Banking

Dow Jones Pares Early Gain As Stock Market Fades; Microsoft Earnings Due After Hours

Key market indexes held small gains but traded near session lows midday Tuesday, as the Dow Jones Industrial Average erased much of a 152-point move.




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The Nasdaq was up 0.2%, the S&P 500 rose 0.3% and the Dow Jones industrials added 0.2% in the stock market today. Small caps tracked by the Russell 2000 were down 0.3%. Volume was higher on both major exchanges vs. the same time Monday.

Among exchange traded funds, Innovator IBD 50 (FFTY) fell 0.9%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) gained 0.5%. The IBD 50 ETF recovered a 50.06 buy point of a failed breakout on Monday.

The U.S. economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns over a year ago. A resurgence in cases fueled by the more contagious delta variant has recently started to slow down as vaccinations rise.

Cumulative Covid-19 cases worldwide are approaching 245 million, with nearly 5 million deaths, according to Worldometer. In the U.S., cases have topped 46 million with over 757,000 deaths.

In Earnings Today

Facebook (FB) fell more than 4% in heavy volume and slipped below its 200-day moving average. Late Monday, the social media giant reported Q3 earnings that topped views but revenue that missed. The company reported adjusted earnings of $3.22 a share on revenue of $29 billion. Analysts expected earnings of $3.19 a share on revenue of $29.6 billion.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35792.99 +51.84 +0.15
S&P 500 (0S&P5) 4579.53 +13.05 +0.29
Nasdaq (0NDQC ) 15259.88 +33.17 +0.22
Russell 2000 (IWM) 228.95 -0.62 -0.27
IBD 50 (FFTY) 49.69 -0.47 -0.94
Last Update: 12:10 PM ET 10/26/2021

On Friday, Facebook shares tumbled more than 5% in the wake of disappointing revenue and guidance from rival Snap (SNAP).

UPS (UPS) gapped up and soared 8% in fast turnover to clear the 215.03 buy point of a cup base. It’s also close to a higher 219.69 buy point of a longer pattern. The airfreight delivery giant easily beat Q3 expectations and hiked its 2021 financial targets. UPS  increased earnings 19% to $2.71 a share with sales up 9% to $23.114 billion. Analysts were expecting EPS of $2.55 on revenue of $22.573 billion.

Other big names on tap to report include Advanced Micro Devices (AMD), Alphabet (GOOGL) and Twitter (TWTR) after the close today.

Growth Stocks To Watch

Nvidia (NVDA) gapped up and surged more than 7% in heavy trade to a new high. Shares are now extended from a 230.53 buy point of a shallow six-week cup base, according to MarketSmith chart analysis. The buy range topped out at 242.06. Nvidia is an IBD Leaderboard and IBD 50 stock. Its relative strength line, which compares a stock’s performance vs. the S&P 500, is at a record high.

Also in the IBD 50, CrowdStrike (CRWD) rose nearly 5% in twice normal trade to break out past the 289.34 buy point of a cup base. The stock remains in buy range up to 303.81. Early Tuesday, the cybersecurity firm announced a deeper relationship with Amazon Web Services to further protect customers against ransomware attacks and identity-based threats.

On the downside, MP Materials (MP), Upstart (UPST) and Confluent (CFLT) lost more than 5% each. Jefferies downgraded its Upstart rating to hold from buy.

Dow Jones Movers

On the Dow Jones index, Microsoft (MSFT) and Visa (V) announce after the closing bell. Apple (AAPL) reports after hours Thursday.

Software giant Microsoft climbed 0.9% Tuesday ahead of earnings. Shares remain in buy range above its latest buy point. The flat base had a 305.94 buy point, and the 5% buy zone tops out at 321.24. When Microsoft reports late Tuesday, analysts expect it to earn $2.08 per share on revenue of about $44 billion.

Among other Dow gainers, Cisco (CSCO), Dow Inc. (DOW) and UnitedHealth (UNH) advanced more than 1% each.

But Intel (INTC) fell 2.5%, while Walgreens (WBA) and American Express (AXP) gave up about 1% apiece.

Other News

Digital World Acquisition (DWAC), a special-purpose acquisition company (SPAC) merging with Trump Media & Technology Group, sank 18% Tuesday. That extended Monday’s 11% drop. On Friday, shares surged 107%. Last week, Donald Trump announced plans to launch a social media company named Truth Social. There will also be a subscription-based video-on-demand service to be called TMTG+.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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