Stocks traded near session lows Wednesday afternoon, dragged down by weak earnings at Walt Disney (DIS) and other consumer-related companies, while breakouts Blue Buffalo Pet Products (BUFF) and Monster Beverage (MNST) faded. But Amazon.com (AMZN) continued to climb.
The Dow fell 1% as Walt Disney tanked following weaker-than-expected quarterly results. The S&P 500 and the Nasdaq each lost 0.7% in the stock market today. Volume was running above Tuesday’s levels on both the NYSE and the Nasdaq.
Amazon bucked the downtrend, rising nearly 2% to a new high in heavy volume as it continues to soar following a blowout Q1 earnings report April 28. The stock is 19% past a 603.34 cup-with-handle buy point.
Those who bought at the breakout should consider taking some profits when the gain reaches 20% to 25%, as most stocks correct to form new bases at that point. Those with conviction that the online retailer can continue to rise may choose to hold on, however.
Disney gapped down and fell more than 4% after a disappointing fiscal Q2 report, including a smaller-than-expected 11% gain in profit to $1.36 per share. Nike (NKE) and Wal-Mart (WMT) also weighed on the Dow, falling more than 3% each.
Elsewhere, a couple of breakouts were fading.
Premium dog food maker Blue Buffalo broke out of a cup-with-handle base with a 26.08 buy point after it reported earnings that were 19% higher than a year earlier, a penny above views. Revenue was $280 million, beating estimates of $274 million. But the stock had fallen below the buy point in the afternoon, trading at 25.87, up 8.3%.
The company came public July 22 and carved out a deep base that corrected as much as 47%, a major flaw.
Also, Monster Beverage retreated below a 150.80 buy point of a cup-with-handle base Wednesday, after the maker of energy drinks broke out the previous day in heavy volume following a strong Q1 earnings report.