It was a rinse-and-repeat day for the main indexes, which failed to make any big moves following their recent run higher. And once again, a light economic calendar had market participants skimming through single-stock news for possible catalysts.
On the earnings front, ride-hailing firms Uber Technologies (UBER) and Lyft (LYFT) were in focus following their respective first-quarter results.
UBER shares tumbled 5.7% after the company reported an unexpected loss and bookings miss. LYFT, on the other hand, surged 7.1% after its higher-than-anticipated results.
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Reddit's revenue soars in Q1 results
Reddit (RDDT) was another notable post-earnings mover in the company's first quarterly event since going public in mid-March.
The social media platform said Q1 revenue surged 48% year-over-year to $243 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) swung to positive $10 million from negative $50.2 million in the year-ago period. The company also disclosed daily active uniques of 82.7 million, a 37% increase over the year-ago period.
Reddit stock was up as much as 16% in Tuesday's after-hours session and finished Wednesday with a 3.9% gain.
Tesla erases $10 billion in market cap on DOJ news
In non-earnings news, Tesla (TSLA) was the worst Magnificent 7 stock today, tumbling 1.8% and erasing $10 billion in market value along the way. Weighing on shares was a Reuters report that indicates the Department of Justice is investigating the electric vehicle maker for potential securities or wire fraud related to its autopilot self-driving system.
Tesla has been put through the wringer this year, but Argus Research analyst Bill Selesky says recent price weakness represents a buying opportunity.
"Despite several (industry and operational) near-term major challenges, we expect Tesla to navigate through these issues and continue as the market leader in EVs, despite increased competition from Chinese original equipment manufacturers (OEMs)," the analyst notes.
The company is also positioned to benefit from the EV tax credits included in the Inflation Reduction Act, "as well as from increased semiconductor supplies and moderating raw-material cost inflation," Selesky says.
Choppy price action could continue
As for the main indexes, the Dow Jones Industrial Average rose 0.4% to 39,056 – its sixth straight daily win, the longest such streak of the year. The S&P 500 (-0.03 point at 5,187) and the Nasdaq Composite (-0.2% at 16,302) closed marginally lower.
The modest price action follows a strong start to May for the main indexes, which are up between 3% and 4% for the month-to-date.
"The recovery rally appears to be in consolidation mode as earnings season tapers off," says Louis Navellier, chairman and founder of Navellier & Associates. "We may spend the next few days with sideway indexes and all the volatility under the hood in individual names as earnings continue to come in rapidly."
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