Major stock indexes held strong gains in afternoon trading Wednesday. Visa and Leaderboard stock Microsoft were the top gainers in the Dow Jones Industrial Average, helped by strong earnings reports. Automatic Data Processing outperformed nicely in the Nasdaq 100, also fueled by strong earnings.
ADP stock jumped 4% as it draws closer to a 240.73 cup-with-handle entry. Visa stock surged 8% but the stock fell off highs after bumping up against its 200-day moving average. Visa also got turned away at its 200-day line last week. MSFT stock jumped more than 6%, but it's still below its 50- and 200-day moving averages.
The Nasdaq 100 held up well, up 0.4%, despite sharp declines for Netflix, Google parent Alphabet and Facebook parent Meta Platforms, which reports earnings after the close today.
GOOGL stock swooned around 4% after reporting disappointing earnings and slower growth at its YouTube unit.
Coal stocks outperformed for the second straight session on the heels of a strong earnings report from Arch Resources Tuesday. Inside the MarketSmith Growth 250, top gainers in the coal group included Alpha Metallurgical, ARCH stock and Consol Energy.
The 10-year Treasury yield was up 3 basis points to 2.8% after hitting an intraday low of 2.75%. WTI crude oil futures edged lower to $100.87 a barrel.
Dow Jones Today
The Dow Jones industrials were up almost 1.2% in afternoon trading despite a 7% decline in Boeing, which reported sluggish Q1 results.
Caterpillar also outperformed in the Dow Jones, up 2%. CAT stock is finding support at its 200-day line after falling 10.5% in the prior four sessions.
Dow Inc. picked up 1%. The stock is holding gains and finding support at its 10-day moving average after a breakout over a 65.04 buy point. Coca-Cola is also showing relative strength after a breakout over a 63.12 entry.
After giving up its 200-day line Tuesday, Apple rallied 1% ahead of Thursday's earnings report. Apple reports late Thursday along with Amazon.com.
Wednesday's gains in the major stock indexes were good to see after another ugly down session Tuesday. But it takes a lot more than one day of strength for a bottom to be put in. Be on the lookout for a follow-through day, which has been seen at every single market bottom in the past. But if a follow-through day comes soon, make sure there are setups to buy. If they're few and far between, listen to the market's message and keep your power generally dry.
Facebook Soars On Earnings After Market Bounce Fizzles
Outside The Dow Jones
The S&P 500 delivered plenty of bullish price gainers, including solar firm Enphase, which popped 8%. ENPH stock gapped up and came close to its 200-day line, but gains faded.
Mastercard followed Visa higher ahead of its earnings report early Thursday. The Zacks consensus estimate is for adjusted profit of $2.17 a share, up 25% from the year-ago quarter. Revenue is expected to rise 18% to $4.9 billion.
Insurer Chubb gave a buy signal with a nice move above its 50-day moving average. A big earnings beat was the catalyst, but new buys are especially risky when the stock market is in a correction.
Inside the IBD 50, Flex LNG and Bunge outperformed with gains of 9% and 5%, respectively.
Flex recently flashed a sell signal when it erased a 20% gain from a 25.51 buy point. But it didn't take long for the stock to find support at its 50-day line.
Agriculture stock Bunge continues to show relative strength, but it's been riding its 10-week moving average higher for a while now and looks extended at this point.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
