Day Traders Diary

10/27/21

The Dow and S&P 500 pulled back from near record highs on Wednesday as the momentum from a strong earnings season faded today. The Dow Jones Industrial Average dropped 266 points, falling for the first time in four days, dragged down by Visa and Boeing. The S&P 500 traded down 23 points or 0.51%, for its first down day in three days. The tech-heavy Nasdaq Composite gained 12 cents as Microsoft and Alphabet both soared over 4%.

Microsoft shares jumped 5% after the tech company reported earnings that exceeded analysts' estimates and the fastest revenue growth since 2018. Google-parent Alphabet also popped more than 5% following a stronger-than-expected quarterly report.

Visa's stock slipped 6.8% after issuing a revenue outlook that some analysts considered conservative. Plus, the Justice Department is investigating Visa's relationship with financial-technology firms, sources familiar with the matter told Dow Jones.

General Motors shares fell more than 4% even after the industrial giant topped Wall Street's earnings and revenue estimates for the third quarter. Boeing saw its stock falling 1.4% after the aircraft maker posted a wider-than-expected loss.

Robinhood shares were getting slammed, down nearly 11% the day after the trading app reported revenue well below expectations primarily due to weakness in crypto trading. Twitter shares also fell 9% on concerns about expense guidance, despite strong earnings.

So far roughly 38% of the S&P 500 has reported earnings. Of the names that have posted quarterly updates, 83% have topped earnings expectations, while 79% have exceeded revenue estimates.

Strong results have been key to pushing the major averages to new highs. The S&P 500 has rallied more than 6% in October, on track for its best monthly performance since November 2020. The equity benchmark reached its 57th record close of 2021 on Tuesday.

Texas Instruments shares tumbled more than 4% after the company missed revenue estimates while Visa fell 6% despite beating on the top and bottom lines. Enphase Energy leaped 50% after reporting record revenue in face of supply chain headwinds.

Coca-Cola rose about 2% after the company posted a beat on the top and bottom lines and raised its outlook, saying the business was getting stronger particularly in areas where the Covid recovery has been the best.