The Dow Jones Industrial Average fell 100 points Wednesday morning, as Netflix stock jumped on better-than-expected earnings results, pulling Walt Disney, Roku and other streaming stocks higher. Up next, Tesla earnings are due out after the close.
Abbott Laboratories, ASML, Baker Hughes, Biogen and Cal-Maine Foods were key earnings movers after Tuesday's open.
Abbott stock dropped 2.7% in morning trade. ASML shares shed more than 1% after disappointing Q2 guidance. Baker Hughes dived 9%. Biogen shares traded down nearly 2%. And Cal-Main Foods rallied more than 2% in early morning trade.
Tesla reversed from early gains Wednesday. Elsewhere, Dow Jones tech leaders Apple lost 0.2% and Microsoft traded down 0.15% before today's stock market open.
In a volatile stock market uptrend, Dow Jones leaders Merck and UnitedHealth — as well as Dollar Tree, Lantheus, Quanta Services and Verra Mobility — are among the stocks to watch. Keep in mind that, while the market has flashed rising signs of strength, ongoing volatility is a reason to stay 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 moved down 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, the Nasdaq 100 tracker Invesco QQQ Trust moved up 0.2%. And the SPDR S&P 500 ETF fell 0.1%.
The 10-year Treasury yield ticked lower to 2.96% Wednesday morning, threatening to snap a two-day win streak. Meanwhile, U.S. oil prices retreated, falling around 2% in early action. West Texas Intermediate futures traded around $99 per barrel.
Mortgage demand fell more than 6% last week vs. 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 existing home sales figures at 10 a.m. ET.
Per Econoday estimates, sales of existing homes fell to a seasonally adjusted annual rate of 5.395 million in June vs. 5.41 million in the month of May. Sales declined for four straight months through May.
Stock Market Rally
On Tuesday, the stock market posted strong action, as the major stock indexes finished with big gains. The Nasdaq jumped 3.1%, while the Dow Jones industrials and S&P 500 followed up with advances of 2.4% and 2.8%, respectively.
Tuesday's The Big Picture column commented, "Since the latest follow-through day took hold with a Day 5 rally in higher turnover on June 24, the major averages enjoyed one of their best rallies on Tuesday. The Nasdaq composite rolled 3.1% higher and lifted above its fast-declining 50-day moving average for the first time in roughly four months. Small caps performed even better."
If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Merck, UnitedHealth
Drug stock Merck inched higher Tuesday, but remains sharply below its flat base's 95.02 buy point, according to IBD MarketSmith chart analysis. Merck shares traded down 0.6% early Wednesday.
Health insurance giant and IBD Leaderboard stock UnitedHealth is in buy range above its double-bottom-with-handle base's 518.80 buy point after Tuesday's 2.7% climb. Shares fell 0.6% Wednesday.
UNH stock shows a strong 96 out of a perfect 99 IBD Composite Rating, per 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 Watch In The Current Stock Market Rally
Top Stocks To Watch: Dollar Tree, Lantheus, Quanta, Verra
IBD SwingTrader stock Dollar Tree is gaining ground above its cup-with-handle's 166.45 buy point and remains in buy range. Another positive note is the discount retailer's RS line, which hit a new high last week. Dollar Tree stock shows a strong 97 out of a best-possible 99 IBD Composite Rating, per the IBD Stock Checkup. Dollar Tree shares were flat Wednesday.
IBD Leaderboard stock Lantheus is approaching a 73.88 buy point, as it rebounds from support around its 50-day line. Per Leaderboard commentary, Lantheus has proved itself one of the strongest stocks in the market currently after soaring out of a double-bottom base in February. Lantheus shares were up 0.4% early Wednesday.
Quanta Services is putting the finishing touches on a cup-with-handle base that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Shares are about 5% away from the latest entry after Tuesday's 3.3% rise. Shares traded up 0.1% in morning trade.
Verra Mobility is breaking out past a cup-with-handle's 16.83 buy point. Shares closed above the buy point Tuesday amid a 3% advance. The stock's RS line continues to show tremendous strength as it hit a another new high Tuesday. Verra shares gained 0.6% Wednesday morning.
Netflix Earnings
Netflix earnings topped estimates late Tuesday, fueling a 3% jump in morning trade. The company earned $3.20 a share on sales of $7.97 billion in the second quarter. Wall Street had modeled Netflix earnings of $2.95 a share on sales of $8.03 billion. On a year-over-year basis, Netflix earnings rose 8% while 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 following price hikes and amid heightened competition.
Netflix stock closed Tuesday more than 70% off its 52-week high.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock rallied 2.1% Tuesday, extending a win streak to five sessions, but shares are still about 40% off that record high. The stock erased early gains, falling 0.2% Wednesday.
The EV giant's earnings are due out Wednesday after the stock market closes. Analysts expect the company's earnings to rise 28% to $1.86 per share on revenues of $16.5 billion.
Tesla delivered 254,695 vehicles in Q2, roughly in line with lowered Wall Street estimates. FactSet analysts expect deliveries to ramp up in the second half of 2022, with chip supply slowly increasing. Wall Street sees Tesla notching 1.4 million units by the end of the year.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rebounded 2.7% Tuesday, bouncing back from Monday's 2.1% sell-off. Apple is above its 50-day line after bullish action in recent weeks. Shares remain far below their long-term 200-day line and are about 17% off their 52-week high. Apple earnings are due out July 28. The stock traded down 0.2% Wednesday morning.
Microsoft rose 2.1% Tuesday, again testing resistance around its 50-day line. The stock closed about 26% off its 52-week high. The software giant will report quarterly results on July 26. Microsoft shares fell 0.15% early Wednesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
