The stock market reduced losses at midday. Netflix and a few others continued a trend of generally positive earnings reports.
The Nasdaq composite pared its decline to 0.4% while the S&P 500 shed 0.3%. The Dow Jones Industrial Average was flat. The small-cap Russell 2000 had a harder time, down 1.3%.
Volume fell on the Nasdaq and NYSE compared with the same time on Tuesday.
The Innovator IBD 50 ETF reversed higher at midday, with a 0.3% gain. Aehr Test Systems is almost at the 19.53 buy point of a cup base.
The yield on the 10-year Treasury rose 10 basis points to 4.10%. It is growing more comfortable with support at the psychological 4% level.
Today's losses follow Tuesday's frustrating session, in which the air leaked out after a booming start for the major indexes. The Nasdaq pared a nearly 3% gain to less than 1%.
Still, the stock market is working on a rally attempt, so index action bears close attention this week.
IBD Leaderboard stock Cardinal Health rose above the 71.22 buy point of a shallow cup with handle, but volume was low.
Earnings Bright Spots: Netflix, ASML
Netflix jumped after the video streaming service topped quarterly earnings expectations and added 2.4 million subscribers. That's more than double what analysts and the company had forecast after two straight quarters of subscriber declines.
The stock rallied more than 14% and rose above the 252.09 buy point of a flat base that's formed within a much deeper, nearly yearlong correction. The stock is now testing the 200-day line. Remember, the stock market correction means new buys should be avoided.
Chip equipment maker ASML extended gains to nearly 7% after Q3 results beat analysts' estimates. The firm gave cautious guidance, but investors still applauded the report. ASML shares are trying to rebound off a nearly two-year low.
Dow component Procter & Gamble was up 2.3% at midday despite mixed September-quarter results. Earnings and sales topped views. But the consumer products giant warned that a strong dollar will hurt results and cut its fiscal-year revenue guidance.
Intuitive Surgical gapped above its 50-day line on a good third-quarter report. Earnings and sales were above views. The robotic surgical equipment maker saw a 20% rise in procedures. The stock is having its best day since March 24, 2020.
But Ally Financial slid to a two-year low after the consumer lender missed profit and revenue estimates. Shares trimmed losses to 4% at midday.
Also in financials, M&T Bank gapped down about 12%, setting back a basing effort. It's on pace for the largest decrease since March 9, 2020, according to Dow Jones Market Data. M&T missed revenue and profit estimates.
Tesla, IBM and Alcoa report earnings after Wednesday's closing bell.
Housing Starts Demolished
Economic data also dampened the stock market Wednesday. Housing starts tumbled 8.1% in September from the previous month. It marked a big slowdown from a 13.7% August increase and below forecasts of a 6.7% decline, according to FactSet.
Building permits climbed to 1.564 million from 1.542 million the previous month, and above estimates of 1.530 million.
BMO Capital Markets economist Priscilla Thiagamoorthy said the rise in permits probably wasn't because of confidence in the housing market. On Tuesday, homebuilder sentiment fell to the lowest level since 2012, excluding a brief drop at the start of the pandemic.
"Looking ahead, weaker construction is likely amid stirring underlying price pressures, a cloudy economic outlook and mortgage rates that are looking to blow well past the 7% mark — the highest in two decades," she added. "Homebuilders continue to face major headwinds, including hot inflation, worker shortages, slowing economic growth and weaker housing demand."
Finally, stock market traders will be watching the 1 p.m. ET release of the Federal Reserve's Beige Book survey of economic conditions.
