Stock market indexes traded higher Wednesday morning ahead of the Fed's rate-policy decision, buoyed by upbeat earnings and guidance from software giant Microsoft.
At 10:30 a.m. ET, the Nasdaq was up 2.1%, while the S&P gained 1.6% and was close to recapturing its 200-day line. The Dow Jones Industrial Average traded 1% higher, and the small-cap Russell 2000 was up 1.1%.
The two-day Fed meeting concludes Wednesday afternoon, with a policy announcement due at 2 p.m. ET. There is some speculation that Fed policymakers could speed up the bond taper yet again. That would signal an even-faster shift to Fed rate hikes in the coming months.
Fed chief Jerome Powell will give his customary post-meeting news conference at 2:30 p.m. ET. His comments are crucial in understanding how aggressive the central bank will be in the coming months.
Microsoft's Earnings And Guidance Lift Stock Market
Microsoft gained 4.3% after an initial jump to 308. Microsoft is now back above its long-term 200-day moving average. Other big names jumped on Microsoft's earnings announcement.
Tesla gained 3.5% ahead of earnings due after the close, and Apple gained 1.9%. Apple is scheduled to release earnings on Thursday.
Microsoft earnings and revenue topped fiscal Q2 views.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34602.79 | +305.06 | +0.89 |
| S&P 500 | (0S&P5) | 4417.86 | +61.41 | +1.41 |
| Nasdaq | (0NDQC ) | 13817.88 | +278.58 | +2.06 |
| Russell 2000 | 201.03 | +2.19 | +1.10 | |
| IBD 50 | 38.05 | +0.78 | +2.09 | |
Last Update: 11:42 AM ET 1/26/2022 |
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A Long-Term Leader In The Stock Market
The Redmond, Wash.-based company earned $2.48 a share on sales of $51.7 billion in its fiscal second quarter ended Dec. 31. Analysts expected Microsoft earnings of $2.32 a share on sales of $50.7 billion, according to FactSet. On a year-over-year basis, Microsoft earnings rose 22% while sales increased 20%.
"Solid commercial execution, represented by strong bookings growth driven by long-term Azure commitments, increased Microsoft Cloud revenue to $22.1 billion, up 32% year over year," Chief Financial Officer Amy Hood said in a news release.
Microsoft earnings and guidance are important for cloud-computing rivals such as Amazon.com and Google parent Alphabet, as well as business software giants and even chipmakers such as Nvidia, another long-term stock market winner.
Nvidia shares gained 3.8% Wednesday morning. It was still more than 25% off its 52-week high but recaptured its 200-day line.
The growth-stock focused Innovator IBD 50 ETF was up 2.2%.
Texas Instruments shares rallied Wednesday after the chipmaker crushed analyst targets for the fourth quarter and guided higher for the current period. TXN stock jumped 4.8% on the news. The Dallas-based company late Tuesday said it earned $2.27 a share on sales of $4.83 billion in the December quarter. Analysts had forecast TI earnings of $1.95 a share on sales of $4.43 billion, according to FactSet.
F5 Networks also reported late Tuesday. F5 beat views, but guided low on 2022 revenue. F5 shares plunged 11.4%, triggering a sell signal.
Hawkish Fed Chief Snuffs Out Big Gains; Tesla Leads Earnings Movers Late
Boeing Chart Analysis
Boeing reported a huge loss early Wednesday, taking another big charge, while revenue fell short, even as cash flow turned positive. The Dow Jones aerospace giant gave no financial guidance for 2022, but is ramping up 737 Max production. BA stock fell 2.5% in morning trading.
Boeing stock is back below its downtrending 50-day moving average. Shares have been unable to muster a sustained campaign above that level of resistance since April last year. But investors should keep an eye on Boeing stock as it's currently in a very long consolidation with a 278.67 buy point, according to MarketSmith analysis.
AT&T stock rose early but soon faded to a loss of 2.7%. The telecom giant reported fourth-quarter earnings and revenue Wednesday that topped estimates while its 2022 revenue outlook met expectations. For the quarter ending Dec. 31, AT&T earned 78 cents per share on an adjusted basis, up nearly 4% from a year earlier. Revenue fell 10% to $41 billion including the divestiture of satellite TV firm DirecTV, but topped views.
Abbott Laboratories reported adjusted earnings of $1.32 per share on $11.47 billion in fourth-quarter sales. In response, ABT stock dipped. On average, analysts polled by FactSet expected the medical giant to earn $1.21 per share on $10.71 billion in sales. Covid tests generated $2.3 billion in fourth-quarter sales.
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