Stock market indexes erased early losses and traded higher Wednesday afternoon, despite mixed earnings reports and lackluster home sales. Netflix led on a lower-than-expected Q2 subscriber loss.
The Nasdaq composite outperformed other benchmarks, up 1.8% in afternoon trading. The Dow Jones Industrial Average traded 0.3% higher while the S&P 500 was up 0.9%. The small-cap Russell 2000 index climbed 1.5%.
Volume was higher on the Nasdaq but lower on the NYSE, as compared to Tuesday.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones Jones | (0DJIA) | 31916.30 | +89.25 | +0.28 |
| S&P 500 | (0S&P5) | 3970.53 | +33.84 | +0.86 |
| Nasdaq | (0NDQC ) | 11929.00 | +215.85 | +1.84 |
| Russell 2000 | 181.29 | +2.60 | +1.46 | |
| IBD 50 | 27.31 | +0.03 | +0.11 | |
Last Update: 12:10 PM ET 7/20/2022 |
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June sales of existing homes fell 5.4% from May levels to 5.12 million, missing estimates for an annual rate of 5.38 million. The median price of existing homes rose 13% from a year ago to $416,000 in June.
"The housing market is still processing the new regime of higher borrowing costs, high inflation, and weakening consumer demand," said Jeffrey Roach, chief economist for LPL Financial. "Although the outlook is bleak, a vast majority of existing homes sold in June were on the market for less than a month. Given the time required for residential real estate markets to adjust, we may see this housing slowdown phase continue throughout the rest of this year."
Netflix Earnings Lift Stock Market
Mortgage applications fell sharply in the week ending July 15, increasing concerns that high rates are impacting housing sales.
The 10-year U.S. Treasury yield was flat at 3.04% while WTI crude oil reversed down to near $102 a barrel, dropping 1.4%.
Netflix rallied nearly 5% on Wednesday after beating Wall Street earnings estimates but coming up short on revenue. More importantly, Netflix reported a better-than-feared subscriber total for the second quarter. The Los Gatos, Calif.-based company lost 970,000 subscribers in the June quarter. Three months ago, Netflix predicted it would lose 2 million subscribers in the second quarter, in reaction to price hikes and heightened competition.
Roku and Walt Disney rose in sympathy with Netflix, gaining 7.5% and 4.2%, respectively.
Semiconductor equipment maker ASML beat analyst estimates for the second quarter but lowered Q3 and full-year guidance. ASML stock rose 2.5% in afternoon trading.
Abbott Laboratories beat earnings and sales estimates this morning but shares fell almost 2%. Abbott's bullish guidance tells us that Covid is still adding to quarterly results. Through June, the company has tacked on $5.6 billion in Covid testing sales. It expects $6.1 billion in full-year sales from those products, up from prior expectations for $4.5 billion.
Even so, the Covid impact is declining, with Evercore ISI analyst Vijay Kumar noting the "Covid guide seems de-risked and assumes only about $500 million of contribution in the second half, to hit the $6.1 billion (guidance)."
Rally Gains Steam, But Still Missing This; Tesla Leads Earnings Movers
Baker Hughes And Biogen Trade Lower After Earnings
Egg producer Cal-Maine Foods gained 1.4% in today's stock market after reporting earnings and sales that beat FactSet estimates. The shares continued to build on a consolidation base with a buy point of 60.05.
Oil driller Baker Hughes missed top and bottom-line estimates despite the recent rapid rise in energy prices. The stock fell 10%, further below the sell signal, when it lost support on its 50-day line. And on Wednesday, it tripped another sell signal by falling 8% below its earlier 27.76 buy point, which it established last October, long before Russia invaded Ukraine.
Nasdaq-100 component Biogen traded lower by 2.6% despite beating second-quarter expectations and raising fiscal year guidance. The company had reported earnings shortfalls in three of the last four quarters.
Tesla reports second-quarter earnings after the closing bell, with analysts looking for a profit of $1.81 per share. Market watchers worry the EV maker will post a material decline in earnings-per-share (EPS) due to the Shanghai shutdowns and ramp-up of new production facilities in Texas and Berlin.
American Airlines is building on four days of gains in advance of Thursday's earnings release. Analysts surveyed by FactSet expect American to earn 71 cents per share on sales of $13.02 billion in the second quarter.
Follow Michael Molinski on Twitter @IMmolinski
