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The Dow Jones Industrial Average climbed more than 150 points before reversing lower, but Dow Jones leader Nike soared 11% on earnings. Tech giant Apple slid on an analyst downgrade, while Tesla dived 9% after its Battery Day event. Stitch Fix tumbled 15% on Stocks on the move include Tesla (TSLA). Tesla stock dived more than 9% after its Battery Day event.
Among companies reporting earnings, KB Home (KBH) and Stitch Fix (SFIX) reported earnings results late Tuesday. KB Home fell 6%, while Stitch Fix tumbled 15%.
Dow Jones Today
Early Wednesday, the Dow Jones Industrial Average turned down 0.5% after giving up solid gains, while the S&P 500 moved down 0.9%. The Nasdaq composite slipped 1.4% in morning trade.
Among exchange traded funds, Innovator IBD 50 (FFTY) traded down 0.8% Wednesday morning. The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF fell 1.5%. Meanwhile, the SPDR S&P 500 ETF (SPY) lost 0.8%.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 22.2% for the year through Tuesday’s close. Meanwhile, the S&P 500 is up 2.6%, while the Dow is down 4.4% year to date, through the Sept. 22 close.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 7.09 million on Wednesday. Total virus-related deaths topped 205,000.
The cumulative total of Covid-19 cases confirmed since the start of the outbreak worldwide topped 31.8 million Wednesday, with more than 976,000 virus-related deaths.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the coronavirus stock market rally is seeing strong selling pressure after rebounding from lows six months ago, on March 23. The major stock indexes confirmed the rebound as a new uptrend on April 2. That uptrend is currently under pressure.
Tuesday’s Big Picture reported that, “A follow-through day helps determine if the stock market, after a terrible spill, is ready to rumble higher. And it comes a minimum four days into a new rally attempt. Similarly, it’s going to take more evidence that institutional-class money managers are serious about putting more capital to work during a month that’s famous for sharp declines and higher volatility.”
After Tuesday’s rally, the Nasdaq is about 9% off its all-time high.
Amid ambiguous general market conditions, investors should be more focused on locking in profits and cutting losses short. Another way to reduce risk is to move off margin. Be careful with new buys. The increased risk in the market should give you pause.
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance.
Dow Jones News: Nike Earnings
According to IBD Stock Checkup, Nike stock shows a solid 86 out of a best-possible 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors quickly gauge a stock’s strengths.
Tesla Battery Day
Early Wednesday, Tesla stock dived more than 9% after the company’s Battery Day event. The company unveiled a new tabless battery design that will increase a battery’s range. But new advances remain a distant objective. “About 3 years from now, we’re confident we can make a very compelling $25,000 electric vehicle that’s also fully autonomous,” Musk said.
During the company’s annual shareholders meeting, Musk said the future “looks very promising” for an annual profit.
Stock Market Earnings: KB Home, Stitch Fix
KB Home blew away fiscal Q3 earnings forecasts after the market close as homebuilders strive to meet demand for affordable housing amid a shortage of building lots. KB Home earnings per share came in at 83 cents on revenue of $999 million.
The stock fell 6% in morning trade, and is falling below a 38.60 entry in a cup with handle.
Stitch Fix reported mixed fiscal Q4 results. The company missed earnings targets, but exceeded revenue estimates. The stock dived 15% early Wednesday.
On Tuesday, shares staged a breakout above a 29.86 buy point in a cup with handle, according to MarketSmith chart analysis. Shares triggered the 7%-8% loss-cutting sell rule.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple fell nearly 2% Wednesday morning after UBS downgraded the stock from buy to neutral. Apple shares are trying to regain their 50-day line after last week’s sharp break, according to MarketSmith chart analysis.
Apple stock is about 55% above a 72.15 buy point in a cup-with-handle base. The blue-chip giant is the No. 2-performing Dow Jones stock for 2020, with a 52.3% advance through Tuesday’s close. Recent Dow Jones 30 addition Salesforce.com (CRM) is the top performer with a 52.4% year-to-date advance.
Software leader Microsoft lost 1.5% Wednesday, on pace to extend a win streak to three sessions. The stock will again try to bypass resistance around its 50-day line.
On Sept. 8, shares closed below their 50-day support level for the first time since the May 5 breakout above a cup-with-handle’s 180.10 buy point.