The Dow Jones Industrial Average fell 100 points on Wednesday morning as Netflix stock rebounded on better-than-expected earnings results. Walt Disney (DIS), Roku (ROKU) and other streaming stocks rose. Next, Tesla’s earnings are due to be released after the close.
Abbot Laboratories (ABT), ASML (ASML), Baker Hughes (BKR), Biogen (BIIB) and Kal-Man Foods (CALM) were the key gain drivers after Tuesday’s open.
Abbott shares fell 2.7% in morning trading. ASML shares fell more than 1% after disappointing second-quarter guidance. Baker Hughes fell 9%. Biogen shares fell almost 2%. Shares of Cal-Main Foods rose more than 2% in morning trading.
Tesla (TSLA) reversed after an early rise on Wednesday. Elsewhere technology leaders Dow Jones Apple (AAPL) lost 0.2% and Microsoft (MSFT) were down 0.15% ahead of today’s stock market open.
In a volatile stock market uptrend, Dow Jones leaders Merck (MRK) and UnitedHealth (UNH) – and also dollar tree (DLTR), Lantheus (LNT), Quanta Services (PWR) and Verra Mobility (VRRM) – stocks worth watching. Keep in mind that while there are signs of growth in the market, the continued volatility is cause for caution.
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Lantheus and UnitedHealth are on the IBD leaderboard. Dollar Tree is IBD SwingTrader stock. Werra was featured in the “Stocks Near the Buy Zone” column this week and was named 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 was down 0.3% and the S&P 500 shed 0.15%. The Nasdaq technology composite rose 0.2% in morning trading.
Among exchange-traded funds, the 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 snap a two-day winning streak. Meanwhile, US oil prices retreated, falling about 2% in early trading. Futures for West Texas Intermediate oil are trading around $99 per barrel.
Demand for mortgages fell more than 6% last week 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 release June home sales data at 10:00 AM ET.
Econoday estimates that seasonally adjusted existing home sales fell to 5.395 million year-on-year in June from 5.41 million in May. Sales declined for four consecutive months until May.
stock market rally
On Tuesday, the stock market showed an active dynamics, as the main stock indexes ended the session with a big increase. The Nasdaq jumped 3.1%, while the Dow Jones Industrial Average and S&P 500 climbed 2.4% and 2.8%, respectively.
The Big Picture column published on Tuesday said: “As the last follow-up day was bolstered by a higher turnover Day 5 rally on June 24, the major averages experienced one of their best rallies on Tuesday. The Nasdaq Composite Index rose 3.1% and rose. above its rapidly falling 50-day moving average for the first time in about four months. Small caps fared even better.”
If you’re new to IBD, consider taking a look at its stock trading system and the basics of CAN SLIM. Recognizing chart patterns is one of the keys to investment guidance. IBD offers a wide range of growth stock listings such as Leaderboard and SwingTrader.
Investors can also create watchlists, find companies close to the point of purchase or design their own screens in IBD MarketSmith.
Five Dow Jones stocks to watch now
Dow Jones stocks to watch: Merck, UnitedHealth
Shares of Merck rose a few inches on Tuesday but remain well below the buy base point of 95.02, according to IBD MarketSmith’s chart analysis. Merck shares fell 0.6% early Wednesday.
Shares of health insurance giant and IBD Leaderboard UnitedHealth are in a buying range above the buy point of their double-bottom base at 518.80 after rising 2.7% on Tuesday. Shares fell 0.6% on Wednesday.
Shares of UNH post a strong 96 out of a perfect 99 IBD Composite Rating according to the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical performance.
The 4 Best Growth Stocks to Watch in the Current SituationRstock market rally
Top stocks to watch: Dollar Tree, Lantheus, Quanta, Verra
IBD SwingTrader Dollar Tree shares gain strength above their 166.45 handle cup buy point and remain in a buying range. Another positive is the discount retailer’s RS lineup, which hit a new high last week. Dollar Tree stock posted a strong 97th out of a maximum of 99 combined IBD ratings, according to an IBD stock review. Dollar Tree shares were unchanged on Wednesday.
Shares of IBD Leaderboard Lantheus are approaching the 73.88 buy point as they rebound from support around their 50-day line. According to Leaderboard commentary, Lantheus has proven to be one of the strongest stocks on the market today after bouncing off a double bottom in February. Lantheus shares rose 0.4% early Wednesday.
According to IBD MarketSmith chart analysis, Quanta Services is putting the finishing touches on the cup and handle base, which has a buy point of 138.56. Shares are about 5% off their last record after rising 3.3% on Tuesday. Shares rose 0.1% in morning trading.
Verra Mobility breaks through the 16.83 handle cup buy point. Shares closed above their buy point on Tuesday on a 3% gain. The stock RS line continues to show tremendous strength as it made another new high on Tuesday. Verra shares added 0.6% on Wednesday morning.
Income from Netflix
Netflix’s earnings topped estimates late Tuesday evening, prompting a 3 percent jump in morning trading. The company earned $3.20 per share on sales of $7.97 billion in the second quarter. Wall Street modeled Netflix’s earnings of $2.95 per share on sales of $8.03 billion. On an annualized basis, Netflix’s earnings grew 8% and sales grew 9%.
The company lost 970,000 subscribers in the June quarter. Three months ago, Netflix predicted it would lose 2 million subscribers in the second quarter due to higher prices and more competition.
Shares of Netflix closed on Tuesday more than 70% below their 52-week high.
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Tesla shares rose 2.1% on Tuesday, extending the winning streak to five sessions, but the stock is still about 40% below that all-time high. Shares wiped out early gains, falling 0.2% on Wednesday.
The electric car giant’s earnings are due on Wednesday after the stock market closes. Analysts expect earnings to rise 28% to $1.86 per share on revenue of $16.5 billion.
Tesla delivered 254,695 vehicles in the second quarter, roughly in line with Wall Street’s undervalued estimates. FactSet analysts expect shipments to pick up in the second half of 2022, with chip shipments slowly increasing. Wall Street predicts that Tesla will produce 1.4 million units by the end of the year.
Dow Jones leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 2.7% on Tuesday after falling 2.1% on Monday. Apple is above its 50-day line after being bullish in recent weeks. The stock remains well below its long-term 200-day line and about 17% below its 52-week high. Apple’s earnings are due on July 28th. Shares fell 0.2% on Wednesday morning.
Shares of Microsoft rose 2.1% on Tuesday, once again testing resistance around the 50-day line. The stock closed about 26% below its 52-week high. The software giant will publish quarterly results on July 26. Microsoft shares fell 0.15% early Wednesday.
Don’t forget to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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