The stock market improved in the past hour of trading Wednesday to creep up near the highs of the day, with the Nasdaq outperforming the other major indexes. Investors await Nvidia's highly anticipated quarterly earnings report today after the market close.
The Nasdaq gained 1.8% in midday stock market action. The Dow Jones Industrial Average added 0.7%. The S&P 500 rose 1.2%. The small-cap Russell 2000 advanced 1.1%.
All three major indexes remain below their 50-day moving averages. The Nasdaq tested its 21-day exponential moving average.
The Nasdaq 100-tracking Invesco QQQ Trust ETF rose 1.7%. And the Innovator IBD 50 ETF edged higher 1.6%.
Volume rose on the NYSE but fell on the Nasdaq vs. the same time on Tuesday.
The benchmark 10-year Treasury yield fell 13 basis points to 4.2%.
The August S&P Global PMI composite index of 50.4 showed modest expansion in private-sector output. Meanwhile, the manufacturing index fell to 47.0 vs. the 48.8 consensus, down from July's 49.0 reading, signifying weakness in the sector.
The August services index fell to 51.0 vs. the 52.0 expected, and lagged July's 52.3, also indicating a slowdown.
The Commerce Department reported that July new-home sales increased to a 714,000 annual rate vs. the expected 705,000 and higher than June's 697,000.
Stock Market Action: The Pressure Is On For Nvidia
Nvidia shares rose 2.4% ahead of the company's earnings report today after the market close. The pressure is on for a strong report as anticipation builds for the company's results, guidance and CEO's comments, especially on the company's AI front.
The report is seen as a bellwether for other tech stocks and the Nasdaq overall, as it affects other chipmakers, software companies and Big Tech stocks.
Nvidia stock received several price-target lifts earlier in the week, pushing it to an all-time high in Tuesday's stock market action.
IBD 50 stock XP spiked 4.8% after JPMorgan Chase raised its price target to 27 from 18.50 and maintained its neutral rating on the stock.
Shares are above a 10% buy zone from a 10-week-line bounce entry at 24.48. The stock is flirting with its 52-week high of 27.67, set on July 25.
The Brazilian financial services provider was Tuesday's IBD 50 Stocks To Watch pick.
Netflix popped 4.8% after the company reported about 2.6 million gross additional users in July, according to Reuters.
The streaming entertainment provider reclaimed its 10-week moving average and was the biggest gainer in the S&P 500 Wednesday. Shares traded tightly and formed two recent three-weeks-tight patterns before last week's pullback.
Futures: Booming Nvidia Earnings Lift AI Stocks As Market Rally Eyes This
Retail Stocks Show Mixed Results
Abercrombie & Fitch stock gapped up over 22% in huge volume, after the teen apparel retailer handily beat Q2 adjusted EPS and sales views and raised full-year revenue guidance. The company also reported a 30% drop in inventories over last year.
The stock is extended from a cup base with a 31.69 buy point.
Shares of Foot Locker plunged more than 29% following the footwear retailer's miss on second-quarter sales and 9.4% same-store sales drop. The company lowered its full-year earnings, sales and gross margin guidance. The company also reported an 11% increase in inventories while suspending its dividend. The stock is on track for its largest one-day percentage drop on record.
Athletic apparel and footwear stock Nike fell 2.6% in sympathy with Foot Locker after that company lowered guidance.
Nike stock is on pace for its 10th straight down day and the longest losing streak on record. NKE is the worst performer in the Dow Jones today.
Youth apparel retail stock Urban Outfitters jumped 2.1% after the company reported a beat on second-quarter sales and profit expectations and an inventory drop. Shares retook the 50-day line on the move.
Other Movers: Peloton Crashes
Peloton Interactive plummeted 23% in heavy volume, after the home fitness company reported a larger fourth-quarter loss than expected and a lower number of subscribers. Management gave first-quarter sales guidance below analysts' estimates. A seat recall tallying $40 million is eating into the company's bottom line.
Analog Devices reversed course and is now up 1.1% after the chipmaker missed fiscal third-quarter profit and sales numbers and gave current-quarter EPS and sales guidance below analysts' estimates.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
