The Dow Jones Industrial Average rallied more than 175 points Wednesday, as Netflix stock plunged on earnings. Apple and Tesla briefly sold off in morning trade, while chip leaders Lam Research and Nvidia are in or near buy zones.
Among the Dow Jones leaders, Apple (AAPL) declined almost 1% Wednesday, while Microsoft (MSFT) moved up 0.4% in today’s stock market. Verizon (VZ) turned lower after reporting earnings ahead of the stock market open.
Tesla (TSLA) reversed higher Wednesday, following Tuesday’s 0.6% gain. Netflix (NFLX) reported disappointing subscriber numbers after the close Tuesday.
Among the top stocks to buy and watch, Lam Research (LRCX) and Nvidia (NVDA) are in or near new buy zones.
Lam Research and Microsoft are IBD Leaderboard stocks. Apple and Nvidia were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today
The Dow Jones Industrial Average rose 0.5%, while the S&P 500 gained 0.4%. The tech-heavy Nasdaq composite moved up 0.2% in morning trade after reversing from early losses.
Among exchange traded funds, the Innovator IBD 50 (FFTY) traded up 1.3% Wednesday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) rose 0.1%. Meanwhile, the SPDR S&P 500 ETF (SPY) was up 0.4%.
Stock Market Rally: Dow Jones, S&P 500 Below Highs
Amid the current stock market rally, the Dow Jones Industrial Average and S&P 500 hit record highs Friday, but are now pulled back after two straight days of losses Tuesday.
Meanwhile, the tech-heavy Nasdaq sits just off its own all-time highs amid the index’s recent strength, but is finding resistance around the 14,000 level.
Tuesday’s Big Picture commented, “However, what should concern active investors is how some new breakouts in recent weeks have turned out to be disappointing.”
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Dow Jones Earnings: Verizon
Early Wednesday, Verizon reported first-quarter adjusted earnings that topped estimates while revenue also came in above Wall Street targets.
Verizon stock reversed slightly lower Wednesday morning, on pace to snap a seven-day win streak.
Stock Market Earnings: Netflix Earnings
FANG leader Netflix reported significantly fewer new subscribers than forecast for its first quarter. It also disappointed with its subscriber outlook. The company added 3.98 million new streaming subscribers in the first quarter. At the start of the quarter, Netflix forecast adding 6 million new subscribers in the period. Wall Street was looking for 6.3 million net new Netflix subscribers in the March quarter.
NFLX stock plunged as much as 8% in morning trade and is breaking down below its 50-day and 200-day moving averages.
Stocks To Buy: Lam Research, Nvidia
IBD Leaderboard stock Lam Research is back in buy range past a 603.70 buy point in a cup base. The 5% buy range runs up to 633.89. Shares were up about 2% early Wednesday.
According to Leaderboard commentary, “The relative strength line made new highs at the breakout, a bullish sign. The base is as short as cup patterns come, but it also revealed a smooth shape and some evidence of institutional accumulation. It is a third-stage base, so it may be tough to match Lam’s prior breakout moves.”
Graphics-chip maker Nvidia ended Tuesday about 1% below its 615 buy point in a new cup base amid the day’s 1.2% fall, according to IBD MarketSmith chart analysis. The 5% buy zone goes up to 645.75. Shares rallied about 1% Wednesday morning, but remain below their buy point.
According to IBD Stock Checkup, Nvidia stock boasts a strong 95 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
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Tesla stock reversed 0.5% higher Wednesday morning, looking to add to Tuesday’s 0.6% rise.
Last week, shares of Tesla regained their key 10-week moving average, a critical support level, for the first time since late February. Tesla is forming a new base, but it is too early for a new risk-optimal buy point.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple lost about 1% Wednesday, threatening to add to Tuesday’s 1.3% decline in the midst of the day’s “Spring Loaded” product event. Apple announced the long-awaited debut of item trackers called AirTags. It also introduced new iMac desktop computers running Apple-designed processors and new iPad Pro tablets.
Apple stock is building a cup base with a 145.19 buy point, according to MarketSmith chart analysis.
Software giant Microsoft moved up 0.4% Wednesday. Microsoft is trading at the top of the 5% buy range past a flat base’s 246.23 buy point that tops out at 258.54.
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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