Dow Jones Falls: Netflix Slides On Q1 Results, Tesla Skids On Pre-Earnings Price Cuts
Tesla has cut prices on some of its vehicles in the U.S. Tesla earnings are due late.
Netflix (NFLX), which has been struggling to grow its subscriber base, is blamed for the Dow Jones Industrial Average's drop. Tesla's (TSLA) earnings will be released after the close, as Elon Musk's electric vehicle giant has again cut the prices of some Model Y and Model 3 EVs sold in the U.S.
Netflix's report released late Tuesday showed that it had missed Wall Street’s goal for new subscribers during the first quarter. It also offered a bleak outlook. Netflix's stock fell on the news at first, but rebounded later in extended trading. Shares fell 3% on Wednesday morning.
The other key earnings movers on Wednesday morning included ASML Holdings (ASML), Morgan Stanley, Interactive Brokers, Intuitive Surgical, United Airlines (UAL), Dow Jones Stock Travelers (TRV), and regional bank Western Alliance.
ASML shares dropped 3% during morning trading, as concerns about sketchy demand signals overshadowed the company's impressive first-quarter earnings and revenue. Morgan Stanley shares fell 2.7%. Interactive Brokers sold early 3% of its shares, but Intuitive Surgical announced a huge resurgence of robotic surgery procedures in the March quarter. ISRG stock soared 11%.
United Airlines rose 2% this morning, while Travelers gained 6%. Western Alliance's shares soared by 20% following the company’s better than expected first-quarter results.
Stock Market Today
Tesla, the electric vehicle giant, has fallen more than 3% during early trading ahead of its earnings report for the first quarter due Wednesday. Apple (AAPL), Microsoft (MSFT), and other Dow Jones tech giants were down after the stock market opened today.
The current market rally has brought a number of stocks into focus, including Crocs (CROX), Floor & Decor FND (IBD Leaderboard stock Lululemon Athletica LULU), Vertex Pharmaceuticals VRTX (as well as Dow Jones stocks Cisco Systems CSCO, JPMorgan Chase JPM) Nike NKE and Visa VRTX (as well as Dow Jones Dow Jones stocks).
This week's Stocks Near A Buy Zone featured JPMorgan and Lululemon.
Dow Jones Today: Oil prices, Treasury Yields
The Dow Jones Industrial Average fell 0.4% after Wednesday's opening, as Intel (INTC), following the ASML Report, was under pressure from sellers. S&P 500 fell 0.5%. The Nasdaq composite, which is dominated by tech stocks, fell 0.6% during morning trading. CDW (CDW), the index's bottom-most component, was down 10%.
The Nasdaq-100 tracker Invesco QQQ Trust, (QQQ), fell 0.8% while the SPDR S&P500 ETF, (SPY), traded lower by 0.3% on early Wednesday.
On Wednesday, the 10-year U.S. Treasury rate traded at 3.61%. This continued its recent rally. The 10-year yield recovered from its lowest point since mid-September last week.
The U.S. crude oil price continued its decline from the high of $83 per barrel on April 12. Early Wednesday, West Texas Intermediate futures fell almost 2% to just over $79 per barrel. Energy Information Administration will release its weekly oil inventory report at 10:30 am ET. ET.
Stock Market Rally
The Dow Jones Industrial Average dipped lower on Tuesday. Boeing (BA), and Home Depot HD were the two biggest winners. Boeing stock rose 1.6% while HD shares jumped 1.2%. The S&P 500 gained 0.1% and the tech-heavy Nasdaq closed lower than 0.1%.
Dow Jones Stocks to Buy and Watch: Cisco Systems JPMorgan Nike Visa Visa
Cisco Systems is still below the 51.84-point buy point of a flat basis after Tuesday's 0.1% gain. According to IBD MarketSmith's pattern recognition, there is still no sell signal. Cisco will report its fiscal third-quarter results May 17.
JPMorgan's shares rose by 1.1% on Tuesday. They are now closer to the 144.44-point buy point of a flat basis, following Friday's surge in earnings. JPM's stock fell 0.1% in the early hours of Wednesday.
