Stocks opened mostly higher Wednesday, as key inflation data weighed on early trade. Software and chip stocks kicked higher, with Workday and ASML Holdings making strong early moves. Infosys and BlackRock climbed on earnings news. And on the Dow Jones today, JPMorgan lost ground after kicking off the Q3 reporting season for big banks.
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The Nasdaq Composite popped 0.6% in the stock market today, as Workday (WDAY) led the Nasdaq 100. The S&P 500 backed away from its early gain and slipped 0.2%. Meanwhile, the Dow Jones Industrial Average dipped narrowly below its breakeven line. The Nasdaq is moving to snap a three-day decline. The Dow and S&P 500 are angling toward their fourth-straight losses.
Workday stock rallied 4% after D.A. Davidson initiated coverage with a buy rating and a 300 price target. Workday shares are rising toward a 278.33 entry in a cup-with-handle base.
Qualcomm (QCOM) rallied 2%, helping to boost early trade among chip stocks. With shares down almost 27% from a January high, the company’s board of directors late Tuesday announced a $10 billion share buyback initiative.
ASML Holdings (ASML) jumped 2.6%. The iShares Semiconductor ETF (SOXX) added 0.4% in early action.
Among IBD 50 stocks, InMode (INMD) and TaskUs (TASK) and Upstart Holdings (UPST) flexed some early muscle, rising more than 5% apiece. Advanced Micro Devices (AMD) led among Leaderboard stocks, with a 3.2% gain.
Dow Jones Today: JPMorgan Earnings, Apple Cuts iPhone Output
Microsoft (MSFT) led the Dow Jones today, trading up 0.7% – just enough to boost shares back above their 50-day moving average. The IBD Leaderboard stock is climbing the right side of an eight-week flat base, with a buy point at 305.94.
JPMorgan (JPM) reversed premarket gains and shed 0.7%, as investors dug into its third-quarter earnings report. Earnings beat expectations, while a 1% revenue slip met analysts targets. CEO Jamie Dimon said the bank released credit reserves of $2.1 billion, reflecting confidence in a strengthening economy, and giving earnings per share a 52-cent boost.
JPMorgan shares had dropped back to test their 21-day exponential moving average, just above a cup-with-handle base buy point a 163.83.
Apple (AAPL) slumped 0.8% in opening trade. Bloomberg News reported the company plans to cut 2021 iPhone production goals of 90 million handsets by up to 10 million handsets due to extended chip shortages. Apple stock has become something of a bellwether for the market’s correction and attempted rally, pulling toward a fourth straight loss. Shares are a little more than 1% above their low from Oct. 4.
Inflation Data Rises; Oil Prices, Bond Yields, Bitcoin
The Labor Department’s Consumer Price Index rose 0.4% for September. That was above August’s 0.3% rise, and narrowly above forecasts for another 0.3% increase. Year over year, the CPI jumped 5.4%, vs. views for a 5.3% gain.
Minutes from the Federal Open Market Committee’s Sept. 22 meeting are set for release at 2 p.m. ET.
Oil prices dipped 1.1%, sending West Texas Intermediate futures below $80 a barrel. Bond yields swung up and down, with the 10-year Treasury yield hovering around 1.57%. Bitcoin slumped almost 4%, to below $55,000, after trading as high as $57,444 overnight, according to CoinDesk.
Earnings: Infosys, Delta Air, BlackRock
India-based software and systems engineer Infosys (INFY) jumped 4%, after beating fiscal second-quarter revenue expectations, and raising full-year revenue guidance. Premarket action suggested the stock could open trade Wednesday in a test of resistance at its 50-day line.
Delta Air Lines (DAL) was down 2.1% early, after scoring above-forecast third-quarter results, but the company warned that fuel costs could hurt fourth quarter profit.
BlackRock (BLK) jumped 3.1%. The asset manager reported strong third-quarter beats on its revenue and earnings lines, as well as a 21% increase in assets under management. BlackRock stock is attempting to rebound from support at its 200-day moving average.
Nasdaq, S&P 500 and Dow Jones Today
The market’s correction is now eight days old. And the Dow Jones today is tilting toward its sixth weekly close below its 10-week moving average. That is its longest sojourn below that line of support since the eight-week bear market dive at the start of the coronavirus pandemic. The Dow closed 3.5% off its Aug. 16 record, and 1.5% below its 50-day/10-week line on Tuesday. Which direction upcoming earnings will move the Dow, as well as the market’s other big benchmarks, remains to be seen.
The Nasdaq is in its third week below the 10-week level. A three-day decline left the index still well above the Oct. 4 low which initiated a rally attempt. That means the attempt is still in play and a follow through could occur at any time.
For more detailed analysis of the current stock market and its status, study the Big Picture.
However, the Nasdaq remains 2.7% below its 50-day level. Potential resistance at that technical level would pose a challenge to a new uptrend. The Nasdaq is 6.1% off its Sept. 7 record high.
The S&P 500 is 4.3% off its record high, and is also tacking toward its third weekly close below its 10-week line. At 1.9% below its 50-day moving average, it has a better chance than the Nasdaq to break resistance with a follow-through session.
This week’s action flashed several positive indicators amid the ongoing correction. For now, investors should remain patient, continue building watchlists, and monitor the Big Picture and Market Pulse for a shift in market status.
Please follow Alan R. Elliott on Twitter @IBD_Aelliott
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