The stock market was off session lows at midday Wednesday but still modestly lower as investors keyed on earnings reports from Netflix and other major companies. IBD 50 company Shift4 plunged, hurting that index. Nasdaq 100 stock Intuitive Surgical soared after the company blew away earnings expectations.
Shortly before noon on Wall Street, the S&P 500 and Nasdaq reduced their losses to 0.2%. The Nasdaq composite had been down about 0.6% earlier as the 12,000 mark seems to hold.
The Dow Jones Industrial Average fell 0.3%. Small caps lagged as the Russell 2000 shed 0.5%. Volume rose on the NYSE and Nasdaq compared with the same time on Tuesday.
The Innovator IBD 50 ETF underperformed with a 1.5% decline at midday.
Shift4 did some damage to the IBD 50 as the payment processing firm sold off 12%, piercing the 50-day moving average in heavy volume. FOUR stock was forming an ascending base, but now has a sell signal. Short seller Blue Orca accused the company of accounting practices that inflate its performance.
The 10-year Treasury yield rose 6 basis points to 3.63%.
Netflix, Morgan Stanley Fall On Earnings
Netflix stock fell more than 3% in heavy volume, making it one of the worst-performing S&P 500 stocks. The video streaming service missed Wall Street's Q1 target for new subscribers and its outlook was soft. Earnings fell 18% while sales climbed 4%. Despite the loss, Netflix stock continues to work on a cup-with-handle base.
Morgan Stanley trimmed its loss to about 1% after sinking as much as 3.7%. The investment bank's Q1 2023 profit fell but still beat estimates. Revenue also topped expectations but fell 2% year over year. Investment banking revenue tumbled 24% while trading revenue slid 13%.
But regional banks — an industry feared to have liquidity problems — shined in Wednesday's stock market on encouraging earnings reports. The SPDR S&P Regional Banking ETF climbed 1.3% and is finding support around 42.
Western Alliance Bancorp soared 13% in heavy trading. UBS analyst Brody Preston gave positive comments on a $2 billion increase in deposits so far this quarter, as the report calmed concerns about liquidity and capital.
It would be the stock's largest increase since Nov. 9, 2020, when it rose 23.6%, according to Dow Jones Market Data.
U.S. Bancorp reversed modestly lower, erasing a 2.5% gain, after it reported first-quarter results that topped estimates. Rising interest rates and its acquisition of MUFG Union Bank boosted the quarter for the parent company of U.S. Bank.
Synchrony Financial trimmed gains to 1% in active trading following a mixed Q1 report for the consumer financial services firm.
Dow Jones component Travelers climbed 6% after the insurance provider comfortably beat profit expectations. TRV stock regained its 200-day and 50-day moving averages.
Nasdaq 100 Stock Soars As Procedures Surge
Nasdaq 100 stock Intuitive Surgical roared higher, up 12% as shares gapped above a cup base with a 285.19 buy point. The stock is having its best day since March 24, 2020, when it jumped 17.4%.
Late Tuesday, the company beat first-quarter profit and sales expectations. Intuitive Surgical saw a resurgence in robotic surgery procedures during the quarter. Revenue jumped 14% to $1.7 billion, as adjusted earnings rose 9% to $1.23 per share.
Semiconductor equipment maker ASML beat Wall Street's targets for the first quarter but noted some caution among customers. Shares gapped down nearly 4% but remain in a cup with handle.
Tesla fell 1.5% ahead of the EV maker's earnings report after today's close.
Late Tuesday, Tesla trimmed prices in the U.S. for the second time this month. It cut Model Y prices by $3,000, to a starting price of $46,990. Model 3 prices were cut by $2,000, to $39,990. It was Tesla's sixth price cut so far this year and follows cuts in Europe, Singapore and Israel last Friday.
Tech products distributor CDW gapped down nearly 14% in big volume. The company announced Q1 revenue that missed estimates as customers pulled back on spending. It's on pace for its worst day since the height of the pandemic.
Stock Market: More Earnings After The Close
After the stock market close, Dow component IBM, chip equipment maker Lam Research and Steel Dynamics are among the notable earnings reports.
There's little on today's economic calendar, but the Fed's Beige Book survey will be released at 2 p.m. ET. Also, Chicago Fed President Austan Goolsbee and New York Fed President John Williams are scheduled to give speeches this evening, according to Econoday.
