The Dow Jones Industrial Average fell 100 points on Wednesday morning as Netflix stock jumped and dragged on better-than-expected earnings results Walt Disney (DIS), roku (ROKU) and other streaming stocks higher. Next up is Tesla post-close earnings.
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Abbott Laboratories (ABT), ASML (ASML), Baker Hughes (BKR), biogenic (BIIB) and Cal Maine Foods (CALM) were the key gainers after Tuesday’s open.
Abbott shares fell 2.7% in morning trade. ASML shares fell more than 1% after disappointing Q2 forecasts. Baker Hughes fell 9%. Biogen shares traded down nearly 2%. And Cal-Main Foods was up more than 2% in early morning trading.
Tesla (TSLA) reverted from early gains early Wednesday. Elsewhere, the technology leaders from Dow Jones Apple (AAPL) lost 0.2% and Microsoft (MSFT) was trading down 0.15% ahead of today’s market open.
In a volatile uptrend in the stock markets, the Dow Jones is leading note (MRK) and UnitedHealth (UNH) – as well money tree (DLTR), Lantheus (LNTH), Quanta Services (PWR) and Verra mobility (VRRM) – are among the stocks to keep an eye on. Keep in mind that while the market is showing increasing signs of strength, continued volatility is reason to remain cautious.
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Lantheus and UnitedHealth are IBD Leaderboard stocks. Dollar Tree is an IBD SwingTrader stock. Verra was featured in this week’s ‘Stocks Near a Buy Zone’ column and was IBD’s Stock of the Day on Monday.
Dow Jones Today: Treasury Yields, Oil Prices, Mortgage Demand
After Wednesday’s open, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq Composite rose 0.2% in morning trade.
Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.2%. And the SPDR S&P 500 ETF (SPY) fell 0.1%.
The 10-year Treasury yield fell to 2.96% on Wednesday morning, threatening to start a two-day winning streak. Meanwhile, US oil prices eased, falling about 2% in the early stages. West Texas Intermediate futures traded around $99 a barrel.
Mortgage demand last week fell more than 6% from the previous week, hitting its lowest level since 2000, according to the Mortgage Bankers Association’s seasonally adjusted index, released early Wednesday. Meanwhile, the National Association of Realtors will fall by 10: 12:00 am ET to release existing home sales for June.
Existing home sales fell to a seasonally adjusted annual rate of 5.395 million in June, compared to 5.41 million in May, according to Econoday estimates. Sales fell for four straight months through May.
stock market rally
On Tuesday, the stock market saw strong action as major stock indexes closed with big gains. The Nasdaq rose 3.1%, while the Dow Jones Industrials and S&P 500 followed with gains of 2.4% and 2.8%, respectively.
Tuesday’s The Big Picture column commented: “The big averages had one of their best rallies on Tuesday since most recent follow-up day started with a Day 5 rally of higher volume on June 24th. The Nasdaq Composite rolled 3.1% higher, climbing above its fast-falling 50-day moving average for the first time in about four months. Small caps did even better.”
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Five Dow Jones stocks to watch right now
Keeping an Eye on Dow Jones Stocks: Merck, UnitedHealth
Drug stock Merck was up slightly on Tuesday but remains well below the buy point of its flat base of 95.02, according to chart analysis by IBD MarketSmith. Merck shares were trading 0.6% lower early Wednesday.
Health insurance giant and IBD leaderboard stock UnitedHealth is range-bound above the 518.80 buy point of its double bottom with grip base, after rising 2.7% on Tuesday. Shares fell 0.6% on Wednesday.
UNH stock shows a strong 96 out of 99 perfect IBD Composite Ratings according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
4 Top Growth Stocks to Watchrightde Stock market rally
Top stocks to watch: Dollar Tree, Lantheus, Quanta, Verra
IBD SwingTrader stock Dollar Tree is gaining ground above the mug and handle buy point of 166.45 and remains in the buy range. Also on the positive side is the discounter’s RS line, which hit a new high last week. Dollar Tree stock has a strong 97 out of the best possible 99 IBD Composite Ratings, according to the IBD Stock Checkup. Dollar Tree shares were flat on Wednesday.
IBD leaderboard stock Lantheus is nearing a buy point of 73.88 as it recovers from support around its 50-day moving average. According to leaderboard commentary, Lantheus has proven to be one of the strongest stocks on the market right now, having bounced out of a double bottom in February. Lantheus shares were up 0.4% early Wednesday.
Quanta Services puts the finishing touches on a cup-and-handle basis that has a buy point of 138.56, according to chart analysis by IBD MarketSmith. Shares are about 5% off the last entry after Tuesday’s 3.3% surge. Shares rose 0.1% in morning trade.
Verra Mobility breaks past a cup with Henkel’s buy point at 16.83. Shares closed Tuesday up 3% above the buy point. The stock’s RS line continues to show tremendous strength as it made another new high on Tuesday. Verra shares gained 0.6% on Wednesday morning.
Netflix earnings
Netflix’s earnings late Tuesday beat estimates, fueling a 3% surge in morning trade. The company made $3.20 per share in the second quarter on revenue of $7.97 billion. Wall Street had forecast Netflix earnings of $2.95 per share on revenue of $8.03 billion. Year over year, Netflix’s revenue grew 8% while revenue rose 9%.
The company lost 970,000 subscribers in the June quarter. Three months ago, Netflix predicted that it would lose 2 million subscribers in the second quarter due to price hikes and increased competition.
Netflix stock closed more than 70% below its 52-week high on Tuesday.
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Tesla stock
Tesla shares rose 2.1% on Tuesday, extending a winning streak to five sessions, but shares are still about 40% off that record high. The stock shed early gains and fell 0.2% on Wednesday.
The EV giant’s earnings will be released after the market close on Wednesday. Analysts expect the company’s earnings to rise 28% to $1.86 per share on sales of $16.5 billion.
Tesla delivered 254,695 vehicles in the second quarter, roughly in line with Wall Street’s lowered estimates. FactSet analysts expect shipments to ramp up in the second half of 2022, with chip supply slowly increasing. Wall Street sees Tesla reaching 1.4 million units by the end of the year.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rebounded 2.7% on Tuesday, rebounding 2.1% from Monday’s sell-off. Apple is above its 50-day moving average after bullish action in recent weeks. Shares remain well below their 200-day long-term moving average and are about 17% off their 52-week high. Apple earnings are due July 28th. The stock was down 0.2% on Wednesday morning.
Microsoft was up 2.1% on Tuesday and retested resistance around its 50-day moving average. The stock closed about 26% below its 52-week high. The software giant is set to release quarterly results on July 26. Microsoft shares fell 0.15% early Wednesday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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