Stock market indexes traded mixed in the first hour of Wednesday's session, consolidating Tuesday's broad-based upside. Netflix rallied 6% in Tuesday's premarket, after reporting lower-than-expected second-quarter subscriber losses, and drifted lower in the first hour of the new session.
The Dow Industrial Average is trading lower by 0.4% in early trading, while the S&P 500 is down by 0.1%. Nasdaq composite continued to lead in a rally underpinned by small caps, and is trading higher by 0.5%.
First hour volume showed modest declines on all exchanges compared to Tuesday.
WTI crude oil reversed near $102 a barrel, dropping 1.4%. Bond yields eased in a bullish overnight session.
Mortgage applications fell sharply in the week ending Jul. 15, increasing concerns that high rates are impacting housing sales.
June sales of existing homes fell 5.4% from May levels to 5.12 million, missing estimates for an annual rate of 5.38 million.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31698.45 | -128.60 | -0.40 |
| S&P 500 | (0S&P5) | 3933.49 | -3.20 | -0.08 |
| Nasdaq | (0NDQC ) | 11773.71 | +60.56 | +0.52 |
| Russell 2000 | 179.56 | +0.87 | +0.49 | |
| IBD 50 | 27.22 | -0.06 | -0.22 | |
Last Update: 10:16 AM ET 7/20/2022 |
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Nasdaq-100 component Biogen traded lower by 2.6% despite beating second-quarter expectations and raising fiscal year guidance. The company had reported earnings shortfalls in three of the last four quarters.
Wolfe Research downgraded PayPal Holdings to "Peer Perform," even though the stock has lost 75% of its value in the last year.
Roku and Walt Disney rose in sympathy with Netflix, gaining 4.6% and 2.4%, respectively.
Oil driller Baker Hughes missed top and bottom-line estimates despite the rapid rise in energy prices. The stock is trading lower by 10.1% at this hour.
Tesla Earnings After The Close
Tesla reports second-quarter earnings after the closing bell, with analysts looking for a profit of $1.81 per share. Market watchers worry the EV maker will post a material decline in earnings-per-share (EPS) due to the Shanghai shutdowns and ramp up of new production facilities in Texas and Berlin.
The company reported 255,000 deliveries in the second quarter, which was at the top end of estimates that were lowered due to Shanghai. Despite headwinds, June was the strongest production month in Tesla's history, as noted in the delivery press release.
Wall Street will focus squarely on second half guidance during tonight's confessional, with current expectations that H2 deliveries will increase by 40% to 50% compared to H1.
Finally, don't rule out a negative impact from CEO Elon Musk's ongoing dispute with Twitter. The trial is now set for October, so this distraction will continue into the fourth quarter. A portion of Musk's Tesla stock has been set aside as collateral for the deal and an adverse decision could trigger a public offering.
Wednesday Stock Market Highlights
IBD 50 component AstraZeneca rallied through the buy point at 67.50 on Tuesday and pulled back this morning. The stock holds a 98 Composite Rating, as well as a perfect "A" SMR and Timeliness Ratings. An A-rated SMR identifies companies with superior sales growth, profit margins and return-on-equity ratios.
The company has grown annual EPS every year since 2019 and is expected to earn $3.32 per share in 2022.
Phoenix-based Verra Mobility traded above the 16.83 buy point on Tuesday and settled near that level on Wednesday. The relative strength line lifted to a 52-week high at the same time. This price action completed the initial stage of a cup-with-handle breakout. Quarterly earnings growth has been flat since the Sept. 2021 quarter but the company has beaten estimates in each report since that time.
Annual EPS is expected to surge to over $1.00 per share in 2023, compared to $0.74 in 2021. On Tuesday, Verra raised full-year revenue guidance.
Cadence Design Systems, No. 34 on the IBD 50 list, has rallied into the 200-day moving average for the sixth time since breaking support in January. The company has beaten earnings estimates in three of the last four quarters. Annual EPS shows gains in each year since 2016, highlighting steady and predictable growth. The stock is expected to continue that bullish trend in 2022 and 2023, earning $3.92 and $4.42 per share, respectively.
Follow Alan on Twitter: @msttrader
