Major market indexes were off session lows at midday Wednesday as Q1 earnings grind through their busiest reporting week. A weak outlook from a major shipping company added to the transportation sector's woes.
The tech-heavy Nasdaq composite led with a 1.4% gain at midday, bouncing off its 50-day moving average. The S&P 500 was up 0.4% while the Russell 2000 rose 0.1%.
The Dow Jones Industrial Average inched up just 0.1% despite a boost from Boeing. The aerospace giant rallied nearly 3%, climbing above the 50-day moving average after beating first-quarter expectations. Executives said a 737 Max production problem will not alter its full-year financial outlook.
Volume rose on the Nasdaq and the NYSE compared with the same time on Tuesday.
The Innovator IBD 50 ETF was up 0.6% despite some component weakness.
Enphase Energy hurt the IBD 50 the most with a 24% rout. The company warned its sales growth may slow because of weak U.S. demand. The company's current-quarter revenue forecast lagged expectations.
Enphase traded close to a one-year low in huge volume. Other solar stocks fell in sympathy. SolarEdge slid more than 8%. Sunrun fell nearly 7%. Array Technologies fell more than 5%. Solar industry superstar First Solar tumbled 4% ahead of Thursday's Q1 report.
Solar energy is today's worst-performing IBD industry group, down 11.7% according to MarketSmith.
Q1 Earnings Spark Stock Moves
Microsoft jumped 8.5% and is now extended from its 276.86 buy point. After Tuesday's close, the company beat March-quarter estimates on a strong performance by its Azure cloud computing businesses. Microsoft also guided higher for the current quarter.
Mr. Softee held firm after some bad news Wednesday morning, when U.K. regulators rejected its acquisition of Activision Blizzard due to antitrust concerns. Activision shares sold off 9% in soaring volume.
Alphabet rose a more moderate 0.7% after erasing earlier losses. The parent of Google also topped first-quarter earnings and revenue expectations. But it plans to raise capital spending this year as it ramps up investments in artificial intelligence.
While Alphabet's gain was modest, it still kept the Nasdaq afloat because the megacap comprises more than 10% of the index. Alphabet is also more than 3% of the S&P 500. Microsoft's weighting in the Nasdaq is nearly 9%.
More Big Wednesday Earnings Moves
Early Wednesday, Visa reported earnings rose nearly 20% for its March quarter. The stock also reversed lower, down 0.1% and below a 234.40 entry.
In health care, Boston Scientific reversed lower, and is back in the buy zone from a 48.97 buy point. The maker of cardiovascular and other types of devices beat profit and sales views. Humana climbed back above its 50-day and 200-day moving averages. Earlier today, the Medicare specialist beat profit views and raised full-year guidance.
Chipotle Mexican Grill rallied more than 13%, extending CMG stock well above its 1,724.81 buy point. The fast-casual chain beat Q1 earnings and sales estimates as lower avocado prices helped results. Chipotle also set out strategic plans, including a pause on price hikes.
Old Dominion Freight Line gapped down 9%, undercutting a cup base it had formed. The trucker blamed a decline in first-quarter sales on a slowing U.S. economy.
It is the latest transportation component to give a weak forecast. Other trucking and logistics companies and UPS have been cool on their outlooks. This forward-looking group can forecast economic upturns and downturns with great accuracy.
Other shipping stocks down sharply today are Saia, TFI International, ArcBest and Landstar.
Q1 Earnings Parade Continues
More Q1 earnings are due after the close, headlined by Facebook parent Meta Platforms. The stock is extended from its most recent entry at 197.26.
ServiceNow, KLA and Meritage Homes are other key reports for today.
In economic news, durable goods orders climbed 3.2% in March, well above economist forecasts for a 0.9% increase. Excluding transportation orders, the 0.3% increase beat estimates for a 0.2% decline.
Priscilla Thiagamoorthy, Senior Economist at BMO Capital Markets, said stronger bookings for Boeing boosted transport orders.
"Economic growth in the first quarter has proved to be remarkably resilient," she added. "Net exports were firmer, while the control measure of core shipments jumped more than expected in March."
