The Dow Jones Industrial Average dropped more than 100 points Wednesday morning, as Netflix (NFLX) sold off on weak subscriber growth. Meanwhile, Tesla (TSLA) earnings are due out after the close as the Elon Musk-led electric-vehicle giant again cut prices for some of its Model Y and Model 3 EVs in the U.S.
Streaming giant Netflix missed Wall Street’s target for new subscribers in the first quarter and offered a weak outlook in its late-Tuesday report. Netflix stock initially plummeted on the news, but later rebounded in extended trading. Shares were off 3% Wednesday morning.
Other key earnings movers Wednesday morning include ASML Holding (ASML), Morgan Stanley (MS), Interactive Brokers (IBKR), Intuitive Surgical (ISRG), United Airlines (UAL), Dow Jones stock Travelers (TRV) and regional bank Western Alliance (WAL).
ASML stock dropped 3% in morning trade, as concerns over sketchy demand signals outweighed the company’s first-quarter revenue and earnings beat. Morgan Stanley shares gave up 2.7%. Interactive Brokers sold off 3% early, but Intuitive Surgical reported a massive resurgence in robotic surgery procedures during the March quarter, and ISRG stock surged 11%.
United Airlines climbed 2% in morning trade, as Travelers jumped 6%. Finally, Western Alliance soared 20% after the company’s better-than-expected first-quarter earnings results.
Stock Market Today
EV giant Tesla skidded more than 3% in early trade ahead of its first-quarter earnings report, due after Wednesday’s close. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after today’s stock market open.
Crocs (CROX), Floor & Decor (FND), IBD Leaderboard watchlist stock Lululemon Athletica (LULU) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones stocks Cisco Systems (CSCO), JPMorgan Chase (JPM), Nike (NKE) and Visa (V) — are among the top stocks to buy and watch with the ongoing market rally.
JPMorgan and Lululemon were featured in this week’s Stocks Near A Buy Zone column.
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Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average declined 0.2%, as sellers pressured Intel (INTC) following the ASML report. The S&P 500 lost 0.5%. The tech-heavy Nasdaq composite dropped 0.7% in morning trade, with CDW (CDW) down 10% at the bottom of the index.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 0.8%, while the SPDR S&P 500 ETF (SPY) traded down 0.3% early Wednesday.
The 10-year U.S. Treasury yield on Wednesday traded up to 3.61%, continuing its recent rally. Last week, the 10-year yield rebounded from its lowest level since mid-September.
U.S. oil prices continued to retreat from their April 12 high above $83 a barrel. West Texas Intermediate futures dropped almost 2%, to just above $79 a barrel early Wednesday. The Energy Information Administration’s weekly oil inventories report is due at 10:30 a.m. ET.
Stock Market Rally
On Tuesday, the Dow Jones Industrial Average edged lower, with Boeing (BA) and Home Depot (HD) the biggest winners. Boeing shares rallied 1.6%, while HD stock climbed 1.2%. The S&P 500 rose 0.1%, and the tech-heavy Nasdaq composite closed down less than 0.1%.
Tuesday’s Big Picture column commented, “An invested percentage of 40% to 60% still makes sense, but if you’re getting good feedback from new buys, exposure could be raised a little more. Always keep positions small to start. Look to increase them if new buys make progress from your entries.”
Now is an important time to read IBD’s The Big Picture column with the stock market in an uptrend.
Five Best Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks To Buy And Watch: Cisco Systems, JPMorgan, Nike, Visa
Cisco Systems remains squarely below a flat base’s 51.84 buy point after a 0.1% gain Tuesday. But there is no sell signal yet, according to IBD MarketSmith pattern recognition. CSCO stock topped the entry on March 31. Shares lost 3% Wednesday. Cisco reports fiscal third-quarter results on May 17.
JPMorgan shares rose 1.1% Tuesday, moving closer to a flat base’s 144.44 buy point in the wake of Friday’s earnings-fueled surge. JPM stock dipped 0.1% early Wednesday.
Nike shares edged higher Tuesday, still above their 50-day line. The stock is just above a 126.16 early entry and nearing a 131.41 flat-base buy point. NKE stock moved down 0.4% in early trade.
Visa shares remain in buy range above a 230.15 cup-with-handle buy point. The buy range goes up to 241.66. V stock lost 0.2% in early morning trade. Visa reports fiscal second-quarter results on April 25.
