The Dow Jones Industrial Average shook off losses in the first hour and is trading higher by 0.6% on Monday afternoon. The blue chip index is nearing major resistance at its 200-day moving average, according to IBD MarketSmith.
The S&P 500 reversed earlier losses and is trading higher by 0.4% with less than half-hour left in the session. The Nasdaq composite has also gained 0.4%.
The Russell 2000 dropped 0.3% earlier but has pared losses and is down 0.2% in the afternoon session.
Volume was lighter on both the Nasdaq and NYSE compared to the same time on Friday.
Dow Jones stocks Disney (DIS), Visa,ticker symb=V], Amgen (AMGN), McDonald's (MCD) and Goldman Sachs (GS) led gains.
Crude oil plunged to $88.79 per barrel after China announced slowing growth and cut two key interest rates to boost spending.
Oil stocks posted steep declines, with Diamondback Energy (FANG) falling more than 5% while Dow Jones stock Chevron (CVX) fell 2%. The SPDR S&P Oil and Gas Exploration ETF (XOP) is down by over 2.5%.
Yield on the 10-year Treasury slipped to 2.79%.
Headwinds may be building in the housing market, according to LPL Financial Chief Economist Jeffery Roach. His new commentary notes that traffic of prospective buyers fell to the lowest level since May 2020. He also warns that higher construction and borrowing costs are beginning to weigh on the housing market, with effects likely in Q3 GDP data.
Outside Dow Jones: Stocks Breaking Out Today
Cintas (CTAS) has reached a buy point of 436.75 in a double-bottom base. The stock is trading above its 50- and 200-day moving average while boasting a 95 Composite Rating, according to IBD Stock Checkup. The Commercial Services-Outsourcing Group stock has seen double-digit earnings growth, according to IBD MarketSmith.
Wholesale foods provider Performance Food Group (PFGC) has formed a cup-with-handle base and is above a buy point of 52.22. The stock ranks second in the group and has a Composite Rating of 94.
Golar LNG (GLNG) is breaking out of a cup base with a buy point of 27.62. The stock, which is trading above its 50 and 200-day lines, has a perfect Relative Strength Rating of 99. The company manufactures the machinery that converts natural gas into LNG.
Tech and Oil Stocks
Dow Jones tech stocks Apple (AAPL) and Microsoft (MSFT) posted respectable gains. Amazon (AMZN) and Google parent Alphabet (GOOGL) also rose, underpinning a 1.8% rally in the Invesco QQQ Trust (QQQ).
Also in the tech sector, Cadence Designs (CDNS) continues to hover above a buy point of 187.61. CDNS stock is extended above a cup-with-handle and buy point of 192.80. It has cleared key levels along the 10- and 40-week moving averages.
The software provider beat views in July, posting earnings of $1.08 per-share on $858 million in revenue, versus FactSet estimates for 96 cents per share on $834 million. The San Jose, California-based company has raised its full year guidance to $4.09 per share on revenue of $3.49 billion. Cadence is an IBD 50 stock.
IBD 50 stock Monolithic Power (MPWR) is trading in a cup base with a buy point of 541.49. The semiconductor and systems integration provider is ranked first in the IBD Electronic-Semiconductor Fabless Group and has a perfect Composite Rating of 99.
Tesla (TSLA) is clearing the 200-day line as investors look toward Aug. 24, when the 3-for-1 stock split goes into effect. The company split its stock 5-for-1 in 2020. Performance is frequently bullish ahead of, and after a stock split, though market conditions can impact these numbers.
Dow Jones Leader Walmart on Deck
Earnings from Dow Jones components Walmart (WMT) and Home Depot (HD) in the retail sector are on the deck for tomorrow. Target (TGT)'s numbers will be released on Wednesday.
Also due Wednesday: Lowe's (LOW), Cisco (CSCO) and Analog Devices (ADI), followed by Applied Materials (AMAT) and BJ's Wholesale (BJ) on Thursday.
Reprinted from Investor's Business Daily, the copyright all reserved by the original author.