Nasdaq Index, Dow Jones, S&P 500 News: Wall Street Mixed Ahead of Netflix (NFLX) Earnings

Key Points

• Dow Jones dips after reaching 38,000 points.
• 3M and GE face stock declines on weak guidance.
• United Airlines shines, but Boeing grounding looms.
• Market eyes GDP and price index data.
• Short-term forecast leans cautiously bullish.

Market Highlights

In today’s trading session, the Dow Jones Industrial Average experienced a minor setback following its remarkable surge above 38,000 points the previous day.

The 30-stock benchmark index faced some headwinds as 3M, a key component, recorded a significant 6% decline, largely attributed to disappointing quarterly guidance.

Additionally, General Electric (GE) saw its stock price drop by 1%, contributing to the market’s cautious sentiment. Meanwhile the benchmark S&P 500 and the tech-weighted Nasdaq are higher shortly after the opening.

At 14:54 GMT, the Dow Jones Industrial Average is trading 37922.76, down 79.05 or -0.21%. The S&P 500 Index is at 4854.31, up 3.88 or +0.08% and the Nasdaq-100 Index is trading 15384.13, up 24.04 or +0.16%.

Early Volatility and Earnings Performance

Anticipation is high as Netflix prepares to announce its earnings after the closing bell, boosted by the recent deal to stream WWE’s flagship Raw program. Conversely, 3M’s stock dropped 6% due to disappointing quarterly guidance, with estimated earnings per share falling below expectations.

Johnson & Johnson reported earnings slightly exceeding expectations, with adjusted earnings per share at $2.29 and revenue at $21.4 billion, while Procter & Gamble had an earnings beat but missed revenue estimates with $1.84 per share and $21.44 billion, respectively. Earnings results present a mixed bag for investors.

Airline Stocks Take Flight Despite Challenges

United Airlines emerged as a bright spot in the market today, reporting robust fourth-quarter results that drove its stock up by more than 6%. However, the airline operator anticipates a first-quarter loss due to the grounding of Boeing 737 Max 9 airplanes, the same model involved in an Alaska Airlines emergency earlier this month.

United Airlines’ positive performance had a cascading effect on other airline operators, with American Airlines gaining over 3%, and Southwest Airlines, Delta Air Lines, and Alaska Air Group all registering gains of more than 2%.

Market Focus Ahead

Experienced traders are closely monitoring two crucial economic data releases scheduled for later this week. First, the preliminary fourth-quarter GDP figure, set to be unveiled on Thursday, holds substantial sway over market sentiment and future decisions. Following that, on Friday, the Commerce Department is expected to release the closely-watched personal consumption expenditures price index for December. These reports are poised to serve as pivotal indicators guiding traders’ decisions in the coming days.

Short-Term Forecast

The short-term forecast for the market leans cautiously bullish. Although recent record highs and strong performances from companies like United Airlines demonstrate positive momentum, the market’s retreat and investor caution signal potential challenges ahead.

Tech stocks have dominated the rally, but broader participation remains lackluster. Upcoming economic data releases, including GDP figures and the price index for December, could sway sentiment.

Traders should remain vigilant, closely monitoring these developments and preparing for possible fluctuations as the market approaches record levels amidst underlying uncertainties.

Technical Analysis

The E-mini Dow Jones is lower following its record-breaking move above 38,000 on Monday. While an immediate trend shift isn’t expected, caution is warranted, as the market could experience a sharp correction, with its closest support level being the 50-day moving average at 36,907.

Recent price movements suggest that the market’s momentum is being influenced by the tech-heavy S&P 500 and Nasdaq-100 indexes, heightening the risk of a short-term pullback.