The Dow Jones and S&P 500 rose, but the Nasdaq faded after the first half-hour of trading Wednesday. Meanwhile, Netflix (NFLX) plummeted more than 30% after the video streaming service gave a gloomy outlook.
The Nasdaq composite reversed lower and was down 1%. The S&P 500 was nearly flat after wiping out a 0.6% early gain.
The Dow Jones Industrial Average rose 0.7% as several of its components gapped up. IBM (IBM) gapped up to a 6.5% gain after the company beat sales and profit estimates late Tuesday.
Procter & Gamble (PG) rose 2.8% after the household and personal care products giant beat March-quarter expectations. P&G also raised its sales forecast for the fiscal year ending in June. P&G stock broke out of a cup-with-handle base, rising above a buy point of 161.31, and is in a buy zone to 169.38.
Volume rose on the NYSE and Nasdaq compared with the same time on Tuesday.
Netflix Subscriber Losses Spark Rout
U.S. Stock Market Today Overview
|Last Update: 10:10 AM ET 4/20/2022|
Netflix stock plunged 33% to the lowest point since January 2018. Volume was heavy after the company late Tuesday stunned Wall Street with a loss of 200,000 subscribers in the first quarter. And it warned that it expects to lose 2 million subscribers in the current quarter.
Netflix was once one of the five largest stocks in the Nasdaq and one of the four stocks that made up the FANG acronym. But since peaking in November, the stock had lost more than half its value even before today’s rout. As of Tuesday’s close, Netflix did not even make the top 20 Nasdaq components, accounting for just 0.6% of the composite. In the S&P 500, Netflix is in the top 55, with a 0.4% weighting in the index.
In the semiconductor sector, ASML (ASML) rose more than 4% after the chip-equipment company beat first-quarter sales expectations and met profit estimates. But it forecast sales below estimates for the current quarter. The stock climbed back above its 50-day moving average but remains well below prior highs.
After today’s close, Tesla (TSLA) will announce first-quarter earnings. Analysts expect earnings to more than double to $2.26 a share, according to FactSet. Sales are estimated to climb 69% to $17.595 billion. Tesla shares fell 0.7% and are forming a cup-with-handle base with a 1,152.97 entry. The report comes as CEO Elon Musk makes a hostile buyout bid for Twitter (TWTR).
Breakouts, IBD 50 Index
Life Storage (LSI) rose above the 148.40 buy point of a cup with handle, but volume was light. The relative strength line is at new highs, a positive sign.
Edwards Lifesciences (EW) broke out of a cup with handle in heavy trading. The stock was added to IBD Leaderboard Tuesday. DT Midstream (DTM), a new issue in the fuel pipeline and storage industry, is above the 58.15 buy point of a flat base. But volume is below average.
The Innovator IBD 50 (FFTY) ETF, which includes Tesla, fell 0.6%. Among its movers, Rexford Industrial Realty (REXR) followed through on Tuesday’s breakout from a 78.44 buy point, rising another 3.4% Wednesday, and remains in buy range to 82.36. The industrial property owner reported earnings Tuesday.
But MP Materials (MP) fell 2.4% and is now below the 50-day moving average. It already had given a sell signal by erasing a gain of more than 25% from its 47.40 buy point.
The price of U.S. crude oil rose 0.6% to $103.16 a barrel. The yield on the 10-year Treasury note eased 2 basis points to 2.89%.
Most S&P sectors rose in the first half-hour of trading, except Communications Services Select Sector SPDR (XLC). The fund, in which Netflix is a top 10 holding, slid 2.4%. The consumer staples, transportation, utilities and industrial sectors rose more than 1% each.
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