Major indexes fell to session lows in early afternoon trading Wednesday. The Dow Jones Industrial Average fell 0.8%. The index has broken support at the 50-day moving average. The S&P 500 is also breaking the 50-day line with a 1% fall at 1:30 p.m. ET while the Nasdaq lagged by 1.3%, also poised to break the 50-day line.
The Institute of Supply Management services index showed a higher-than-expected reading of 54.5, signaling economic expansion, according to Econoday. The Fed's Beige Book, which assesses current economic conditions, will be released later Wednesday. The data increased the odds of a rate hike in November to 45.5%, according to the CME FedWatch Tool.
Volume on the NYSE and Nasdaq was lighter compared with the same time on Tuesday.
The small-cap Russell 2000 fell 0.7%, while the Innovator IBD 50 ETF had a smaller decline of 0.5%.
Crude oil was unchanged at $86.75 a barrel.
The yield on the benchmark 10-year Treasury note rose 2 basis points to 4.29%.
Dow Jones Stocks
Dow component Apple sank below its 50-day line, delaying progress on its cup base with a buy point of 198.23. Salesforce is rebounding from its 50-day line.
Microsoft fell and is breaking the 50-day line as well. The stock has a lot of work to do to get to a buy point of 366.78.
Stocks Moving Today
C3.ai reversed lower by 1.3% with earnings due after market close. The stock is below the 50-day line and trying to break a downtrend.
Late Tuesday, outside the Dow Jones, cybersecurity software play Zscaler and workflow software maker Asana reported quarterly results, and both fell Wednesday.
Zscaler beat estimates after revenue grew 43% from the prior year, while earnings per share of 64 cents showed a 156% increase. The software maker gave a midpoint current-quarter sales outlook of $473 million with earnings per share of 49 cents at the high end. ZS stock pared some early losses but was still down over 2%. The stock faces resistance around 163.
July-ended quarter revenue grew 20% for Asana, to $162.5 million, while a loss of 4 cents per share narrowed from a 34-cent loss in the prior-year same quarter. Free cash flow of $14.6 million showed a reversal from negative $42.3 million over the same period a year ago. But that apparently wasn't enough for investors as the stock fell more than 10% and undercut its base. It's also testing its 200-day moving average.
Domestic and international travel demand in the second quarter led to a 159% spike in sales to $1.6 billion for Trip.com. Earnings per ADS of 70 cents marked a huge improvement from a 5-cent loss in the year-ago period. Shares are trying to hold support at the 50-day line, although Trip.com has fallen as much as 5% from its breakout at 40.17.
Software Earnings On Deck, Outside Dow Jones
Sprinklr is in a buy zone ahead of second-quarter results due after the market close. The software maker gave revenue guidance of $173 million at the midpoint and earnings per share of 4- to 5-cents a share for the quarter. The relative strength line is at a new high, earning the stock an RS Line Blue Dot on its weekly MarketSmith chart.
Also due for earnings after market close, financial software provider Intapp regained its 50-day line Wednesday. The company's guidance sees midpoint sales of $93 million and earnings per share of 1 cent.
In retail, Dave & Busters fell further in a downtrend ahead of its earnings, which are due after the closing bell of the stock market today.
AMC Entertainment fell after news that the movie theater company is selling up to 40 million shares. Shares hit an all-time low on Wednesday.
Futures: S&P 500 Breaks Key Level; What To Do Now
Photronics, Daktronics Report
Photronics gapped lower but shaved the decline to 8% after earnings missed views. For the fourth quarter, midpoint revenue guidance of $227 million also came in below estimates. Shares are bouncing from the 200-day line but have undercut a cup base that was forming.
Among other earnings movers outside of the Dow Jones, video display maker Daktronics gave back much of its gains after it shot past a buy zone in early trading. Sales increased by 35.3% while earnings per share of 42 cents reversed from a loss in the prior year same quarter. The stock was up 5% in the afternoon.
AeroVironment surged after results beat estimates and an analyst upgraded the stock. Shares of the drone maker are extended from the 112.39 buy point.
Core & Main plunged below its 50-day line after second-quarter results. Becton Dickinson fell below its 50-day line as well.
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