The Dow Jones Industrial Average closed higher after dipping into the negative on Wednesday, while the Nasdaq led the upside, closing well over 1% higher. Shares of Netflix popped after the streaming giant lost fewer subscribers than expected in Q2.
Dow Jones Closes Positive, Nasdaq Leads Upside
At the close, the Dow Jones rose 0.2% after trading in the negative. The S&P 500 also closed higher, up 0.6% while the Nasdaq advanced 1.5%. Small caps surged higher as well with the Russell 2000 up 1.5%. According to early data, volume was running higher on the Nasdaq and on the NYSE vs. the close on Tuesday.
Consumer discretionary and communication services stocks led the upside among the S&P 500 sectors, while utility stocks lagged. Meanwhile, energy and technology stocks also outperformed. The Energy Select Sector SPDR ETF rose 1.3% while U.S. crude oil prices fell, down 1.5%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31870.34 | +43.29 | +0.14 |
| S&P 500 | (0S&P5) | 3959.33 | +22.64 | +0.58 |
| Nasdaq | (0NDQC ) | 11893.96 | +180.81 | +1.54 |
| Russell 2000 | 181.37 | +2.68 | +1.50 | |
| IBD 50 | 27.33 | +0.05 | +0.18 | |
Last Update: 4:02 PM ET 7/20/2022 |
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On Monday, the major indexes reversed lower from key levels of resistance. But the market rally rebounded strongly Tuesday in higher volume and all indexes have now reclaimed support at their 10-week moving averages.
Netflix Earnings Push Stock Higher; Tesla On Deck
Shares of Netflix rose nearly 7% on Wednesday after the company reported earnings late Tuesday. The streaming services giant surprised investors with a quarterly subscriber loss of 970,000, which was better than company forecasts for a loss of 2 million. The firm topped second-quarter earnings expectations while revenue slightly missed.
Analysts expected a bottom line of $2.99 a share and revenue of $8.05 billion. Netflix reported EPS of $3.20 and sales of $7.9 billion. Shares remain well off highs of around $700 a share last November.
The stock just recently reclaimed support at its 50-day line and has been moving higher in strong volume in recent sessions. After the last earnings report, shares of Netflix plummeted over 35% on April 20. The stock still has some repair work to do before it becomes a viable buy candidate.
Elsewhere, shares of Tesla rose 1% ahead of its earnings which are due after the close Wednesday. Analysts expect Tesla EPS to increase from the same quarter a year earlier but decline substantially from Q1 of this year. The decline is expected to reflect Covid-related impacts on its Shanghai production. Tesla stock climbed above its 50-day line on Tuesday and is now trading just below some short-term resistance. But shares remain far below its peak 1,243.49 near the end of 2021.
Stocks To Watch: These Companies Break Out
Shares of auto parts retailer Genuine Parts broke out from a 142.10 flat-base entry on Wednesday. The stock moved higher in low volume, which isn't ideal. But the stock is well supported above its key moving averages like the 50-day and 21-day lines. The stock is part of the auto parts retail and wholesale industry group, which ranks No. 20 out of IBD's 197 groups. A best-possible Composite Rating of 99 bodes well for the breakout.
The company is set to announce quarterly earnings before the market opens next Wednesday, July 27. Analysts expect EPS of $2.02 per share.
Other stocks breaking out include medical products stock Lantheus Holdings, which rose nearly 4%. Shares broke out above a cup base with 73.88 entry. The relative strength line also is hitting a new high, which is a bullish sign. Lantheus develops diagnostic medical imaging products that screen for cardiovascular and other diseases.
The firm is expected to show 524% earnings growth in 2022 from the prior year, which is excellent. Earnings are also expected to continue higher in 2023, up another 19%.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
