The Dow Jones Industrial Average and other stock market indexes eased off Monday's rally highs in the first half of Tuesday's session, awaiting the next round of earnings catalysts.
Investors are breathing a sigh of relief this week because the Fed has entered its quiet period, with a news blackout until the Feb. 1 rate decision. That lowers risk from hawkish sound bites that have killed buying interest over and over again in the last year.
Dow Jones components moved Tuesday's early market and are set to move Wednesday's as well.
Johnson & Johnson fell 1.3% after Q4 earnings beat expectations but light revenue marked a 4% year-over-year decline. Even so, the drug giant raised fiscal 2023 EPS guidance.
3M got blasted with a 4.9% loss after missing Q4 earnings and guiding fiscal 2023 top and bottom lines below analysts' consensus guidance. The company announced 2,500 job cuts.
Also in the Dow, Verizon Communications reported in-line Q4 results but issued downside guidance for fiscal year 2023. VZ stock traded 0.1% higher into the lunch hour.
Verizon and 3M were among many stocks briefly halted on the NYSE for what was called a technical issue. (Note: some MarketSmith charts show "fat finger" price bars that should be corrected by the exchanges.)
General Electric rose 0.3% after beating Q4 earnings and reporting 7.3% year-over-year revenue growth. However, it also slashed fiscal 2023 earnings guidance.
According to the Wall Street Journal, Elon Musk insists he had the funding to take Tesla private when he floated the idea on Twitter in 2018. There is a lawsuit against him claiming investors lost money when he at that time reneged, and that he's to blame. TSLA stock lost 1.4%.
Tuesday's Stock Market
The S&P 500 mounted the 200-day moving average Monday and tested that level midday Tuesday. The Nasdaq composite remains below moving average resistance.
It's best to think of the 200-day as a "zone" rather than a "price" because stocks and indexes can spend weeks whipping across its boundaries before building long-term support or resistance.
The Dow Jones Industrial Average traded flat into the lunch hour while the S&P 500 shed 0.1%. The Nasdaq also fell 0.1% while Monday's big tech winners gave up some ground. The Russell 2000 small-cap index matched tech and blue chips, down just 0.1% at this hour.
NYSE and Nasdaq volume slumped compared with Monday's session.
The 10-year Treasury note yield fell 4 basis points to 3.47%. Crude oil reversed off its multimonth high, down nearly 2% to $80.25 per barrel.
In the crypto world, Bitcoin rallied to a five-month high above $23,000 and is holding above the 200-day moving average.
Microsoft's Azure Problem
Dow Jones components Microsoft and Boeing could move the stock market into Wednesday's opening bell.
Seattle's big tech giant Microsoft is forecast to post a December-quarter profit of $2.31 per share on $53.2 billion in revenue. All eyes will be focused on year-over-year growth numbers at the Azure cloud-computing division. They have slowed dramatically since 2021, from 50% to 46% to 46% to 40% to 36% in the latest quarter. MSFT stock traded down 0.2%.
The company announced 10,000 layoffs last week.
Seattle's aerospace giant Boeing reports in Wednesday's premarket, with expectations for a profit of just 20 cents per share on $20.1 billion in revenue. Boeing is finally ramping up long-delayed 787 production, but the 737 MAX is still waiting for final China recertification. BA stock rose 0.6% into the lunch hour.
IBD 50 Movers And Shakers
The Innovator IBD 50 ETF outperformed despite stock market weakness, up 0.2%.
Box has returned to the IBD 50 after a major decline to start 2023. The cloud-computing platform is trading just 2% below the 32.10 buy point of a monthlong flat base. And that level is just a point shy of April 2022's all-time high at 33.04.
The company is expected to grow earnings by double-digit percentages in both 2023 and 2024. BOX stock fell 0.5% in the first half.
IBD 50 component Valero Energy entered the buy zone of an eight-month cup-with-handle base Monday. Earnings have grown by triple-digit percentages, year over year, in each of the last six quarters; in some quarters the company had a profit vs. a year-ago loss. VLO stock added 0.2%.
Also in the IBD 50, Monolithic Power Systems surged above the 200-day moving average Monday but reversed lower at midday. It broke down from the 200-day line in heavy volume in September. MPWR stock traded lower by 1.8%, still holding moving average support.
Chip stocks have led the market so far in 2023, with the semiconductor index up nearly 15%.
Follow Alan Farley on Twitter at @msttrader.
