The Dow Jones Industrial Average fell Wednesday as McDonald’s (MCD) got battered amid an E. coli outbreak. Coca-Cola (KO) and Boeing (BA) fell on the stock market today following earnings reports. And legendary Berkshire Hathaway (BRKB) Chief Executive Warren Buffett issued a warning to investors.
The Dow saw early losses intensify, falling more than 300 points, or 0.8%. Walmart (WMT) and Verizon Communications (VZ) were among the best-performing Dow components.
↑
X
The Chip War With China Is Heating Up. Who’s Winning?
Meanwhile, the Nasdaq composite lagged with a 1% decline. Baker Hughes (BKR) fared best here with a lift of 4%. Texas Instruments (TXN) and On Semiconductor (ON) were also strong. But Tesla (TSLA), which posts earnings after the close today, fell more than 1%. This is arguably the week’s most important quarterly report.
Stock Market Today: Small Caps, Growth Stocks Skid
The benchmark S&P 500 continued to retreat, falling 0.6%. Starbucks (SBUX) was off opening lows but remained down 0.5% after preliminary results showed a decline in sales. The coffee behemoth also suspended its outlook for 2025.
Enphase Energy (ENPH) was crushed. The solar stock plunged nearly 14% after issuing a disappointing outlook.
Amphenol (APH) was initially a top performer on the S&P, but backed well off highs. It remained up more than 1% and slipped back below a 70.84 consolidation entry.
The S&P 500 sectors were mostly negative. Only real estate and utilities, the latter a defensive area, were in positive territory. Conversely, communication services and consumer discretionary lagged.
Small caps were also spanked, with the Russell 2000 slipping 0.9%. Growth stocks were getting hit the hardest though, with the Innovator IBD 50 (FFTY) exchange traded fund sliding more than 1%.
And while stocks gave up ground, Treasury yields were climbing again. The 10-year Treasury note rose 2 basis points to 4.23% while the 2-year gained 3 basis points to sit at 4.06%.
Existing Home Sales Fall To 14-Year Low, Homebuilders Steady
Existing home sales in America fell to their lowest level in 14 years, the National Association of Realtors reported. Sales of previously owned homes skidded 1% to an annualized rate of 3.84 million in September. This was the lowest level since October 2010.
In addition, the inventory of unsold existing homes rose by 1.5% on the prior month to 1.39 million at the end of September, or 4.3 months-worth of supply at the current monthly sales pace.
“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy,” NAR Chief Economist Lawrence Yun said in a news release. “Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
Homebuilder stocks were steady. D.R. Horton (DHI) rose 0.1%, PulteGroup (PHM) gained 0.6% and NVR (NVR) slipped 0.2%.
The SPDR S&P Homebuilders ETF (XHB) rose 0.1% while the triple-leveraged Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF (NAIL) rose 0.2%.
10:53 am ET
McDonalds Stock Hit Amid E. Coli Outbreak
The bears took a bite out of McDonald’s stock in early trade amid an E. coli outbreak. The stock tumbled after the Centers for Disease Control and Prevention linked the fast-food chain’s Quarter Pounder burgers to the issue.
There have been 10 hospitalizations and one death, with “most” of the 49 people affected falling ill after eating a Quarter Pounder.
McDonald’s USA president Joe Erlinger told NBC that the company “took swift action” to remove the burger from its menu. The company has said other menu items such as regular burgers and Big Macs are not affected and are still available.
Shares were off lows but remained down more than 5%. McDonald’s stock nearly erased gains from a 292.21 cup-with-handle entry.
Dow Jones Today: Coca-Cola, Boeing Slip After Results
Outside of McDonald’s, a couple of other Dow Jones stocks made waves on the stock market today.
Boeing stock fell more than 1% after the firm turned in a whopping loss of $10.44 per share, which was bigger than analysts feared. However, revenue of $17.8 billion met expectations.
The aerospace giant already flagged to investors this would be a tough quarter. It comes as International Association of Machinists and Aerospace Workers members vote Wednesday on a new contract agreed between Boeing and the union. Workers will get a 35% wage increase over the four-year span of the contract.
If approved by workers, the deal would bring a crippling monthlong strike to an end. Standard & Poor’s has estimated that Boeing is losing $1 billion a month due to the industrial action.
Coca-Cola fell more than 2% on the stock market today, but was off lows, after the soft drink leviathan posted better-than-expected quarterly earnings. Earnings rose 4% to 77 cents a share as revenue fell 1% to $11.95 billion, also above views. Higher prices helped offset lighter demand.
The stock has now undercut the lows of a flat base and sits about 4% below its 50-day moving average.
Buffett Issues Investing Warning
Warren Buffett is followed closely by investors due to his legendary success. But the “Oracle of Omaha” has issued a warning to investors that they should not be scammed by people claiming he is endorsing any investment products or political candidates.
“Mr. Buffett does not currently and will not prospectively endorse investment products or endorse and support political candidates,” a statement on Berkshire’s website said.
However, some of the stocks in the portfolio of his Berkshire Hathaway (BRKB) conglomerate currently sit near entries.
For one, Apple (AAPL) sits just below a consolidation entry of 237.23, MarketSurge analysis shows. This is an early stage pattern. Overall performance is very strong, with a Composite Rating from Investor’s Business Daily sitting at 94 out of 99. Earnings are due soon, which adds risk.
Also, Amazon.com (AMZN) is eyeing a consolidation buy point of 201.20. The e-commerce kingpin also plans to post results soon. Earnings and price performance are solid, with the stock holding a Composite Rating of 95.
A third Berkshire holding, Louisiana-Pacific (LPX), is testing support at its 50-day line as it sits just below a flat-base buy point of 101.89. Overall performance is strong, with the wood products play holding a rare ideal EPS Rating of 99.
Stock Market Today: Stocks Near Entries
A number of stocks traded near buy points early Wednesday. Cboe Global Markets (CBOE) sits just below a flat-base entry of 216.14. This is a first-stage pattern. IBD research has found such early stage bases have a better chance of success.
Cboe holds an excellent IBD Composite Rating of 95. Earnings are a key strength, with its EPS Rating sitting at 92 out of 99. Funds have been net buyers of late, netting it an Accumulation/Distribution Rating of B.
Cybersecurity leader Palo Alto Networks (PANW) is flirting with a consolidation pattern entry of 380.84, according to MarketSurge analysis. However it was giving up ground in early action.
The security software play has a strong, but not ideal, IBD Composite Rating of 91 out of 99. The stock is up nearly 28% so far in 2024 and is among the top 15% of issues in terms of price performance over the past 12 months. Noteworthy funds holding shares include the highly rated Fidelity Contrafund.
Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.
YOU MAY ALSO LIKE:
One Company Will Be Worth More Than Nvidia Next Year: Analysts
These Are The five Best Stocks To Buy And Watch Now
Join IBD Live Each Morning For Stock Tips Before The Open
This Is The Ultimate Warren Buffett Stock, But Should You Buy It?
Is This Donald Trump Stock A Buy Amid Recent News?
