The main stock indexes were mixed Wednesday afternoon as Netflix plummeted more than 35% on a gloomy outlook, but a few stocks topped buy points.
Indexes climbed off session lows. The Nasdaq composite was down 0.7% as major techs such as Meta Platforms slid 7% and Alphabet fell 1%.
The S&P 500 rose 0.4% in uneven trading. Small caps outperformed as the Russell 2000 climbed 0.9%.
The Dow Jones Industrial Average rose 1% as several of its components gapped up. IBM gapped up to a 7.5% gain after the company beat sales and profit estimates late Tuesday.
Procter & Gamble rose 2.5% after the household and personal care products giant beat March-quarter expectations. P&G also raised its sales forecast for the fiscal year ending in June. P&G stock broke out of a cup-with-handle base, rising above a buy point of 161.31, and is in a buy zone to 169.38.
Volume rose on the NYSE and Nasdaq compared with the same time on Tuesday.
Netflix Subscriber Losses Spark Rout
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35243.34 | +332.14 | +0.95 |
| S&P 500 | (0S&P5) | 4475.68 | +13.47 | +0.30 |
| Nasdaq | (0NDQC ) | 13526.49 | -93.17 | -0.68 |
| Russell 2000 | 203.41 | +1.85 | +0.92 | |
| IBD 50 | 36.66 | +0.05 | +0.14 | |
Last Update: 1:34 PM ET 4/20/2022 |
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Netflix stock plunged 35% to the lowest point since January 2018. It is on pace for its worst day since Oct. 15, 2004, when it fell nearly 41%, according to Dow Jones Market Data.
Volume was heavy after the company late Tuesday stunned Wall Street with a loss of 200,000 subscribers in the first quarter. And it warned that it expects to lose 2 million subscribers in the current quarter.
Netflix was once one of the five largest stocks in the Nasdaq and one of the four stocks that made up the FANG acronym. But since peaking in November, the stock had lost more than half its value even before today's rout. As of Tuesday's close, Netflix did not even make the top 20 Nasdaq components, accounting for just 0.6% of the composite. In the S&P 500, Netflix is in the top 55, with a 0.4% weighting in the index.
In the semiconductor sector, ASML rose more than 4% after the chip-equipment company beat first-quarter sales expectations and met profit estimates. But it forecast sales below estimates for the current quarter. The stock climbed back above its 50-day moving average but remains well below prior highs.
After today's close, Tesla will announce first-quarter earnings. Analysts expect earnings to more than double to $2.26 a share, according to FactSet. Sales are estimated to climb 69% to $17.595 billion. Tesla shares fell 3.2% at midday and are forming a cup-with-handle base with a 1,152.97 entry. The report comes as CEO Elon Musk makes a hostile buyout bid for Twitter.
Breakouts, IBD 50 Index
Life Storage rose above the 148.40 buy point of a cup with handle, but volume was light. The relative strength line is at new highs, a positive sign. The self-storage company will report Q1 results May 4.
Edwards Lifesciences broke out of a cup with handle in heavy trading. After clearing a 125.21 buy point, it's in a buy range to 131.47. The stock was added to IBD Leaderboard Tuesday. DT Midstream, a new issue in the fuel pipeline and storage industry, is above the 58.15 buy point of a flat base. But volume is well below average.
Earthstone Energy rose past the 15.37 buy point of an undefined base in active trading. The oil and gas exploration company's EPS jumped 31%, 30%, 483% and 411% the past four quarters on strong revenue growth.
The Innovator IBD 50 ETF fell 0.6%. Among its movers, Rexford Industrial Realty followed through on Tuesday's breakout from a 78.44 buy point, rising another 3.4% Wednesday, and remains in buy range to 82.36. The industrial property owner reported earnings Tuesday.
But MP Materials fell nearly 6% and is now below the 50-day moving average. It already had given a sell signal by erasing a gain of more than 25% from its 47.40 buy point.
In afternoon trading, the price of U.S. crude oil rose 0.5% to $103.11 a barrel. The yield on the 10-year Treasury note eased 7 basis points to 2.84%.
Most S&P sectors rose at midday, but Communications Services Select Sector SPDR was off nearly 4%. Netflix is a top 10 holding in the fund. The consumer staples, health care, finance, real estate, transportation, utilities and industrial sectors rose more than 1% each.
Existing Home Sales Fall In March
Existing home sales fell 2.7% in March from the previous month, to 5.77 million units. Economists had forecast 5.86 million. The March sales fell 4.5% from the year-ago period.
March's decline took home sales to the lowest since June 2020, said BMO Capital Markets economist Priscilla Thiagamoorthy. The median sales price climbed 15% year over year to an all-time high of $375,300 as the number of homes available for sale fell 9.5%. "At the current pace, it would take two months to sell all the homes on the market, underscoring tight market conditions," she added.
With low supply and high prices already hurting potential home buyers, sharply rising mortgage rates will also impact affordability, Thiagamoorthy said. "Looking ahead, the housing market is expected to cool as rates continue to rise, likely at a faster pace, while elevated prices continue to erode affordability."
