The Dow Jones Industrial Average fell from record levels despite Microsoft‘s (MSFT) surge. Google parent Alphabet (GOOGL) passed a buy point on strong earnings. However, IPO stock Robinhood (HOOD) shot lower on disappointing results. Tesla (TSLA) was turning in a gain.
Breakouts were hard to come by in a challenging session. ZipRecruiter (ZIP) managed to pass a buy point, but ended up flashing a sell signal in a seesaw trading day. Meanwhile Enphase Energy (ENPH) moved higher at warp speed following its earnings report.
Nasdaq Gains, Small Caps Struggle
The Nasdaq was benefiting from strength among the tech giants. It was leading the major indexes with a gain of 0.7%. Xilinx (XLNX) performed best, but Alphabet was not far behind.
The S&P 500 also managed to squeeze out a slender gain, though it was basically flat. Enphase energy fared best there.
The S&P sectors were mostly negative, with communication services and consumer discretionary the best upside performers. Financials and energy were the worst laggards. A dip in the 10-year treasury yield was hurting the financials.
U.S. Stock Market Today Overview
Last Update: 2:58 PM ET 10/27/2021
Small caps were suffering a chastening day, with the Russell 2000 falling 1.2%.
Growth stocks were also bitten by the bears, with the Innovator IBD 50 ETF (FFTY) falling 0.8%.
Dow Jones Down Despite Microsoft Stock
The Dow Jones Industrial Average pulled back slightly from record levels as it gave up 0.3%.
It dipped despite the fact Microsoft stock surged around 5% as it moved to a record high. Shares are now extended from a 305.94 buy point of a flat base.
The IBD Leaderboard stock was boosted after it easily beat fiscal Q1 views, with its powerful cloud computing business a highlight. Microsoft also guided higher for the holiday quarter. The software giant is an IBD Long-Term Leader.
Payments stock Visa (V) was the weakest Dow component, dipping more than 6%. It fell despite an earnings beat after issuing conservative revenue guidance.
Google Stock Passes Buy Point On Earnings
Alphabet rallied in heavy volume, passing a 2,925.18 buy point of a flat base.
The relative strength line spiked higher amid the bullish move. Google stock also surged back above its 50-day line, an encouraging sign for investors.
The stock was boosted after Alphabet posted September-quarter earnings and revenue that topped analyst estimates late Tuesday.
On the downside, YouTube and cloud computing sales were light in the Google earnings report.
Robinhood Arrows Lower On This
Robinhood stockholders were not merry on Wednesday after the stock took a dive on earnings.
The firm missed on the top and bottom lines in Q3. A loss of $2.06 per share was larger than expected. Total net revenue came in at $365 million, while transaction based revenue totaled $267 million.
One key point was a drop in user growth. Monthly active users came in at 18.9 million, lower than Q2’s 21.3 million.
JPMorgan analyst Kenneth Worthington questioned whether the firm will be able to “generate competitive margins” due to its focus on small accounts.
The stock trading firm, which operates primarily through its popular app, is now rooted below its IPO price of 38 per share.
Tesla Stock Up Again Amid Uber Move
Tesla stock was up about 2%. It’s trying to claw back gains after hitting, and then dropping from, its 20% profit goal from the 900.50 buy point of a deep cup base on Tuesday, MarketSmith analysis shows.
It rose after Hertz said Wednesday it is linking up with Uber Technologies (UBER) to make 50,000 Teslas available in the company’s ride-sharing network.
The rental car company is aiming to make the move by 2023. It is trying to build itself back after emerging from bankruptcy.
Hertz fell into bankruptcy at the start of the coronavirus pandemic. It exited Chapter 11 in June and has a stock listing planned for this year.
Rental car giant Hertz on Monday announced that it had placed an initial order of 100,000 Teslas by the end of 2022.
ZipRecruiter Breakout Fails; Enphase Warps Higher
ZipRecruiter passed a cup-with-handle buy point of 29.31, but then flashed a sell signal by dipping more than 7% below this entry.
The stock now sits down more than 3% for the day. Earnings risk is also high, with the firm expected to report results in 14 days.
Enphase Energy surged clear of a 181.82 buy point of a double-bottom base after gapping up in big volume.
The stock is now up nearly 30%, and is well extended from this entry. The Fremont, Calif.-based solar power systems maker surged after its Q3 earnings and sales easily beat Wall Street targets.
Earnings doubled year over year, while revenue rocketed by 97%.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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