surged nearly 9%. Li Auto skidded 4.6%, as Lucid shares dipped 0.5%.
SWAV stock tumbled more than 4%, as Skyworks dropped 2% in early trade.
Finally, Palantir slid about 3% Tuesday morning after the company’s earnings results. Quarterly earnings met estimates, while sales fell short of forecasts. The company also authorized a new $1 billion share buyback plan.
Stock Market Today
Electric-vehicle giant Tesla (TSLA) traded down 2% early Tuesday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower ahead of today’s stock market open.
Other stock market leaders include Alphabet (GOOGL) and Meta Platforms (META). GOOGL stock and Meta shares both dropped 0.8% in early action.
Broadcom (AVGO), Skechers (SKX), MercadoLibre (MELI) and Interactive Brokers (IBKR) — as well as Dow Jones stocks Boeing (BA), Intel (INTC) and Salesforce (CRM) — are among the best stocks to watch as the pressured stock market rally looks to build on Monday’s bounce.
Tesla is an IBD Leaderboard stock, while Boeing and Skechers were recent IBD Stocks Of The Day. And MercadoLibre featured in this Stocks Near A Buy Zone column. Interactive Brokers is an IBD SwingTrader stock.
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Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Tuesday’s opening bell, Dow Jones futures declined 0.7% vs. fair value, while the S&P 500 lost 0.75%. The tech-heavy Nasdaq composite dropped 0.7% in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was off 0.9%, while the SPDR S&P 500 ETF (SPY) fell 0.8% early Tuesday.
Bonds perked higher, sending the 10-year U.S. Treasury yield to 3.99% Tuesday morning. The 10-year Treasury yield settled at 4.07% Monday.
West Texas Intermediate oil prices backed off from their recent highs Tuesday. WTI futures fell more than 2% to trade around $80 barrel, after touching a 10-month high above $83 on Monday.
Stock Market Action
On Monday, the Dow Jones Industrial Average rallied 1.2%, while the S&P 500 gained 0.9%. The tech-heavy Nasdaq composite finished up 0.6% after a late-day rally.
Monday’s Big Picture column commented, “One positive aspect of a weaker stock market is that more quality stocks can set up in new chart patterns. For now, however, the pool of stocks in bases is pretty dry. Support at the 10-week line and three-weeks-tight patterns provide some follow-on opportunities right now.”
Now is an important time to read IBD’s The Big Picture column as the stock market pulls back from this year’s highs.
Five Best Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks: Boeing, Intel, Salesforce
Aerospace giant Boeing broke out last week, topping a 223.91 flat-base entry. Shares briefly fell back into the 5% buy area that went up to 235.11 before Monday’s 3% rally sent them back out of the buy zone. BA stock slipped 0.9% Tuesday morning.
Chip giant Intel is holding close to a 37.19 buy point out of a cup-with-handle base, according to IBD MarketSmith pattern recognition. Shares are about 5% away from their latest entry. INTC stock moved down 1.1% Tuesday morning.
Salesforce’s recent breakout continues to struggle, with the stock below the flat base’s 225.00 entry and 50-day line, according to IBD Leaderboard analysis. CRM stock dropped 1.2% Tuesday.
4 Top Growth Stocks To Buy And Watch In The Stock Market Rally
Stocks To Watch: Broadcom, MercadoLibre, Skechers, Interactive Brokers
Chip giant Broadcom is eyeing a 921.78 buy point in a consolidation, according to IBD MarketSmith pattern recognition. Shares are just 3% away from their latest entry, as they pull back to their 50-day line. Earnings are due Aug. 31. AVGO stock traded down 1.1% Tuesday morning.
MercadoLibre surged Monday, breaking out past a cup base’s 1,365.64 buy point. Meanwhile, an early entry at 1,326.61 was also in play. MELI stock advanced 4.8% Monday in above-average volume. MELI stock lost 1.5% early Tuesday.
Skechers broke out in recent weeks when it surged above a 54.77 buy point after the company’s strong quarterly earnings results. But shares gave up their entry during last week’s losses. SKX stock is about 1% below the entry. SKX stock was down 1% Tuesday.
IBD SwingTrader stock Interactive Brokers broke out Thursday, rising 2.4% to close above a 90.19 buy point in a consolidation, but the stock is back below that buy trigger. Shares last week also topped a handle entry at 87.09. Shares fell 1.2% Tuesday morning.
Learn How To Time The Market With IBD’s ETF Market Strategy
Best Stocks In Stock Market Rally
These are four best stocks to buy and watch in today’s stock market, including a Dow Jones leader.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|UiPath||(PATH)||19.03||Cup with handle|
Source: IBD Data As Of Aug. 7, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
IBD Leaderboard stock Tesla skidded another 1% Monday, closing below its 50-day line for the first time since May 18. But shares closed sharply off their lows. A decisive rebound from here would place the electric-vehicle leader in a new buy area.
Conversely, a further weakness would mean the stock requires more time to consolidate before a new entry.
TSLA stock threatened to extend its losing streak, sliding 2% Tuesday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock sold off 1.7% Monday, extending a losing streak to five sessions and falling further below the 50-day line. While AAPL stock is still above its 157.38 buy point, Friday’s weakness was a sell signal, which means investors should lock in gains. Shares dropped another 0.3% early Tuesday.
Microsoft shares remain squarely below their 50-day line, a sign the stock needs more time to consolidate before a new buy point emerges. And on Tuesday morning, Microsoft shares were off 0.9%.
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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