4 Top Growth Stocks To Watch In The Stock Market Rally
Best Stocks To Buy And Watch: Crocs, Floor & Decor, Lululemon, Vertex
Crocs shares rallied 3.4% Tuesday, breaking out past a cup base’s 143.60 buy point, according to IBD MarketSmith. The 5% buy range goes up to 150.78. CROX stock moved up 0.5% early Wednesday. The company plans to report first-quarter earnings on April 27.
Backstory: Broomfield, Colo.-based Crocs is best known for its rubbery, casual-wear shoes. The company in recent years expanded its Crocs brand portfolio from the classic slip-on clogs to include boots, sandals, wedges and sneakers. The Crocs brand makes up around 75% of sales. The company’s Heydude brand of suede, leather and canvas comfort shoes comprise 25% of revenue.
Floor & Decor decisively broke out past a cup-with-handle’s 99.47 buy point, with a 2.5% rise Tuesday. FND shares lost 1.7% early Wednesday. Floor & Decor’s first-quarter earnings are due May 4.
Backstory: Floor & Decor operates 191 warehouse-format stores and six design studios across 36 states. It sells tile, wood, laminate, vinyl, and natural stone flooring products. It also sells decorative accessories. Earnings are seen slipping 2% this year before rising to 27% in 2024 and 24% in 2025.
IBD Leaderboard watchlist stock Lululemon closed Tuesday just above a 371.36 buy point in a cup with handle. Shares fell 0.1% Wednesday morning.
Backstory: On March 28, Lululemon hiked 2023 guidance after topping earnings and revenue estimates for the holiday fourth quarter, sparking a 12.7% surge on March 29. The yogawear and athleisure apparel retailer’s final fourth-quarter results also exceeded its own preliminary announcement, issued in early January.
Vertex Pharmaceuticals gave up a cup base’s 325.29 buy point during Tuesday’s 0.8% drop. VRTX stock gained 0.6% Wednesday.
Backstory: Vertex Pharmaceuticals researches and develops medical treatments for cystic fibrosis, sickle cell disease, muscular dystrophy, kidney disease and type 1 diabetes.
Learn How To Time The Market With IBD’s ETF Market Strategy
Best Stocks To Buy And Watch In Stock Market Rally
These are four best stocks to buy and watch in today’s stock market, including three Dow Jones leaders.
|Company Name||Symbol||Correct Buy Point||Type Of Buy Point|
|Visa||(V)||230.15||Cup with handle|
|Cisco Systems||(CSCO)||51.84||Flat base|
Source: IBD Data As Of April 19, 2023
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Tesla Stock Skids Ahead Of Earnings
Tesla stock slipped 1.5% Tuesday, giving back Monday’s gains. In recent weeks, shares triggered the 7%-8% loss rule from a buy point at 200.76 in a cup with handle. And they fell sharply below their 50-day line, a key level.
Now, the stock is seeing some resistance at that area, in a holding pattern ahead of its first-quarter earnings report late Wednesday. A decisive retake would be bullish for the stock’s immediate prospects. The stock closed Tuesday 50% off its 52-week high.
Late Tuesday, Tesla cut prices in the U.S. for the second time this month. Tesla Model Y prices were cut by $3,000, and the vehicle now starts at $46,990. Meanwhile, Tesla Model 3 prices were cut by $2,000, and that car now goes for $39,990.
This is Tesla’s sixth price reduction in 2023 and follows cuts in Europe, Singapore and Israel on Friday. There are rumors that Tesla will cut prices again in China, after major reductions in late October and early January.
TSLA stock skidded 3.3% Wednesday morning, threatening to add to Tuesday’s losses.
Late Wednesday, Wall Street expects first-quarter earnings of 85 cents per share, a nearly 20% drop compared to last year. Wall Street forecasts revenue growing 26% to $23.73 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares climbed 0.75% Tuesday. They closed out of the 5% buy range beyond a 157.48 buy point. AAPL stock dropped 0.4% Wednesday. Apple reports its fiscal second-quarter results on May 4.
Microsoft shares are at the top of the buy range past a flat base’s 276.86 buy point, with a 0.15% drop Tuesday. The 5% buy area goes up from the buy point to 290.70. And on Wednesday, MSFT stock lost 0.6%. The company plans to report its fiscal second-quarter results on April 25.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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