Dow Jones rose modestly Wednesday, along with the S&P 500 index and Nasdaq, after Microsoft lifted the major indexes to 52-week highs Tuesday. Meanwhile, Carvana and ASML headlined earnings reports before the open.
Carvana surged early Wednesday on strong results, guidance and a debt-restructuring deal. ASML missed views but raised its outlook. The Dutch chip-equipment giant fell solidly, moving below a buy point.
Halliburton reported mixed results while fellow oil services giant Baker Hughes slightly beat. Superregional bank U.S. Bancorp narrowly exceeded forecasts, while Dow giant Goldman Sachs missed on earnings.
HAL stock fell slightly and Baker Hughes edged higher. U.S. Bancorp and GS stock climbed modestly.
All eyes will turn to Tesla and Netflix earnings after the close. Both are releasing second-quarter results.
Tesla stock rose slightly early Wednesday, with Cathie Wood's Ark Invest continuing to trim its holdings Tuesday. NFLX stock edged higher.
ASML and TSLA stock are on IBD Leaderboard. Microsoft stock is on IBD Long-Term Leaders. ASML stock is on the IBD 50.
Dow Jones Today
The Dow Jones rose 0.5%. The S&P 500 advanced 0.4%, with the Nasdaq up 0.4%.
Big telecom issues, led by Verizon and AT&T were rebounding sharply after a three-week sell-off tied to lead sheathing used in telecom cables.
Among tech titans, Apple, Meta Platforms, Google parent Alphabet and MSFT stock were little changed.
Crude oil futures rose more than 1%. Meanwhile, the 10-year Treasury yield dipped 1 basis point to 3.78%.
U.S. housing starts fell 8% in June to an annual rate of 1.434 million units from May's downwardly revised 1.559 million. Economists expected 1.48 million. Building permits also came in lower than expected.
Overnight, the U.K. inflation rate fell to a still-hot 7.9% in June from May's 8.7%. Analysts had expected a milder drop to 8.2%. Core inflation unexpectedly cooled slightly to 6.9% from May's 31-year high of 7.1%.
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Stock Market Rally Tuesday
The Dow Jones Industrial Average jumped 1.1% in Tuesday's stock market trading, hitting a 52-week high. The S&P 500 index climbed 0.7% and the Nasdaq composite 0.8%.
Crude oil prices rose 2.2% to $75.75 a barrel. The 10-year Treasury yield ticked down 1 basis point to 3.79%.
ASML Earnings
ASML earnings leapt 48% while revenue rose 35%, both beating analyst views. The Dutch maker of high-end chip equipment also guided higher on third-quarter sales and raised its 2023 revenue target.
ASML stock lost 4% Wednesday, dropping below a buy point. Shares edged up 0.3% on Tuesday to 757.03, slightly above a 747.13 buy point from a flat base, base-on-base pattern.
ASML stock is a notable holding in the VanEck Vectors Semiconductor ETF.
Carvana Earnings
Carvana reported second-quarter revenue fell 23.5% to $2.97 billion, but comfortably beat views. Gross per unit spiked 94% to $6,520.
The used-car dealer, which late Tuesday moved up results from Aug. 3, said it expects to achieve positive earnings before interest, taxes, depreciation and amortization, or EBITDA, in the third quarter. Carvana also announced a deal to cut debt by $1.2 billion.
CVNA stock surged more than 30% in volatile trade.
Carvana stock has skyrocketed 740% in 2023 through July 18. It remains heavily shorted.
Tesla Earnings
Tesla stock rose nearly 2% Wednesday.
Shares climbed 4.25% from Monday through Tuesday as the electric-vehicle giant touted its first Cybertruck, made in Austin, Texas.
Tesla stock has a 313.80 buy point from a very deep cup base, but a meaningful handle or pause would come in handy.
Tesla earnings are expected to rise 4% vs. a year earlier to 80 cents a share. Revenue should jump 43% to $24.22 billion, Tesla's Shanghai plant was shut down for several weeks in the second quarter of 2022 due to Covid lockdowns.
Ongoing price cuts and incentives pushed deliveries to a new record in the second quarter. But that likely pressured gross margins further. Tesla's gross profit margin was 19.3% in first quarter, down from 23.8% in the fourth quarter and 29.1% in the first quarter of 2022.
Investors will be interested when the Cybertruck ramps up production and deliveries, as well as when an upgraded Model 3 hits the streets.
TSLA stock remains the No. 1 holding across Cathie Wood's Ark Invest ETFs. But Ark Invest has been paring its stake in recent days and weeks. It sold $8.4 million worth of Tesla stock on Tuesday after unloading $13.1 million on Monday.
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Netflix Earnings
NFLX stock climbed 1% Wednesday. Netflix subscribers likely grew by 1.8 million in the second quarter, after the streamer ended the first quarter with 232.5 million paying customers worldwide. Analysts expect Netflix earnings to fall 12% vs. a year earlier, with revenue up 4% to $8.27 billion.
Netflix stock popped 5.5% on Tuesday to 474.80, its highest level since January 2022. Shares decisively cleared a messy, short-term consolidation.
Dow Jones Leaders: Apple, Microsoft
Apple stock dipped 0.4% early Wednesday. The iPhone giant edged down 0.1% to 193.73 on Tuesday. That's just below AAPL stock's June 30 all-time high of 194.48.
Microsoft stock edged up 0.3% Wednesday. Shares jumped 4% on Tuesday 359.49, clearing a four-week consolidation to a fresh record high. On Tuesday, the Dow tech titan announced pricing for artificial intelligence tools.
Microsoft 365 Copilot will cost $30 a month for enterprise customers, on top of their existing subscriptions. Microsoft also will use Meta's new AI large language model, Llama 2, via its Azure cloud-computing service.
On Wednesday, Microsoft and Activision agreed to extend their deal deadline to Oct. 18, providing a little more space to clear final regulatory hurdles.
Microsoft earnings for its fiscal third quarter are set for July 25. Apple's fiscal second-quarter results come on Aug. 3.
Internet Giants Google, Meta
Google stock climbed 0.3% early Wednesday. Shares edged down 0.7% to 123.76. GOOGL stock is working on a 129.04 buy point from a short base, but could be working on a handle. On July 13, Google stock gapped above its 50-day line, also breaking a trendline. That offered an early entry.
The internet search giant is restricting some employees' access to the Internet to limit cybersecurity risks, CNBC reported Tuesday night.
Meta stock edged up 0.7%. Shares rose 0.5% on Tuesday to 312.05. The social media giant hit a 52-week high of 316.24 last week. Meta stock is on track for its ninth-straight monthly gain in a near-vertical advance.
Google earnings are due July 25, with Meta on tap July 26.
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