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Stock Market Higher As Earnings Take Spotlight; IBM, Tesla On Deck

The stock market rose Wednesday morning as it digested earnings reports and prepared for more announcements. The Nasdaq composite lagged.




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After several days of gains, the stock market Wednesday may be settling itself down. At this point, it would be good for the market to pace itself, or it may risk getting overextended.

The S&P 500 is close to a new high and added 0.4%.

The Nasdaq climbed off a minor loss and gained 0.3. While most of its major components were quiet, Netflix (NFLX) slid nearly 3% after a mixed third-quarter report.

The Dow Jones Industrial Average rose 0.5%. Verizon (VZ) beat adjusted earnings but revenue missed estimates. Verizon added more postpaid wireless phone subscribers than expected, and the stock climbed early Wednesday.

The Russell 2000 has been erratic today and traded 0.4% higher around 10:40 a.m. ET.

Volume fell on the NYSE and Nasdaq compared with the same time on Tuesday.

Defensive Sectors Lead Stock Market

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35581.15 +123.84 +0.35
S&P 500 (0S&P5) 4533.85 +14.22 +0.31
Nasdaq (0NDQC ) 15144.74 +15.65 +0.10
Russell 2000 (IWM) 226.64 +0.77 +0.34
IBD 50 (FFTY) 49.60 -0.08 -0.16
Last Update: 10:18 AM ET 10/20/2021

S&P sectors that could be deemed defensive — health care, utilities, consumer staples and real estate — led the stock market. The Energy Select Sector SPDR (XLE) fell 1% early, but pared its loss to 0.3%. The price of U.S. crude oil fell 1% to $82.12 a barrel.

Up to now, earnings reports have been mostly satisfactory, despite higher material costs, labor shortages and widespread supply-chain problems.

But the semiconductor sector dipped after chip-equipment maker ASML (ASML) early Wednesday beat profit estimates but missed third-quarter sales views. Its revenue guidance was light.

ASML shares stumbled nearly 4% just as the stock was trying to climb back above the 50-day moving average.

VanEck Semiconductor ETF (SMH) eased 0.3% and held above the 50-day line, which it won back Tuesday.

Stock Market Faces More Earnings Reports

More earnings reports are coming in today, including some bellwether companies.

IBM (IBM) will report after the close. IBM’s chart is forming a cup with handle base with a 146.10 buy point. That leaves the stock ripe for a breakout with a potential spark in today’s results. Shares of Big Blue eased 0.6%.

Tesla (TSLA) will report after today’s close. The stock is extended.

Innovator IBD 50 ETF (FFTY) was up only 0.1% as it pared gains.

Dutch Bros (BROS) reversed lower and is now below the 62.10 buy point of Tuesday’s breakout. The coffee chain was discussed in IBD 50 Stocks to Watch. For now, there’s no sell signal, only disappointment for investors.

Keep an eye on Williams-Sonoma (WSM). The home furnishings retailer is forming a double bottom base with a 195.19 buy point.

Novavax Plunges; Beige Book On Deck

Outside the IBD 50, Novavax (NVAX) plummeted 17% after reports said quality control issues are hurting the company’s efforts to develop a Covid-19 vaccine. The stock already had gapped below its 200-day moving average on Oct. 1, adding to a depressed chart.

The Federal Reserve’s Beige Book, a survey of economic conditions across the nation, is due out at 2:30 p.m. ET.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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