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Dow Jones Regains Another 286 Points After Monday Sell-Off; Netflix Stock, Coca-Cola Move On Earnings

The Dow Jones Industrial Average rebounded further in today’s stock market after an intense sell-off Monday that cost the index nearly 900 points. The S&P 500 and the Nasdaq composite also continued to rebound in Wednesday’s market.




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A resurgence in Covid-19 cases in many highly vaccinated countries triggered major losses earlier this week. But so far, a rally on Tuesday and Wednesday has recovered much of those losses.

Of the 11 S&P 500 sectors, most traded positively, with energy and financials outperforming. Meanwhile, consumer staples and utilities lagged.

The 10-year U.S. Treasury bond yield, which continues to be an important data point amid the economic recovery, hit a low of 1.13% early Tuesday. But the yield rebounded on Wednesday to 1.28% as money continued flowing from bonds to stocks. The bond market continues to fluctuate between its recent March high of 1.76% and lows around 1.13%. Both inflation and Covid worries are key movers for the bond market.

Dow Jones Today: Blue Chips Itching To Break Out

At the close, the Nasdaq held a gain of 0.9%. Meanwhile, the S&P 500 climbed 0.8%. The Dow Jones industrials rose 0.8%, or 286 points. The small-cap Russell 2000 index jumped 1.8%, leading the upside. Volume was lower on both the NYSE and Nasdaq vs. the close on Tuesday, according to early data.

Stocks outperforming in the Dow Jones on Wednesday included Boeing (BA), which gained 2.5% in afternoon trading. Shares are trying to break a recent downtrend and have risen back above the 200-day line. But the stock is still below the 50-day moving average.

Chevron (CVX) also was a top gainer, rising more than 3% on Wednesday. The stock is rebounding with the rest of the energy sector from the recent 18% correction that occurred over the past few weeks.

Additionally, shares of McDonald’s (MCD) rose 0.7% and are trading near a new buy point following Tuesday’s market rally. McDonald’s is trading just below a 238.28 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares pared an earlier gain of over 1% in today’s market. But the stock reclaimed its key 50-day moving average during Tuesday’s rebound.

Multiple Dow Jones stocks reported earnings early Wednesday, including Verizon (VZ), which rallied sharply after the company beat the Street’s earnings and sales targets. But VZ finished near session lows or a 0.7% gain after the stock hit upside resistance at its 50-day moving average.

Elsewhere, Dow Jones stock Coca-Cola (KO) reported Q2 earnings and sales results early Wednesday that beat expectations. The stock rose 2% in morning trade before pulling back some.

Coke finished just beneath a 56.58 buy point in its own six-week flat base.

Johnson & Johnson (JNJ) gained 0.6% Wednesday following strong Q2 results early Wednesday. The stock remains 2% away from a cup-with-handle’s 172.84 buy point.


After Hours: 3 Key Earnings Movers; Six New Buys After Broad Rally


Growth Stocks To Watch

The Innovator IBD 50 ETF (FFTY) gained roughly 2.3% on Wednesday as shares have now regained support at their 200-day moving average and are attempting to retake the 50-day line as well. Shares have had a powerful week, rising over 5% thus far. Stocks leading the upside in the index on Wednesday included Global-E Online (GLBE) (up 5% on Wednesday) and Cricut (CRCT) (up 14% for the week).

Leaderboard stock BioNTech (BNTX) and Morgan Stanley (MS), another blue chip stock, both broke out and traded inside key buy zones.

Covid vaccine maker BioNTech rose more than 5% and traded above a six-week consolidation, according to MarketSmith analysis. The proper entry point on this narrow, fourt-stage consolidation is 252.88. After a pullback in recent weeks, shares found strong support at the 50-day line and have just notched a six-session win streak.

BioNTech is currently a half position on Leaderboard.

Morgan Stanley broke past a six-week flat base with a 94.37 prime entry point on Wednesday. Shares also gained support at their 50-day line earlier this week. The stock’s relative strength line has also ticked up in recent weeks and maintains an RS Rating of 88.

Finally, earnings mover Netflix (NFLX) dropped 3% after the firm posted disappointing earnings late Tuesday. Shares broke below both their 50-day and 200-day moving averages. Netflix is still on track to build a double-bottom base with a 563.66 buy point.

On Friday, IBD downgraded its market outlook to “uptrend under pressure.” This means that investors should be more conservative when initiating stock positions. Also, consider taking profits where possible and be extra picky about taking on more risk at this time.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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