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Sunday, September 25, 2022

Dow Jones Today, Stocks Open Mixed After Microsoft, Alphabet, AMD Earnings; Enphase Nails Breakout, Tesla Extends Rally

Stocks were off to a mixed start Wednesday, amid weak global trade and a slurry of earnings reports. Earnings news on the Dow Jones today fueled early gains from Microsoft, Boeing, Coca-Cola and McDonald’s. Tesla jumped to extend its breakout. Enphase Energy and F5 Networks both aced early breakouts.


The Nasdaq Composite led the early action, rallying 0.5% as Tesla (TSLA) ran up 3.5%. The IBD Leaderboard stock leaned to extend its rally to an eleventh day. Tesla shares are extended above the buy range of a 900.50 buy point in a 38-week cup base.

The S&P 500 fought to a fractional gain, while the Dow Jones Industrial Average hung narrowly in the red on the stock market today. Markets in Europe traded lower as oil and metals prices backed further from recent highs. China’s markets took some steep losses, as tech stocks suffered hits following Tuesday’s U.S. Federal Communications Commission vote to bar China Telecom from operating in the U.S.

Earnings rolled out late Tuesday from growth giants including Microsoft (MSFT), Alphabet (GOOGL) and Advanced Micro Devices (AMD). All three stocks opened higher.

United Microelectronics (UMC), Bunge (BG) and Sunnova Energy International (NOVA) jumped more than 3% after early morning reports.

Earnings news sent Enphase International (ENPH) nearly 23% higher, leading the S&P 500 and pointing to a starting bell breakout. Electrical wire maker Encore Wire (WIRE) — already up nearly 22% for Oct. — rallied 7% on the heels of its third-quarter report.

Chips were mixed early, with Texas Instruments (TXN) down more than 6% after its earnings report. Fabless chipmaker Xilinx (XLNX) popped more than 6%, lifting its gain for Oct. to nearly 21%.

IBD 50 stock Affirm Holdings (AFRM) sailed 4.7% higher. The credit payment fintech outfit announced a buy now/pay later arrangement with American Airlines Group (AAL). American Air rose 0.7% in early trade.

Also on the IBD 50 list, Asana (ASAN), AppLovin (APP) and Monday.com (MNDY) all traded nearly 5% higher. BTIG launched coverage of AppLovin with a buy rating and a 114 price target.

Dow Jones Today: Boeing, Microsoft, Coke, McDonald’s Report

A big morning for blue chips has Boeing (BA), Coca-Cola (KO) and McDonald’s (MCD) all reporting third-quarter earnings, following earnings reports from Microsoft and Visa (V) late Tuesday. McDonald’s opened to a 1.8% gain, Coke popped 2.7%, leading the Dow Jones today after turning in above-forecast results. Visa tumbled 4.6%, despite topping analysts’ fourth-quarter revenue and earnings targets, and raising its dividend 17%.

Boeing inched up 0.4% higher, despite reporting a wider-than-expected loss for its third quarter.

Microsoft gained 2.5% early Wednesday. The software and cloud services giant easily outran analyst estimates for its fiscal first quarter. It also boosted its Q2 revenue guidance to above the consensus target. The IBD Leaderboard stock ended Tuesday in a buy range from a 305.94 flat-base buy point, according to MarketSmith analysis. The buy zone extends to 321.24.

Merck (MRK), Apple (AAPL) and Caterpillar (CAT) report on Thursday. Chevron (CVX) delivers its Q3 report on Friday.

Economic Data: Durable Goods Orders, Retail Inventories Slip

In economic news, the Commerce Department said durable goods orders fell 0.4% in September. Estimates were for a drop of 0.9%. Retail inventories fell 0.2% in Sept. from the prior month. And wholesale inventories rose 1.1% vs. a consensus forecast of a 1% increase.

Oil prices could see some reaction to weekly inventories data, due out from the Energy Information Administration at 10:30 a.m. ET.

Crude oil and copper prices backed off, with West Texas Intermediate oil down 1.3% and copper futures off more than 2% in early trade. The 10-year Treasury yield slumped 5 basis points, to 1.56%. Bitcoin dropped 5%, trading just above $59,000, according to CoinDesk.

Earnings: AMD, Enphase Energy, F5 Networks

IBD Leaderboard stock Advanced Micro Devices shed its premarket losses and gained 0.9% in early action, as at least nine analysts raised their price targets on the stock following Q3 results late Tuesday. AMD stock is on the Leaderboard and IBD 50 stock lists. It’s also on the Big Cap 20IBD Sector Leaders and Stock Spotlight watchlists.

AMD stock is extended after breaking out of a double-bottom base at a buy point of 114.59. Advanced Micro Devices was the IBD Stock Of The Day on Oct. 13.

Enphase International soared 23%. The Fremont, Calif. company squarely beat analysts’ third-quarter expectations, and boosted fourth-quarter guidance above views. The powerful opening gain set up a breakaway gap breakout opportunity, above a double-bottom base. The breakaway gap buy point would be at 215.84.

F5 Networks (FFIV) surged more than 9%. The Seattle-based networks solution provider topped fiscal fourth-quarter expectations by healthy margins late Tuesday. Shares cleared a 210.57 entry in a double-bottom base. The buy zone extends to 221.10.

Nasdaq, S&P 500 and Dow Jones Today

The S&P 500 has gained in nine of the past 10 sessions. The Nasdaq Composite and the Dow Jones Industrial Average have each gained in seven of the past nine sessions. The Dow and the S&P 500 are scratching out new record highs. The Nasdaq on Tuesday climbed to within a fraction of its Sept. 7 record peak, then reversed to end 1% below that mark.

Heading into the final trading week of Oct., the Nasdaq has a 5.45% gain so far for the month. The Dow has advanced 5.7%. The S&P 500 has a 6.2% gain.

Growth stocks have turned in a mixed performance. The iShares Russell 1000 Growth ETF (IWF) rallied 6.9% since Sept. 30. The Innovator IBD 50 ETF (FFTY) has a 4.5% gain.

For more detailed analysis of the current stock market and its status, study the Big Picture.

The result has left firmly intact the market uptrend begun with the Nasdaq’s Oct. 14 follow-through session. All three of the big benchmark indexes are trading comfortably above technical support levels. The Nasdaq faces possible resistance as it nears its early Sept. highs.

Some stalling on Tuesday lifted the Nasdaq’s distribution-day count to two. That is well below levels that should cause concern, but Tuesday’s action does hint that the index could have a tough time breaking through to new highs.

You can find Alan R. Elliott on Twitter @IBD_Aelliott


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