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Shares jumped into early gains on Wednesday as markets moved to extend Tuesday’s bullish rebound. Chipotle Mexican Grill, ASML Holdings and Travelzoo topped the names rallying on earnings news, while Netflix slipped after its report. On the Dow Jones today, Boeing and Coca-Cola are leading as more than 20% of the index has increased by more than 2%.
X
The Dow Jones Industrial Average climbed 0.8%, up more than 250 points, with Coke (KO) at the front at the start of the trade. The S&P 500 rose 0.6%, confirming Tuesday’s rebound from the 50-day support.
The Nasdaq Composite strengthened to an increase of 0.4%, partly slowed down by Apple (AAPL), which sagged under the uncertain impact of flooding in China. ASML Holdings (ASML) and Nvidia (NVDA), the two lists in the IBD ranking were at the top of the Nasdaq 100.
Nvidia rallied after Oppenheimer adjusted its price target to 235, after the stock split 4-1 on Tuesday. The new price target is 23% higher than where the shares traded early Wednesday. Nvidia is in a buy zone after a 10 week support rebound.
Mexican Grill Chipotle (CMG) ran on the S&P 500, up more than 8% after releasing results on Tuesday night. Halliburton (HAL) rose 3.8% after its earnings report, and as Goldman Sachs improved the action to buy, from neutral.
Vaccine manufacturer and IBD 50 stock Modern (MRNA) fell 3.1%, entering its first day as an S&P 500 listing.
Netflix (NFLX) fell 4.2% after its second quarter report on Tuesday night exceeded views on subscriber growth, but missed the mark on profits.
Beyond earnings, NeutroMetrix (NURO) rose 88% in open trade. The stock jumped 210% on Monday, after the Food and Drug Administration granted the company’s Quell Device “breakthrough designation” status for the treatment of fibromyalgia in adults.
Dow Jones Today: Coke, Verizon and J&J Results
Boeing (BA) and Coca-Cola set the tone for the Dow Jones today, up 2.8% and 2.3%, respectively. Apple stock fell 0.7%, likely affected by concerns over flooding in central China. CNBC reported that subcontractor Foxconn, Apple’s largest supplier, claimed that its massive Zhengzhou assembly plant had not yet been affected by the flooding. The city of 10 million inhabitants is said to have experienced intense flooding.
Coke stock rose 2% after posting a strong sales and profit pace, and raising its full-year profit forecast above analysts’ opinions. The pre-market gain suggested a breakout of the starting bell beyond a buy point of 56.58 in a five-week flat base.
J&J reversed its pre-market gains on the Dow Jones today and fell 0.3%, despite the ease of erasing second-quarter expectations and raising annual profits and revenue expectations above analysts’ opinions. The action ended on Tuesday just below an entry of 171.28 on a nine-week basis in a cup-with-grip.
Global Stock Markets
The action was mixed in global markets on Wednesday. Hong Kong’s Hang Seng Index closed 0.1% lower, extending its decline to three days as widespread flooding displaced around 200,000 people in central China. In Japan, Tokyo’s Nikkei 225 climbed 0.6%, ending a five-session drop just as the Summer Olympics are about to begin.
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Shares rose in Europe. In afternoon trading, London’s FTSE 100 climbed 1.6%. The CAC-40 in Paris rose 1.4%. The Frankfurt DAX traded up 1%.
Vital signs: bond yields, oil prices, Bitcoin
Bonds eased, pushing yields higher after a sharp reversal on Tuesday. The 10-year rate climbed to 1.26% on Wednesday morning, after stabilizing just below 1.21% on Tuesday. On Tuesday, yields briefly fell to their lowest level since February 2 and are now below the support of their 200-day moving average.
The last time the 10-year yield fell below the 200-day support line was in December 2018. It started a nine-month drop that ended just before the Covid-19 pandemic .
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Oil prices rebounded on Wednesday, with the US benchmark West Texas Intermediate up 1.6% to $ 68.27 per barrel. WTI reversed from Tuesday’s initial losses, following Monday’s 7.5% drop – the worst single-day drop since September. Prices began to fall after the Organization of the Petroleum Exporting Countries and its Russia-led partners, commonly referred to as OPEC +, agreed on a strategy on Sunday to bring production back to pre-pandemic levels. by 2022.
Monday’s loss left oil prices heading for a third consecutive weekly decline, on the heels of a six-week rally. Prices on July 6 hit $ 76.98, their highest level since October 2014.
Bitcoin rose 6% to top $ 31,500, after plunging to $ 29,327 on Tuesday. The cryptocurrency had traded above $ 36,000 in late June and hit a record high of nearly $ 65,000 in April.
Profit News: ASML, ISRG, Chipotle
In addition to the three blue chips reporting profits on the Dow Jones today, Travel zoo (TZOO), Lithia & Driveway (BOY), Harley davidson (PORK), Interpublic Group (IPG) and Qualtrics International (XM) all increased after their intercourse.
ASML Holdings rose 2.7% to peak on the Nasdaq 100. The Netherlands-based chipmaker reported mixed results in the second quarter, but raised its revenue guidance for the third quarter . The title is technically in a buy zone following a rebound in support. But IBD Leaderboard warns that “investors should not think about buying unless the stock recovers the buy point (705.90)”.
Intuitive Surgical reversed its pre-market advance and fell 3%, despite announcing triple-digit profit growth and double-digit sales growth for its second quarter. The shares are extended from a breakout in late June from a base pattern on base.
Chipotle rose 8.8% after easily beating analysts’ second quarter profit targets. The gain sent stocks past a buy range above a buy point of 1,579.62 in what IBD MarketSmith analysis presents as an 11 week cut base. Chipotle first dominated the entry on July 7, then pulled out for a test of support at its 21-day exponential moving average.
After closing, Texas instruments (TXN), Discover Financial (DFS), Whirlpool (WHR) and MasterCard (TM) are among the companies that must report.
Nasdaq, S&P 500, Dow Jones today
Tuesday’s results revealed a strong history of support across the Big Three benchmarks. The Nasdaq resumed support at its 21-day exponential moving average. The S&P 500 rebounded gracefully after testing support at its 50-day line. And Dow industrials regained 50-day support, ending the session tied with the index’s 21-day line.
As a result, ETFs that track the Dow Jones are now back near buy points. The Dow Jones Industrial Average ETF Trust (DIA) SPDR is 1% lower than its entry of 348.75. ProShares Ultra Industrials (UXI) leverage is 3% below its buy point at 34.07.
Additionally, the SPDR S&P 500 ETF Trust (SPY) is in a buy zone after rebounding from its 50 day / 10 week moving average.
Small caps have skipped the history of support. But the Russell 2000 and the S&P Smallcap 600 both posted big gains for the day, rallying 3% and 2.9% respectively. Either way, that ended the five-day declines. But both indices remain well below recent highs and have some repair work to do.
Market Status: Uptrend Under Pressure
Tuesday’s gains were a bullish follow-up to Monday’s decline, with silver coming back across a wide range of sectors. However, a look at IBD’s Market Pulse shows that the stock market’s status remains “Bullish trend under pressure”.
This leaves the door open for major stock purchases exceeding buy points. But he also warns investors that the market remains volatile, with a number of indicators suggesting possible further consolidation.
For a more detailed analysis of the current stock market and its state, study the big picture.
With the earnings season underway, there are bound to be the usual quarterly successes and failures. HCA Health (HCA) and AutoNation (AN) are among this week’s winners.
Now is a good time to study the profit season pyramid and option trading. These offer different approaches to limiting exposure when shopping during earnings season.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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