The Dow Jones Industrial Average rose Wednesday ahead of the Federal Reserve’s interest-rate decision. Tech giants Alphabet (GOOGL) and Microsoft (MSFT) reported weaker-than-expected earnings results late Tuesday. Meanwhile, earnings for Facebook-parent Meta Platforms (META) are due out after the close.
Google-parent Alphabet reported June-quarter earnings and revenue that missed Wall Street targets as YouTube and its cloud computing business fell short of expectations. Shares rallied more than 3%. Meanwhile, software leader Microsoft missed analyst expectations for its fiscal fourth quarter, blaming unfavorable foreign exchange rates and weak PC sales. Microsoft stock rose 5%.
Other key earnings movers Wednesday morning include Chipotle Mexican Grill (CMG), Enphase Energy (ENPH), Shopify (SHOP), Spotify (SPOT) and Texas Instruments (TXN). Also on the move were Dow Jones stocks Boeing (BA) and Visa (V).
Chipotle jumped 11%. Enphase easily beat second-quarter estimates and guided higher for the current quarter, as shares surged almost 9%. Shopify rose 4%. Spotify gained 12%. And Texas Instruments crushed Wall Street’s targets for the second quarter and guided higher for the current period, as shares rose almost 5%.
In the volatile stock market environment, Dow Jones stock UnitedHealth (UNH) — as well as ELF Beauty (ELF), Quanta Services (PWR), Ulta Beauty (ULTA), Verra Mobility (VRRM) and Vertex Pharmaceuticals (VRTX) — are among the stocks to watch. Keep in mind that ongoing stock market volatility is a reason to stay more conservative despite recent signs of strength.
Dow Jones Today: Treasury Yields, Oil Prices, Fed Decision
After Wednesday’s open, the Dow Jones Industrial Average rose 0.4%, and the S&P 500 rallied 1.1%. The Nasdaq advanced 2.15%.
The 10-year Treasury yield ticked higher to 2.81% Wednesday morning, bouncing back from Tuesday’s drop. On Tuesday, the 10-year Treasury yield hit its lowest level since April. Meanwhile, U.S. oil prices rebounded, as West Texas Intermediate futures rose almost 1% to trade near $96 a a barrel.
The Fed’s two-day meeting concludes Wednesday with a policy decision at 2 p.m. ET, followed by a press conference with Fed Chair Jerome Powell at 2:30 p.m. Wall Street anticipates that the central bank will raise interest rates aggressively through the end of the year — and then turn around and start cutting them in six months. Another 75-basis-point rate hike is expected.
Stock Market Rally
The Nasdaq led the market lower Tuesday, selling off 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 selling was most concentrated in the Nasdaq composite, which dropped 1.9%. But breadth wasn’t too bad with declining stocks beating advancers by about 3 to 2. The ratio was about the same on the NYSE, with losers beating winners by less than 2 to 1. Volume rose on the Nasdaq, giving the index a distribution day.”
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Dow Jones Earnings: Boeing, Visa
Airplane maker Boeing rose 3% Wednesday morning despite missing second-quarter earnings and sales targets. Boeing still sees positive free cash flow forecast for the full year.
Dow Jones financial leader Visa beat third-quarter earnings and revenue estimates. Earnings grew 33% year over year to $1.98 a share. Sales gained 19% to $7.3 billion. FactSet analysts expected earnings of $1.75 a share on sales of $7.076 billion. Visa shares slipped less than 1% in morning trade.
Dow Jones Stocks To Watch: UnitedHealth
Health insurance giant and IBD Leaderboard stock UnitedHealth is further above its double-bottom-with-handle base’s 518.80 buy point after Tuesday’s 0.4% gain, according to IBD MarketSmith chart analysis. Shares were up 0.6% Wednesday.
UNH stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Top Stocks To Watch: ELF, Quanta, Ulta, Verra, Vertex
ELF Beauty is about 3% below a 33.54 buy point in a cup with handle following a recent skid. The RS line hit a new high last week, which is a sign of big stock market outperformance. ELF shares edged higher Wednesday.
Quanta Services is putting the finishing touches on a cup-with-handle base that has a 138.56 buy point, according to IBD MarketSmith chart analysis. Meanwhile, an early entry at 133.68 is also in play. Shares traded up 0.2% Wednesday.
IBD Big Cap 20 stock Ulta Beauty is building a flat base with 429.58 buy point, but is below its 50-day line after Tuesday’s 4.1% tumble. The base comes in the wake of a failed breakout past a cup-with-handle’s 426.93 entry in June. Ulta shares rose almost 1% Wednesday.
Verra Mobility is trading about 5% below a cup-with-handle’s 16.83 buy point in the wake of Tuesday’s 4.3% slide. The stock’s RS line continues to show tremendous strength as it hit a another new high last week. Verra shares were up 1% Wednesday.
IBD Leaderboard stock Vertex Pharmaceuticals found support around a cup-with-handle’s 279.23 buy point amid a two-day win streak, according to IBD MarketSmith chart analysis. The biotech leader is in the 5% buy area that goes up to 293.19 amid Tuesday’s 1.6% rise. Vertex stock was down 2% Wednesday.
Tesla stock skidded 3.6% Tuesday, falling for a second-straight session and giving back a part of last week’s earnings-fueled 13.4% surge. Shares briefly reached their highest level since early May, but are still about 38% off their 52-week high.
Shares rallied about 2% Wednesday morning.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares declined 0.9% Tuesday, extending a losing streak to three sessions. Apple remains above its 50-day line after bullish action in recent weeks. Still, shares 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 moved up 0.7% Wednesday.
Microsoft sold off 2.7% Tuesday, falling further below its 50-day line. The stock closed about 28% off its 52-week high. Microsoft traded up 5% Wednesday after the company’s earnings results and guidance.
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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