Yesterday, the Down Jones Industrial Average suffered its largest-ever point decline at 1,175. With Monday’s bloodbath leading to erratic trading on Tuesday, investors have had to contend with their first major bout of volatility in years.
The chaos started on Friday after a surprisingly strong payroll report and rising long-term yields fueled inflation concerns. Moreover, it marked the end of the tenure of Federal Reserve chairman Janet Yellen, which ruffled a few feathers.
However, while the Dow Jones is now down 0.31% and headwinds remain, the market is due for a short-term rebound here to at least work off the worst of the panic. What lies beyond depends on how the Fed under new leadership navigates a situation where the economy seems to be moving into an overheating scenario.
For those looking to bargain hunt down here, here are five Dow Jones stocks to buy that have been among the worst hit and look best positioned for a relief rally:
Dow Jones Stocks to Buy: Apple (AAPL)
Apple Inc. (NASDAQ:AAPL) shares have fallen to test their 200-day moving average, down more than 11% from their mid-January highs as broad market weakness has combined with specific concerns about iPhone X demand and the company’s ability to generate the revenue growth everyone is used to as the smartphone market becomes saturated. But for long-term holders, this represents the first significant pullback since the summer of 2016.
The company will next report results on May 3, after the close. Analysts are looking for earnings of $2.72-per-share on revenues of $61.3 billion. When the company last reported on Feb. 1, earnings of $3.89-per-share beat estimates by 4 cents on a 12.7% rise in revenues. But iPhone sales missed estimates in a big way.
Dow Jones Stocks to Buy: General Electric (GE)
General Electric Company (NYSE:GE) shares have been a fallout zone, down more than a third from their 200-day moving average and in the midst of a persistent downtrend as former CEO Jeff Immelt left and the leadership vacuum in his place has brought to light a number of strategic missteps for the company. Shares have lost nearly half their value from the early 2017 high. But with the new CEO doubling down on business spinoffs to focus on areas of growth, the bad news looks largely priced in.
The company will next report results on April 25, before the bell. Analysts are looking for earnings of 12-cents-per-share on revenues of $27.9 billion. When the company last reported on Jan. 24, earnings of 27-cents-per-share missed estimates by 1 cent on a 5.1% decline in revenues.
Dow Jones Stocks to Buy: Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) shares have moved below their 200-day moving average, down 12% from their mid-January high to return to levels last seen in early October. Shares have been a perennial relative performer but have been broadsided by sector-level selling against healthcare related names after Amazon.com, Inc. (NASDAQ:AMZN), JPMorgan Chase & Co. (NYSE:JPM) and Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) announced a partnership to lower healthcare costs for employees — driving fear that deflation is coming to an area of the economy where prices only seem to be accelerating to the upside.
But with shares falling to strong technical support from the June-October trading range, watch for a relief rebound here. The company will next report results on April 24, before the bell. Analysts are looking for earnings of $2.00-per-share on revenues of $19.3 billion.
Dow Jones Stocks to Buy: Procter & Gamble (PG)
Procter & Gamble Co (NYSE:PG) shares are getting hit hard after bonking on double-top resistance from its September and January highs. The decline represents a 10%+ decline from the September high and returns the stock to levels that haven’t been seen since early 2017. But with job gains continuing, and wages no on the rise, consumer goods stocks like PG should see a lift on increased spending.
The company will next report results on April 26, before the bell. Analysts are looking for earnings of $1.01-per-share on revenues of $16.3 billion. When the company last reported on Jan. 23, earnings of $1.19 beat estimates by 5 cents on a 3.2% rise in revenues.
Dow Jones Stocks to Buy: Chevron (CVX)
Chevron Corporation (NYSE:CVX) shares are suffering a reversal here, settling into their October-November trading range for a loss of nearly 13% from their early January high. Shares rallied strongly out of the late October low on a surge in crude oil prices — driven in large part by the weakness in the U.S. dollar — but that’s being reversed now amid broad market pressure.
Watch for the dynamic to reappear in the weeks to come as the U.S. economy heats up and inflationary pressure builds. The company will next report results on May 4, before the bell. Analysts are looking for earnings of $1.48-per-share on revenues of $41.8 billion.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
