The Dow Jones Industrial Average rose on Wednesday ahead of the Federal Reserve’s interest rate decision. Tech Giants Alphabet (GOOGL) and Microsoft (MSFT) announced weaker-than-expected earnings results on Tuesday evening. Meanwhile, revenue from Facebook-parent Metaplatforms (META) must exit after the close.
Google-parent alphabet reported June quarter earnings and revenue that fell short of Wall Street targets as YouTube and its cloud computing business fell short of expectations. Shares rebounded more than 3%. Meanwhile, the software leader Microsoft missed analysts’ expectations for its fourth fiscal quarter, blaming unfavorable exchange rates and weak PC sales. Microsoft stock rose 5%.
Other key earnings drivers on Wednesday morning included Chipotle Mexican Grill (GCM), Enphase Energy (ENPH), Shopify (STORE), Spotify (PLACE) and Texas Instruments (TXN). Dow Jones stocks were also on the move Boeing (BA) and Visa (V).
Chipotle jumped 11%. Enphase easily beats second-quarter estimates and guided higher for the current quarter, as stocks jumped nearly 9%. Shopify grew by 4%. Spotify gained 12%. And Texas Instruments crushed Wall Street targets for the second quarter and guided higher for the current period as stocks rose nearly 5%.
In the volatile stock market environment, the Dow Jones stock UnitedHealth (A H) – as good as elf beauty (ELF), Quantum Services (REP), Ultimate beauty (ULTA), Mobility will see (VRRM) and Vertex Pharmaceuticals (VRTX) – are among the stocks to watch. Keep in mind that continued equity market volatility is a reason to remain more cautious despite recent signs of strength.
Dow Jones Today: Treasury Yields, Oil Prices, Fed Decision
After Wednesday’s open, the Dow Jones Industrial Average was up 0.4% and the S&P 500 was up 1.1%. The Nasdaq advanced 2.15%.
The 10-year Treasury yield rose to 2.81% on Wednesday morning, rebounding from Tuesday’s decline. On Tuesday, the 10-year Treasury yield hit its lowest level since April. Meanwhile, US oil prices rebounded, with West Texas Intermediate futures rising nearly 1% to trade near $96 a barrel.
The Two-day Fed meeting ends Wednesday with a policy decision at 2 p.m. ET, followed by a press conference with Fed Chairman Jerome Powell at 2:30 p.m. Wall Street anticipates that the central bank will aggressively raise interest rates until the end of the year – then turn around and start cutting them in six months. Another rate hike of 75 basis points is expected.
Stock market rally
The Nasdaq led the market lower on Tuesday, selling 1.9%. The Dow Jones Industrials and S&P 500 fell 0.7% and 1.15% respectively.
Tuesday’s The Big Picture column commented: “The selloff was most concentrated in the Nasdaq composite, which fell 1.9%. But the magnitude wasn’t too bad with falling stocks beating the advances by about 3 to 2. The ratio was about the same on the NYSE, with losers beating the winners by less than 2 to 1. Volume increased on the Nasdaq, giving the index a day of distribution.
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Dow Jones earnings: Boeing, Visa
Aircraft maker Boeing rose 3% on Wednesday morning despite missing second-quarter profit and sales targets. Boeing still sees positive free cash flow forecast for the full year.
Visa, financial leader of the Dow Jones beat third-quarter earnings and revenue estimates. Earnings rose 33% year over year to $1.98 per share. Sales increased 19% to $7.3 billion. FactSet analysts had expected earnings of $1.75 per share on sales of $7.076 billion. Visa shares slid less than 1% in morning trading.
Dow Jones stocks to watch: UnitedHealth
Health insurance giant and IBD classification UnitedHealth stock is still above the 518.80 buy point of its double-bottom base with a handle after Tuesday’s 0.4% gain, according to IBD MarketSmith graphical analysis. Shares rose 0.6% on Wednesday.
UNH stock shows a solid 95 over a perfect 99 IBD Composite Assessment, speak IBD inventory check. Investors can use the IBD Composite Rating to easily assess the quality of a stock’s fundamental and technical metrics.
Top stocks to watch: ELF, Quanta, Ulta, Verra, Vertex
ELF Beauty is around 3% below a buy point of 33.54 in a mug with handle following a recent skid. The RS line reached a new high last week, a sign of a major stock market outperformance. ELF shares rose slightly on Wednesday.
Quanta Services is putting the finishing touches on a mug base with handle that has a buy point of 138.56, according to IBD MarketSmith graphical analysis. Meanwhile, an early entry at 133.68 is also in play. The shares traded up 0.2% on Wednesday.
IBD Big Cap Stock 20 Ulta Beauty is building a flat base with a buy point of 429.58, but is below its 50-day line after Tuesday’s 4.1% drop. The base comes on the heels of a failed break after June’s entry of 426.93 from a cup with a handle. Ulta shares rose nearly 1% on Wednesday.
Verra Mobility is trading around 5% below the 16.83 cup-with-handle buy point following Tuesday’s 4.3% decline. Stocks RS line continues to show tremendous strength as it hit a new high last week. Verra shares rose 1% on Wednesday.
IBD classification Vertex Pharmaceuticals stock found support around the 279.23 buy point of a cup with handle amid a two-day winning streak, according to IBD MarketSmith graphical analysis. The biotech leader sits in the 5% buy zone rising to 293.19 amid Tuesday’s 1.6% rise. Vertex stock was down 2% on Wednesday.
Tesla stock slipped 3.6% on Tuesday, falling for a second straight session and returning some of last week’s earnings-fueled 13.4% rise. Shares briefly hit their highest level since early May, but are still around 38% off their 52-week high.
Shares rebounded around 2% on Wednesday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones Stocks, Apple shares fell 0.9% on Tuesday, extending a losing streak to three sessions. Apple remains above its 50-day line after bullish action in recent weeks. Still, stocks remain below their long-term 200-day line, which looms as a resistance level to watch. The stock is about 17% off its 52-week high. Apple shares rose 0.7% on Wednesday.
Microsoft sold 2.7% on Tuesday, falling further below its 50-day line. The stock closed around 28% off its 52-week high. Microsoft rose 5% on Wednesday after the company’s earnings and guidance.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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