Stormy April Trading Closes on Low Note

It's been a stormy month for Wall Street, and the last week of April was no exception as the major indexes made outsized moves in both directions nearly all week. Things looked like they might be turning around during Monday's trading, after the Dow Jones Industrial Average (DJI) reversed its midday plummet to settle with a comfortable win, and the Nasdaq Composite (IXIC) followed suit. News of Elon Musk's Twitter (TWTR) takeover was the hot-button topic of the day, while traders also kept a close eye on Covid-related lockdowns in China. The rally didn't last, though, and by the end of the day on Tuesday, the Dow had lost 809 points, hitting its lowest level since March 2021, while the Nasdaq and S&P 500 Index (SPX) didn't fare much better. Threats of a nuclear war out of Russia, as well as even more anxieties over a slowing economy weighed heavily on sentiment, and sent Wall Street's "fear gauge" -- the Cboe Market Volatility Index (VIX) -- to its highest level since March 9. 

More wild trading bled into Wednesday's session, and after a day of struggling for direction, the Dow settled with a muted win as traders took in another round of earnings reports. While Big Tech saw a solid turnout in the earnings confessional, the Nasdaq inched lower, and the S&P 500 settled flat. There was a massive turnaround during Thursday's session, with all three indexes logging their best days since early March after several tech names, including Meta Platforms (FB) provided encouraging earnings reports. It couldn't last, though, and concerning current-quarter forecasts from the likes of Amazon.com (AMZN) and Intel (INTC) have once again sent stocks lower by midday on Friday, with the Nasdaq eyeing its biggest monthly percentage drop since 2008. 

Corporate Earnings Dominate Headlines 

This batch of corporate earnings has forced investors to keep their head on a swivel, as some names manage to brush off inflationary headwinds and economic headwinds, while others have floundered. A number of Dow members were in focus, with mixed response from Wall Street. Coca-Cola (KO), specifically, hit a new record high after its earnings report, while Microsoft (MSFT), and McDonald's (MCD) followed suit with post-earnings pops of their own. Not every blue-chip stock was as lucky. Boeing (BA), Chevron (CVX), and 3M (MMM) all took a nosedive after their respective reports.

And we'd be remiss not to call out the more than 40% plummet one-time stay-at-home darling Teladoc Health (TDOC) suffered following its turn in the confessional. Elsewhere, Spotify Technology (SPOT) and Enphase Energy (ENPH) swung to opposite sides of the spectrum after earnings, while Kraft Heinz (KHC) saw a muted response. 

 

Stocks That Kept Options Traders Busy This Week

Unsurprisingly, options traders have been kept buy by the deluge of reports out this week. We covered intraday activity for United Parcel Service (UPS), which saw a major influx in call volume. PepsiCo (PEP) and Nkarta (NKTX) were also targeted by options players after their quarterly confessionals. Meanwhile, analysts and options traders were both speculating on more upside for the recently struggling Advanced Micro Devices (AMD).

Where to Look Next

Another batch of corporate reports will get the lion's share of Wall Street's attention next week, though a Federal Open Market Committee (FOMC) statement, and comments from Federal Reserve Chairman Jerome Powell will also sway markets as May kicks off. Additionally, the S&P Global U.S. manufacturing and services purchasing managers' indexes (PMI) will be due out next week. Of the biggest names gearing up to report their corporate results will be Airbnb (ABNB), AMC Entertainment (AMC), Biogen (BIIB), and more.

 

the meantime, traders might want to see what type of lasting effects a bearish April for the S&P 500 might have on stocks. And for even more insight, check out our most recent Indicator of the Week, in which Schaeffer's Senior Quantitative Analyst Rocky White breaks down a VIX signal that could mean even more choppiness ahead.