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Dow Jones Rallies, Nasdaq Lags As Growth Stocks Pull Back; Tesla Falls After Earnings

The Dow Jones Industrial Average closed with a record high in today’s stock market. Meanwhile, the Nasdaq slipped. Dow leader Verizon (VZ) was the top blue chip after strong earnings.




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Stock Market Today

At the close, the tech-heavy Nasdaq composite was down less than 0.1%. The Dow Jones gained 0.4% and reached a record high. The S&P 500 rose 0.4%, while the Russell 2000 added 0.6%. Early data showed volume was running lower on the Nasdaq and higher on the NYSE vs. the same time on Tuesday.

Companies have been performing fairly well in the third quarter earnings season in light of unfavorable conditions. The majority of businesses across the board have been negatively affected by higher materials costs, labor shortages and widespread supply-chain problems.

Utility, health care and real estate, considered defensive sectors, were among those leading the upside. This shows a turnaround for health care stocks, which have been underperforming in recent weeks. Technology stocks lagged in Wednesday’s market.

Meanwhile, the benchmark 10-year Treasury yield rose ever so slightly above 1.6% on Wednesday and settled around 1.63%. Growth stocks, which have recently been hindered by the rising yields, continued to underperform the major indexes. The growth-focused Innovator IBD 50 ETF (FFTY) fell 0.5%.

Stocks To Watch: Tesla Earnings

Tesla (TSLA), a member of the IBD Leaderboard list of leading growth stocks, closed slightly higher after paring an earlier loss. Shares fell slightly after the close following the company’s earnings report.

Tesla reported adjusted earnings of $1.86 a share, above estimates for $1.62 a share. Sales of $13.76 billion beat views for $13.63 billion per Refinitiv. The stock closed 4% away from a new 900.50 cup-based entry.

Elsewhere, stocks scoring breakouts included banks Citizens Financial Group (CFG) and KeyCorp (KEY).

KeyCorp traded right at the buy zone after breaking out above the 23.74 cup-base entry. The breakout occurred in slightly heavier-than-normal volume, a bullish sign. The company, which has over 1,000 bank locations across 15 states, is set to report Q3 earnings early Thursday.

Meanwhile, Citizens Financial broke out above a 49.76 cup-with-handle buy point. The company released its earnings early Wednesday, which sent the stock 3.6% higher. The firm has reported double- and triple-digit EPS growth in its most recent quarters. But revenue growth has been declining on a year-over-year basis for several quarters. Bank stocks continue to benefit as yields rise.

Dow Jones Winners And Losers

In the Dow Jones industrials, Verizon rose more than 2% in heavy volume. Investors responded positively to the wireless provider’s earnings, which beat estimates. But revenue missed. This was offset by an increase in its full-year guidance and promising growth in 5G adoption.

Meanwhile, tech giant Microsoft (MSFT), which broke out into a buy zone Monday, traded down 0.3%. Shares remain inside the buy zone from a 305.94 flat-base entry. The breakout appeared strong as the stock’s RS line reached a new high, according to MarketSmith analysis.

Microsoft is set to report Q1 earnings on Tuesday after the market closes.

Follow Rachel Fox on Twitter at @rachelgfox more Dow Jones and stock market commentary.

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