Stocks battled to hold modest gains Tuesday, as Travelers (TRV) and McDonald's stock dragged on the Dow Jones today following a disappointing third-quarter report. Procter & Gamble (PG), and United Technologies (UTX) topped expectations, while Walt Disney (DIS) and Boeing (BA) powered higher in opening trade. A spiking Biogen (BIIB) ran to the top of the Nasdaq 100 and S&P 500.
XThe Nasdaq was up 0.3%, the S&P 500 fought to maintain its 0.2% advance. The Dow battled its way to a fractional gain.
Among the Dow Jones industrials, Procter & Gamble muscled up nearly 4% after reporting solid fiscal first-quarter beats on both its earnings and revenue lines. Aerospace giant United Technologies eased off a starting bell breakout as it edged up 0.8%, as mixed guidance moderated its strong third-quarter results.
Defense and aerospace factored heavily into premarket trade beyond United Technologies, as Lockheed Martin (LMT) dipped 0.3% lower after its third-quarter report, and Boeing (BA) jumped 2.2% — ahead of its Q3 report due out on Wednesday.
Walt Disney (DIS) vaulted almost 2%, Netflix (NFLX) tumbled 3.5%. Verizon agreed to give its viewers a free year of Disney+ streaming entertainment. Netflix also announced the sale of $2 billion in high yield debt.
Dow Jones stock Travelers (TRV) slunk more than 7% lower as its third-quarter earnings missed expectations by a wide margin, due to "an increasingly challenging tort environment." McDonald's gave up more than 3%.
Biogen erupted, spiking 37% after its third-quarter report announced the company's would reintroduce a potential Alzheimer's treatment. Earnings reports late Monday sent Cadence Systems (CDNS) gained 1.6%, TD Ameritrade (TD) rallied 2.6%, after earnings reports.
Harley Davidson (HOG) goosed the throttle, up more than 4% after its third-quarter earnings dropped less and revenue rose more than expected.
UPS, Hasbro Tumble; Stamps.com Soars
Outside of the earnings picture, Bristol-Myers Squibb (BMY) popped more than 6%, on positive clinical trial results by CheckMate-9LA as a possible a lung cancer treatment. Bristol-Myers has gained in 10 of the past 13 weeks, rising 18% from a July low.
On the downside, IBD 50 stock New Oriental Education & Technology reversed sharply, diving more than 3%, despite reporting a strong third quarter. The slip hauled shares back below a flat base buy point at 115.98.
United Parcel Service (UPS) dumped 4% as the delivery leader's revenue growth stopped short of estimates, and announcing the retirement of the company's chief operating officer, who was also expected to take over the chief executive role. At the same time, Stamps.com (STMP) rocketed 24% higher, after announcing a partnership that gives its customers discounted shipping rates through UPS.
Hasbro (HAS) collapsed into a 13% slide. The toy and game maker reported wide misses in both earnings and revenue for its third quarter.
United Technologies, McDonald's Stock
United Technologies jumped 2%, then trimmed its gain to less tahn 1%, despite earnings unexpectedly accelerating in the third quarter. The gain scored a brief breakout above a cup-with-handle buy point at 139.50.
McDonald's slumped 2.9% as weak same-store-sales numbers dragged on its U.S. results. U.S. same-store sales gained 4.8% during the quarter, vs. expectations for a 5.2% gain. That contributed to a shortfall in third-quarter earnings growth, leaving results short of analyst expectations.
The slump, if it carries over into regular trade, shows McDonald's stock remains unable to beat resistance at its 50-day moving average. Shares have been trading below that line since Sept. 10.
Biogen Back In The Alzheimer's Game
Biogen blasted 35% higher after reporting a 25% gain in earnings and a 5% revenue increase for its third quarter. Revenue topped analyst targets, but earnings soared above expectations. The company said it was preparing to launch its Vumerity multiple sclerosis treatment. It also plans to pursue regulatory approval for its aducanumab as an Alzheimer's treatment after positive trial results.
Biogen shares had collapsed 34% in March. At that time, the company announced it would end its development of aducanumab as an Alzheimer's treatment. That was due to findings from an independent monitoring committee. Tuesday's early gains poised the stock to take back a large share of that March selloff.
Dow Jones Today: Earnings Onslaught
The question with the Dow Jones today, as well as the Nasdaq and S&P 500, is whether the indexes can break free of the one-day-up, one-day-down mode that has dictated trade for the past seven sessions. The Nasdaq continues to work on a possible fourth straight weekly gain, the S&P 500 chipping away at its third up week. The Dow industrials, meanwhile, have dropped in four of five of the past weeks.
For the month, so far, the Dow is down 0.3%, while the S&P 500 has climbed 1% and the Nasdaq has knocked out a 2% gain. That has kept the stock market's confirmed uptrend intact, despite a rise in distribution days. And the Dow still has plenty of earnings season fodder ahead for potential gains — or losses. After reports from McDonald's, Travelers, United Technologies and Procter & Gamble today, Boeing (BA), Microsoft (MSFT) and Caterpillar (CAT) report on Wednesday, Visa (V) on Thursday and Verizon (VZ) on Friday.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Europe Markets Up Ahead Of Brexit Vote
Markets across Asia gained on Tuesday. The Shanghai Composite ticked up 0.5% and Hong Kong's Hang Seng Index added 0.2%. Europe's markets were positive as Britain awaited two key votes on Prime Minister Boris Johnson's Brexit plan. That was set to begin around 2 p.m. ET. London's FTSE 100 traded up 0.3%, while Frankfurt's DAX held a 0.2% gain. The CAC-40 in Paris struggled to remain positive just after midday.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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