Dow Jones Rebounds As Stock Market Sell-Off Worsens; Microsoft Jumps On Earnings

The Dow Jones Industrial Average rebounded 270 points Wednesday morning after the stock market cut to its lowest level in more than a year. Tech giants Alphabet (GOOGL) and Microsoft (MSFT) — along with Dow Jones stocks Boeing (BA) and Visa (V) — reported their quarterly earnings.


Google-parent Alphabet dropped 4% early Wednesday after its March-quarter earnings and revenue missed Wall Street targets. Spotify (SPOT) and Teck Resources (TECK) were also among the key earnings movers Wednesday morning.

Spotify shares dived 9% despite better-than-expected first-quarter results. Teck Resources rose around 8%.

Twitter (TWTR) declined almost 2% after a 3.9% fall on Tuesday. And electric-vehicle giant Tesla (TSLA) rallied around 4% Wednesday morning.

Among the Dow Jones leaders, Apple (AAPL) was slightly higher, while Microsoft jumped 4% in today’s stock market.

Amid a new stock market correction, Dow Jones leader American Express (AXP) — along with Expedia (EXPE), Palo Alto Networks (PANW) and IBD Leaderboard watchlist stock World Wrestling Entertainment (WWE) — are among Wednesday’s top stocks to watch.

Microsoft and Tesla are IBD Leaderboard stocks. Expedia and Palo Alto Networks were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Today: Treasury Yields, Oil Prices

After Wednesday’s open, the Dow Jones Industrial Average advanced 0.8%, while the S&P 500 rose 1.1%. The Nasdaq moved up 1.4% in morning trade.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.8%. The SPDR S&P 500 ETF (SPY) moved up 0.5%.

The 10-year Treasury yield traded near 2.76% Wednesday after closing Tuesday at 2.77%. Last week, the 10-year Treasury yield hit its highest level since December 2018. Meanwhile, U.S. oil prices bobbed higher, with Texas Intermediate crude holding above $102 a barrel.

Stock Market Correction Worsens

On Tuesday, the major stock indexes sold off sharply. The disappointing action sent the Nasdaq and the S&P 500 back below Monday’s lows. That ended a very brief rally attempt. It also sent the Nasdaq back below its lows from mid-March, marking the index’s lowest level since March 2021. The S&P 500 held above its mid-March lows.

What happens next is unclear. As the market rolls into the final few sessions of April, a rebound could launch another new rally attempt. Amid the deepening stock market correction, investors should be on the defensive: taking profits and raising cash. Also, keeping a watchlist of stocks holding up well in a down market is a good way to prepare for the next uptrend.

Searching for the next rally’s leaders while the market is still correcting is a challenge. One helpful method is to use a stock’s relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, the RS line angles upward. If a stock is lagging the rest of the market, the line will point lower.

Tuesday’s The Big Picture column commented, “As noted among the panelists in Tuesday’s IBD Live show, many market technicians had been waiting to see if the key indexes would undercut their March near-term lows. By doing so, the increasingly weakening action could trigger a spike in fear and climactic selling action that could lead to a new bounce in equities.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Five Dow Jones Stocks To Watch Now

Dow Jones Earnings: Boeing, Visa

Dow Jones stocks Boeing and Visa reported their quarterly earnings results ahead of Wednesday’s open.

Boeing missed first-quarter estimates, sparking a 6% retreat in early trade. Boeing shares finished Tuesday about 35% off their 52-week high and below their 50- and 200-day lines.

Visa jumped 8% early Wednesday after the company beat Wall Street’s estimates. Visa shares are 20% from their 52-week high.

Dow Jones Stocks To Watch: American Express

Dow Jones financial stock American Express finished Tuesday farther below its 50-day line and about 8% away from a cup-with-handle’s 194.45 buy point after Tuesday’s 3% slide. AXP shares fell 0.3% Wednesday morning.

Keep an eye on the stock’s relative strength line. Amid its recent rise, the RS line is starting to move closer to its old highs, meaning it is again outperforming the broad market.

Four Top Growth Stocks To Watch In The Current Stock Market Correction

Stocks To Watch: Expedia, Palo Alto, WWE

Thursday’s IBD Stock Of The Day, Expedia, continues to build a cup with handle with a 204.08 buy point, according to IBD MarketSmith chart analysis. Shares are falling further below their 50-day line after Tuesday’s 4.4% tumble. EXPE stock shows a 92 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Shares traded up nearly 3% Wednesday morning.

Top cybersecurity stock Palo Alto Networks is still holding above much-needed support at the 50-day line after triggering a round-trip sell signal from a 572.77 buy point. Shares slid 3.2% Tuesday. PANW stock rose more than 1% early Wednesday.

IBD Leaderboard watchlist stock World Wrestling Entertainment also continues to hold above its 50-day moving average, falling just 0.3% Tuesday. Shares are just below a 60.94 buy point in a cup with handle. WWE stock was down 1.3% Wednesday morning.

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla Stock

Tesla stock rallied around 4% Wednesday morning after the stock broke down through its 50- and 200-day lines during Tuesday’s 12.2% dive.

Shares of the EV giant finished Tuesday about 24% away from a cup-with-handle’s 1,152.97 buy point. The stock traded as high as 1,243.49 on Nov. 4 and is about 30% away from that all-time high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares gave up support at its long-term 200-day line, sliding 3.7% Tuesday. Shares inched higher Wednesday morning.

Software leader Microsoft skidded 3.7% Tuesday, falling further below its 50- and 200-day lines. The stock closed about 23% off its 52-week high.

Late Tuesday, Microsoft beat analyst expectations for its fiscal third quarter on strong cloud computing business. It also offered in-line sales guidance for the current quarter. MSFT shares jumped 4% in early trade.

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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2022-04-27 13:54:00