Stocks slide as Tesla tumbles on slower second-quarter deliveries

The Dow Jones Industrial Average plunged 600 points Tuesday morning, signaling a weak start to the holiday-shortened week. Tesla stock slipped after the company reported weaker-than-expected second-quarter shipments.


Netherlands-based chip equipment manufacturer ASML Company (ASML) fell sharply as chip stocks continued to falter in the wake of Micron Technology‘s (MU) weak quarterly report on Friday.

You’re here (TSLA) was trading down 3% early Tuesday. Meanwhile, Chinese electric vehicle giant BYD (BYDDF) saw strong sales in June, but the stock still fell 2%. Elsewhere, technology leaders from Dow Jones Apple (AAPL) and Microsoft (MSFT) were both down sharply after today’s stock market open.

In a volatile stock market environment, the leaders of the Dow Jones Johnson & Johnson (JNJ), Merck (MRK) and UnitedHealth (UNH), as well as Auto area (AZO), Bristol Myers Squibb (BMY), Eli Lily (LLY) and Quantum Services (PWR), are among the stocks to watch. Keep in mind that continued stock market volatility is a reason to stay defensive.

UnitedHealth is an IBD ranking stock. Bristol was IBD Stock Of The Day on June 22. AutoZone was listed in the Stocks Near A Buy Zone column last week.

Dow Jones Today: Treasury Yields, Oil Prices

After Tuesday’s open, the Dow Jones Industrial Average lost 1.9%, while the S&P 500 fell 1.95%. The tech-heavy Nasdaq composite fell 1.6%. Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.4%. The SPDR S&P 500 ETF (SPY) lost 1.6% in early trading.

The 10-year Treasury yield fell to 2.81% on Tuesday after last week’s fall to 2.88% which saw the 10-year Treasury yield close below 3% for the first time since the 7 June. In mid-June, it reached its highest level since April 2011, at 3.48%.

Meanwhile, US oil prices fell more than 4%, with the West Texas Intermediate trading around $103.50 a barrel. In early March, WTI briefly rose above $130.

Stock market volatility

The stock market posted strong action on Friday, as major equity indices posted moderate gains. The Nasdaq rose 0.9% on Friday, slightly behind gains of nearly 1.1% by the Dow Jones Industrial Average and S&P 500.

Friday’s The Big Picture column commented, “After posting one of the worst first-half performances in decades, the stock market is off to a strong start in the second half of 2022.”

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Investors can also create watchlists, find companies close to a buy point, or develop custom screens at IBD MarketSmith.

Four Dow Jones stocks to watch now

Dow Jones stocks to watch: Johnson & Johnson, Merck

Dow Jones leader Johnson & Johnson is about 1% below the 181.84 buy point of a double-bottom basis after Friday’s 1.1% gain, according to chart analysis. ‘IBD MarketSmith. JNJ shares were down 0.3% on Tuesday morning.

The JNJ stock is posting a 94 out of a perfect IBD composite rating of 99, according to the IBD stock balance sheet. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.

Pharmaceutical giant Merck rebounded on Friday, but remains around 2% below the 95.02 buy point of its flat base. Early Tuesday, the stock was up 0.5%.

Healthcare giant and IBD Leaderboard UnitedHealth stock are in the buy range past the 507.36 double-bottom buy point. Shares were down almost 2% on Tuesday morning.

4 growth stocks to watch in the currentrStock market rally

Top stocks to watch: AutoZone, Bristol, Eli Lilly, Quanta

AutoZone shares rose above the 2,130.60 buy point of their cup with a handle on Friday amid a 0.5% rise. Shares fell 1% on Tuesday.

Bristol Myers ended about 2% below the 78.72 buy point on a flat basis after Friday’s 0.2% loss. Stocks are now trying to find support around their key 50-day line. Bristol Myers shares fell 0.6% on Tuesday.

Eli Lilly rose 0.15% on Friday, extending a winning streak to three sessions. The shares are in the 5% buy zone which rises to 329.81. Eli Lilly stock fell 0.4% early Tuesday.

Quanta Services draws a messy cup with a handle that has a buy point of 138.56, according to chart analysis from IBD MarketSmith. Last week, stocks found strong support around their 50-day line, which is a key level to watch. Quanta shares were down more than 2% on Tuesday morning.

Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live

Tesla Stock

Tesla stock rose 1.2% on Friday, ending a four-day losing streak. Shares threatened to give up those gains on Tuesday morning, falling 3%.

Over the weekend, Tesla said it delivered 254,695 vehicles in the second quarter, below estimates of 264,000. Covid lockdowns and restrictions significantly reduced production at the Shanghai plant for much of the trimester. Chief executive Elon Musk also cited supply chain issues for limiting production elsewhere.

The stock is well below its 50 and 200 day moving averages. Tesla stock traded as high as 1,243.49 on November 4. The shares are about 45% off that record.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rebounded 1.6% on Friday and are well below their long-term 200-day line. The stock is about 24% off its 52-week high. Apple shares fell 1.3% on Tuesday morning.

Software leader Microsoft climbed 1.1% on Friday as it appears to be bouncing back after finding strong resistance around its key 50-day line last week. The stock closed around 26% off its 52-week high. Microsoft shares were down 1.7% early Tuesday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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