U.S. equities continue to show an upward bias on Monday, with the S&P 500 holding above the 3,000 level while the Dow Jones Industrial Average remains north of the 27,000 level. Impressive gains all around as Wall Street continues to look past things like uneven economic data and an inverted yield curve to focus instead on the dovish policy pivot by the Federal Reserve and the likelihood of interest rate cuts later this year.
A number of mega-cap components in the Dow are perking up nicely and still present attractive entry points for buyers on the sidelines looking to get into the action. The early action in many of the names seems predicated on a thawing of U.S.-China trade relations later this year.
With all of that in mind, here are five Dow Jones stocks to consider:
Shares of heavy equipment maker Caterpillar (NYSE:CAT) are extending further away from its 200-day moving average to close in on the prior high set back in April. A breakout here would put an end to a long downtrend pattern going back to January 2018 and would set the stage for a challenge on the prior record high near $170, which would be worth a gain of more than 21% from here.
The company will next report results on July 24 before the bell. Analysts are looking for earnings of $3.12 per share on revenues of $14.5 billion. When the company last reported on April 24, earnings of $2.94 beat estimates by 8 cents on a 4.7% rise in revenues.
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Disney (NYSE:DIS) shares keep marching higher, pushing to new records as it exits a multi-year funk. The opening of the new Galaxy’s Edge theme park area as well as the approach of the release of the latest Star Wars movie has investors excited about ticket sales and merchandising revenue heading into the holiday shopping season.
The company will next report results on Aug. 6 after the close. Analysts are looking for earnings of $1.76 per share on revenues of $21.5 billion. When the company last reported on May 8, earnings of $1.61 per share beat estimates by 4 cents on a 2.6% rise in revenues.
Goldman Sachs (GS)
Shares of Goldman Sachs (NYSE:GS) are pushing away from a consolidation range going back to last fall with an extension away from its 200-day moving average. The stock is benefiting from expectations of easier policy from the Federal Reserve later this year, which would bolster long-term interest rates and help with net interest margins. Watch for a run at the mid-2018 highs near $240, which would be worth a gain of more than 14% from here.
The company will next report results on July 16 before the bell. Analysts are looking for earnings of $4.82 per share on revenues of $8.6 billion. When the company last reported on April 15, earnings of $5.71 beat estimates by 69 cents on a 12.6% decline in revenues.
Home Depot (HD)
Home Depot (NYSE:HD) shares are enjoying an extended rally off of their 200-day moving average, setting up a run to new record highs after breaking up and over old resistance near the $210 a share level. Falling long-term interest rates could help the housing market enjoy another surge of activity after a lack of affordability dampened activity last summer.
The company will next report results on Aug. 20 before the bell. Analysts are looking for earnings of $3.09 per share on revenues of $30.9 billion. When the company last reported on May 21, earnings of $2.27 beat estimates by 8 cents on a 5.7% rise in revenues.
Intel (NASDAQ:INTC) shares are breaking up and out of resistance from their 200-day moving average to end a two-month funk and close in on the gap down range near $55. Such a move would be worth a gain of 10% from here. Remember that semiconductors are the raw materials that the modern economy runs on, with pretty much every device containing processing power of some type these days. A turnaround in economic activity, spurred by easier money, will benefit chipmakers like Intel.
The company will next report results on July 25 after the close. Analysts are looking for earnings of 88 cents per share on revenues of $15.6 billion. When the company last reported on April 25, earnings of 89 cents per share beat estimates by 2 cents on $16 billion in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
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