Dow Jones futures dropped more than 400 points Friday morning, as FedEx plunged on a profit warning. Meanwhile, the 10-year Treasury yield is just shy of hitting June’s 11-year high.
FedEx (FDX) plummeted more than 20% in morning trade after the company warned for its fiscal first quarter and withdrew its full-year guidance. The shipping giant also announced cost-cutting measures, including the closing of 90 office locations. UPS (UPS) also tumbled in early morning trade.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.,” Fed Ex Chief Executive Raj Subramaniam said in a news release. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts.”
Elsewhere, electric-vehicle leader Tesla (TSLA) traded down 1% Friday. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) were both sharply lower ahead of today’s stock market open.
In the market’s current volatility, Arista Networks (ANET), DoubleVerify (DV), Palo Alto Networks (PANW) and Pure Storage (PSTG) — as well as Dow Jones stock Chevron (CVX) — are among the top stocks to buy and watch. Keep in mind the market’s increased volatility is a good reason for investors to be more defensive, especially after this week’s sharp losses.
DoubleVerify is an IBD Leaderboard stock. Chevron and Palo Alto were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Treasury Yields, Oil Prices
Ahead of Friday’s opening bell, Dow Jones futures were down 1.4% vs. fair value, while S&P 500 futures gave up 1.45%. Nasdaq 100 futures lost 1.45% in morning action. Remember that overnight activity in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
The 10-year Treasury yield ticked lower to 3.45% Friday. On Thursday, the 10-year Treasury yield notched its highest closing level since June 14 and is just shy of the 11-year high of 3.48% set on June 14.
U.S. oil prices rose more than 1% early Friday, as West Texas Intermediate futures traded near $86 a barrel.
Stock Market Rally Under Pressure
On Thursday, the Dow Jones Industrial Average dropped 0.6% to hit a fresh recent low, making its lowest close since July 14. The S&P 500 closed 1.1% lower. The Nasdaq composite declined 1.4%. The Nasdaq and S&P 500 held a fraction above their Sept. 6 lows.
Thursday’s The Big Picture column commented, “If the market is able to stabilize around its recent lows and stage a serious rebound, then investors should have a list of top stocks that are trying to rise despite the market’s downward pressure. Identifying proper buy points and potential follow-on opportunities, like three-weeks-tight formations and 50-day rebounds is a good start.”
The best way to find emerging stock market leadership is by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, the RS line angles upward. If a stock lags the broad market, the line will point lower.
The RS line is plotted on all IBD and MarketSmith charts. In addition, the IBD Stock Screener includes a list of top-rated stocks with relative strength lines at new highs. MarketSmith also has the “RS Blue Line Dot” list, which screens for RS lines at new highs. (IBD MarketSmith provides free access for a full week.)
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.
Dow Jones Stocks To Watch: Chevron
Dow Jones stock Chevron fell 1.6% Thursday, ending about 4% away from a cup with handle’s latest buy point at 166.93 — according to IBD MarketSmith chart analysis — amid a strong performance by energy stocks so far this year. The stock was flat early Friday.
CVX stock shows a strong 97 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.
Top Stocks To Watch: Arista, DoubleVerify, Palo Alto Networks, Pure Storage
Arista Networks has added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith chart analysis. An early entry at 126.80 is also in play. Arista’s relative strength line is close to highs, even as the stock gave up its 200-day line Thursday. ANET shares were slightly lower early Friday.
IBD Leaderboard stock DoubleVerify is holding above a 28.07 buy point in a bottoming base. Shares are in the 5% buy zone that goes up to 29.47. DV shares were flat Friday morning.
Cybersecurity leader Palo Alto Networks is nearing a 193.01 buy point in a cup with handle despite Thursday’s 1.3% fall. An early entry around 187 exists due to a trendline, according to IBD Leaderboard commentary. Shares fell around 1% Friday.
Pure Storage is building a 31.62 buy point in a cup with handle. Meanwhile, an early entry is also in play after the stock moved above a downtrend line within that handle. Shares were inactive Friday.
Tesla stock rose 0.4% Thursday, adding to Wednesday’s 3.6% gain. Shares are moving further above their 200-day line, which they had just given up. The electric-vehicle giant dropped 1% Friday morning.
Tesla arguably has a short base, within a much-larger consolidation, that has a 314.74 buy point. Bullishly, the stock’s RS line is at its highest level since April. Shares are about 27% of their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares dropped 1.9% Thursday, falling further below its 50-day line. Apple stock dropped 1% Friday.
Microsoft lost 2.7% Thursday, closing at its lowest level since June 16. The software giant is sharply below its 50-day and 200-day lines. Shares are about 30% off their 52-week high. Microsoft shares declined 0.9% Friday morning, just above its June lows.
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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