The Dow Jones Industrial Average dropped early Wednesday, despite a powerful early advance from Netflix following strong quarterly earnings results. Airline stocks and chip equipment makers also rallied on earnings news. Next up, Tesla earnings are due out after the close.
Stock Market Today: Earnings Season Continues
The rollout of third-quarter earnings continued, with results from ASML, Baker Hughes, Intuitive Surgical United Airlines, along with Dow Jones stocks Procter & Gamble and Travelers.
Tesla will report after the market close. Shares traded down 0.5% Wednesday morning.
ASML shares jumped more than 4%, while Baker Hughes climbed 7%. Intuitive Surgical reported better-than-expected third-quarter earnings and sales results, as the stock leapt 11% after the market open. United Airlines topped third-quarter earnings and revenue views, sending shares up around 5%.
Among Dow Jones earnings, P&G stock rallied 2.7% and Travelers rose 1.1%. Dow Jones stock IBM is due to report after the close. Elsewhere, tech titans Apple and Microsoft were squarely lower after today's stock market open.
AutoZone, Cardinal Health, Molina Healthcare and Vertex Pharmaceuticals — as well as Dow Jones stocks Chevron and Merck — are among the top stocks to watch. Keep in mind that the ongoing stock market rally attempt is the perfect time for investors to build and perfect their watchlists of top growth stocks.
Cardinal Health and Vertex are IBD Leaderboard stocks. Merck and Molina Healthcare were featured in this week's Stocks Near A Buy Zone column, along with two other top stock ideas. AutoZone was the IBD Stock Of The Day on Thursday. Cardinal Health was Friday's Stock Of The Day.
Dow Jones Today: Treasury Yields, Oil Prices
After Wednesday's opening bell, the Dow Jones Industrial Average fell 0.2%, while the S&P 500 lost 0.6%. The tech-heavy Nasdaq composite dropped 0.8% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust was down 0.7%, and the SPDR S&P 500 ETF fell 0.5%.
The 10-year Treasury yield ticked higher to 4.1% Wednesday morning, jumping back above 4% and hitting a new 52-week high.
U.S. oil prices rebounded more than 1% Wednesday, looking to end a string of losses. West Texas Intermediate futures held just above $84 a barrel. Last week, WTI futures topped $93 a barrel.
Stock Market Rally Attempt Continues
On Tuesday, the Dow Jones Industrial Average and S&P 500 both climbed 1.1%. The Nasdaq trailed with a 0.9% rise, after paring back an early jump of 2.8%.
Tuesday's The Big Picture commented, "When the S&P 500 and Nasdaq showed gains north of 2% in the morning, the session had the feel of a follow-through day taking shape on the fourth day of the rally attempt. But the S&P 500's gain of 1.1% didn't qualify. That's fine, because you still have to look far and wide for actionable setups among leading stocks."
Psychologically, watching the market work through repeated rally attempts can be a challenging process. Investors want to keep watchlists handy, in order to jump on follow-through day breakouts. But not all follow-throughs work, so buying too soon or with too much conviction can lead to frustration.
This is why it's important to raise exposure slowly and methodically, as the uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Chevron, Merck
Energy giant Chevron continues to hold above support at its 50-day line and is consolidating below a 182.50 buy point ahead of the company's Oct. 28 earnings release. An early entry at 166.93 is also in play. Chevron shares reversed early losses and added 0.8%.
CVX stock boasts a strong 98 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.
Dow Jones member and IBD 50 stock Merck is in buy range past a double bottom's 93.12 buy point, according to IBD MarketSmith pattern recognition. Keep in mind the ongoing market correction should keep you on the sidelines. The stock's relative strength line hit a new high last week. Third-quarter earnings results are due Oct. 27 before the opening bell.
Merck shares dipped 0.2% Wednesday morning.
4 Top Growth Stocks To Watch In The Current Stock Market Correction
Top Stocks To Watch: AutoZone, Cardinal, Molina, Vertex
Auto parts leader and recent IBD Stock Of The Day AutoZone is about 2% away from a cup base's 2,362.34 buy point. Keep an eye out for a potential handle to offer a lower entry. AutoZone shares were up 0.3% early Wednesday.
IBD Leaderboard stock and medical leader Cardinal Health is shaping a cup-with-handle base that has a 71.22 buy point, according to IBD MarketSmith chart analysis. Cardinal stock is just 1% away from the newest entry. Earnings are due Nov. 4. Shares slipped 0.1% Wednesday.
Molina Healthcare finished Tuesday less than 1% under a flat base's 361.35 buy point. The stock's RS line hit a new high last week, confirming the health care stock as a leader to watch. Molina's earnings are expected out on Oct. 26. MOH stock was up 0.1% early Wednesday.
Biotech leader Vertex Pharmaceuticals is approaching a flat base's 306.05 buy point and an early entry at 296.90. Its RS line made a new high in recent sessions, a sign of big stock market outperformance. Earnings are due Oct. 27. Shares lost 0.3% Wednesday morning.
Netflix Earnings
Netflix earnings handily beat estimates late Tuesday and smashed Wall Street's targets for new subscribers in the third quarter.
The streaming giant added 2.4 million subscribers in the September quarter. Three months ago, Netflix said it expected to add 1 million subscribers in the period. Wall Street analysts were looking for 1.08 million new members. Netflix ended the third quarter with 223.1 million total subscribers worldwide.
Netflix stock surged 10% after Wednesday's open, opening above a double bottom's 250.49 buy point. The stock closed Tuesday about 66% off its 52-week high.
Tesla Earnings
Tesla stock cut gains to just 0.4% Tuesday, but still rose for second straight session. Last week, shares closed at their lowest level since June 2021. Despite a two-day win streak, shares remain about 47% off their 52-week high. Tesla stock traded down 0.5% Wednesday.
The EV giant's third-quarter results are due after the market closes. Tesla is expected to earn an adjusted $1.01 per share on sales of $22.1 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 0.9% Tuesday after the company rounded out its lineup of holiday products with new iPads and an upgraded Apple TV streaming video box.
Still, shares are about 21% off their 52-week high and below their 50- and 200-day lines. AAPL stock lost 0.5% Wednesday morning.
Microsoft rose 0.4% Tuesday, continuing its rebound from last week's 52-week low price. The software giant is about 32% off its 52-week high. Shares moved down 0.6% Wednesday morning.
Apple earnings are expected on Oct. 27, while Microsoft's are due Oct. 25.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
