Stocks jumped into healthy gains Wednesday as the stock market set sights on a quick snapback after Tuesday's one-day pause in the rally. Tesla (TSLA) and China-based JD.com (JD) ran at the head of the Nasdaq 100. Netflix (NFLX) sagged despite a powerful Q4 performance. And IBM (IBM) set the pace on teh S&P 500 and the Dow Jones today.
XThe Nasdaq popped 0.6% at the starting bell. The S&P 500 climbed 0.4%. The Dow Jones industrials also muscled up to a 0.4% gain on the stock market today, even as Johnson & Johnson (JNJ) and Boeing (BA) weighed heavy on early trade.
Tesla led the early Nasdaq action on an analyst upgrade. IBM rose on earnings. Netflix dropped 1.6%, despite a pair of analyst price-target hikes following its Q4 earnings report. Johnson & Johnson dragged to the bottom of the Dow on earnings news. Boeing traded 1.2% lower, after tumbling on Tuesday to a 52-week low on the latest 737 Max setback.
CapitalOne (COF), Abbot Laboratories (ABT) and IBD Leaderboard stock ASML Holdings also rose on earnings. Fortinet (FTNT) jumped 2% on an analyst upgrade. Eaton (ETN) moved nearly 4% higher, leading the S&P 500, after acing a $3.3 billion deal to sell its hydraulics business.
JD.com (JD) also traded high on the Nasdaq 100, up 2.6%, after DZ Bank initiated coverage with a buy rating and a 47 price target. A handful of China-based stocks rebounded after coronavirus fears tested the resilience of China stocks trading in the U.S. on Tuesday. Weibo (WB) and iQiyi (IQ) each jumped 1.5% and 4.5%, respectively. Alibaba Group Holdings (BABA) climbed 1.1%, after pulling back 2.3% on Tuesday.
Massachusetts-based biotech Moderna (MRNA) spiked 12%. The company told CNBC on Tuesday it was working with the National Institutes of Health (NIH) and other government agencies to develop a vaccine targeting the current coronavirus strain.
After Wednesday's close, Kinder Morgan (KMI), Steel Dynamics (STLD), Texas Instruments (TXN), Citrix Systems (CTXS) and Raymond James (RJF) report earnings.
Gear up for Wednesday's market action by reading IBD's Investing Action Plan.
Netflix Earnings
Netflix shares opened down 2.4%. The company reported late Tuesday earnings up 333% in the fourth quarter, better than double the number forecast by analysts. The Los Gatos, Calif.-based outfit added 8.76 million new streaming subscribers in the quarter, Wall Street was looking for 7.8 million.
Netflix stock has been swinging over and under a 338.10 buy point from a cup-with-handle base since early in January. The relative strength line for Netflix stock is still well off consolidation or all-time highs.
Dow Jones Today: IBM Earnings
IBM soared 4% to the head of the Dow, after reporting a top- and bottom-line beat in its fourth-quarter results late Tuesday. Earnings declined 3%, and revenue was flat, snapping a five-quarter decline.
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Johnson & Johnson dropped 1.7% to the bottom of the Dow, after turning in mixed results for its fourth quarter. Earnings slipped 5%, slightly less than expected. Revenue gained 2%, stopping just short of the consensus target. J&J stock is in the midst of a five-month rally, up 2.3% so far in January, at Tuesday's close.
Leaderboard Movers: Tesla, XP, ASML Holding
Tesla swept 3.5% higher, as Wedbush raised the stock's price target to 550 from 370. Tesla stock opened comfortably above 550, which boosted the company above the $100 billion market capitalization hurdle for the first time.
Brazil-based XP (XP) vaulted 3.3%, jumping past a 40.60 buy point in an IPO base. Shares are up 52% from their December initial offering price.
Netherlands-based ASML Holding inched up 0.5% after fourth-quarter sales outran analyst estimates. Earnings were roughly in line with the consensus target, whereas the company also announced a 14% dividend increase and a $6.65 billion share buyback initiative. ASML is extended after a rebound from its 10-week moving average in December.
China's Markets Rebound, Coronavirus Lands In U.S.
China's markets bounced back following Tuesday's shakeup on news that the country was working to contain a pernicious virus outbreak. The illness is in the same coronavirus species as the Severe Acute Respiratory Syndrome (SARS) that infected more than 8,000, killed 774 people, and rattled China 17 years ago. The current illness, which is new and being called 2019-nCoV, causes pneumonia and had led to the deaths of nine persons as of Wednesday morning.
The U.S. Centers for Disease Control and Prevention confirmed on Tuesday the virus had entered the U.S., via a Washington state resident returning from a visit to Wuhan, China. Wuhan is effectively under quarantine. In Asia, Macau confirmed its first case Wednesday, following reported infected patients in Thailand, Japan, South Korea and Taiwan, according to the Wall Street Journal.
The outbreak is occurring just ahead of the country's week-long Lunar New Year celebration, set to begin on Friday. China's Ministry of Transport estimates that 400 million people will be on the move during the celebration, making a total of 3 billion trips during this period, according to the Washington Post.
China's stock market traditionally shifts lower in the week preceding the Lunar New Year celebration, as investors draw cash out of the market.
Dow Jones Today: Intel, Merck In Buy Zones Ahead Of Earnings
Among the other Dow Jones stocks due to report, Intel (INTC), Merck (MRK), Procter & Gamble (PG) and Travelers (TRV) all have reports scheduled for Thursday. American Express (AXP) delivers its results on Friday.
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