Nike shares rose Tuesday. They are still above the 50-day line. Stock is nearing the 131.41 buy-point and just above an early entry of 126.16. NKE shares fell 0.4% during early trading.
Visa shares are still in the buy range above the 230.15 cup with handle buy point. The range of buys goes up to 241.66. V shares fell 0.2% early in the morning. Visa will report its fiscal second quarter results on April 25, 2019.
Best Stocks To Buy And Watch: Crocs, Floor & Decor, Lululemon, Vertex
Crocs' shares rose 3.4% on Tuesday, surpassing the 143.60 purchase point of a cup-base, according to IBD MarketSmith. The 5% range extends up to $150.78. CROX's stock rose 0.5% in the early hours of Wednesday. The company will report its first-quarter earnings by April 27.
Backstory: Broomfield-based Crocs, best known for their rubbery casual shoes, is headquartered in Colorado. In recent years, the company expanded its Crocs portfolio beyond classic slip-ons to include sneakers, wedges, boots and sandals. Crocs accounts for around 75%. Heydude, the company's brand of comfort shoes in suede, canvas and leather, accounts for 25% of sales.
Floor & Decor's 2.5% gain on Tuesday was a decisive break past the 99.47-buy point for a cup with handle. FND shares fell 1.7% in the early hours of Wednesday. Floor & Decor will report its first-quarter results on May 4.
Floor & Decor is a retailer with 191 warehouses and six design studios in 36 states. It sells wood, tile, laminate, vinyl and natural stone products. The company also sells decorative items. The earnings are expected to drop 2% in 2019 before increasing by 27% in 2020 and 24% in 2030.
IBD Leaderboard stock Lululemon finished Tuesday just below a 371.36 purchase point in a cup handle. Shares fell 0.1% Wednesday morning.
Lululemon raised its 2023 guidance on March 28 after exceeding earnings and revenue expectations for the fourth quarter holiday season. This sparked a 12.7% increase on March 29. The retailer of yogawear and athleisure clothing's final results for the fourth quarter also exceeded their own preliminary announcement from early January.
Vertex Pharmaceuticals has given up the 325.29 cup base buy point in Tuesday's 0.8% decline. VRTX gained 0.6% on Wednesday.
The Dow Jones Leaders are among the four best stocks you can buy today.
Cup with handle (Visa (V) 230.15)
Cisco Systems (CSCO) 51.84 Flat base
Source: IBD data as of April 19, 2023
Tesla Stock Skids Ahead Of Earnings
Tesla's stock fell 1.5% on Tuesday, reversing Monday's gains. In recent weeks shares have triggered the loss rule of 7%-8% from a purchase point at 200.76 on a cup handle. They also fell below the 50-day line – a critical level.
The stock has been experiencing some resistance in that area. It is now in a holding pattern, awaiting the first-quarter earnings announcement on Wednesday. The stock's prospects would be boosted by a decisive retake. The stock ended Tuesday at 50% below its 52-week peak.
Tesla reduced prices for the second time in a month on Tuesday evening. Tesla Model Y has been reduced by $3,000 and now starts at $46,990. Tesla Model 3 was also reduced by $2,000 and now costs $39,990.
Tesla has reduced its prices six times in 2023. The previous cuts were in Europe, Singapore, and Israel. Rumors suggest that Tesla may cut prices in China again after the major price reductions made in early January and late October.
TSLA's stock fell 3.3% in the morning of Wednesday, threatening to increase Tuesday's losses.
Wall Street predicted earnings for the first quarter of 85 cents a share on Wednesday. This is a drop of nearly 20% compared to last years. Wall Street expects revenues to grow 26%, reaching $23.73 billion.
Dow Jones Leaders - Apple and Microsoft
Apple stocks rose 0.75% on Tuesday. Apple will report its fiscal second quarter results on May 4th.
Microsoft shares have risen to the top of their buy range, past the 276.86 purchase point. They are down 0.15% on Tuesday. The 5% area is a rise from the buy-point to 290.70. On Wednesday, MSFT's stock fell 0.6%. The company will report its fiscal second quarter results on April 25, 2019.