Stock Market Today: Microsoft, Alphabet Carry Nasdaq to a Razor-Thin Gain

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Corporate earnings continued to dominate the market's motion Wednesday amid a lull in economic data and persistent but nonetheless slow progress on the Democrats' social spending plan.

A pair of mega-cap stocks threw their weight around today. Microsoft (MSFT, +4.2%) cruised after a rousing quarterly report that saw revenues jump 22% year-over-year and net income pop 48%, with both figures exceeding analysts' consensus estimate.

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"It appears that software spending continues to be strong; this could be a very good sign for the rest of the tech sector," says Anthony Denier, CEO of trading platform Webull. "The cloud results [Microsoft's Azure and other cloud services grew revenues by more than 50%] also indicate a good quarter for other tech stocks."

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Google parent Alphabet (GOOGL, +5.0%) also rocketed higher after announcing wide beats on the top and bottom lines. GOOGL shares are up 66.9% year-to-date to more than triple the S&P 500 and bring the company's market value to just under $2 trillion.

Those performances helped keep the Nasdaq Composite in positive territory, albeit barely (by a fraction of a point, to 15,235) on a Wednesday in which most sectors were underwater.

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The Dow Jones Industrial Average (-0.7% to 35,490) slipped from its all-time high thanks in part to Visa (V, -6.9%), which was the average's worst stock today. The credit card concern's fiscal fourth-quarter adjusted earnings of $1.62 per share on $6.6 billion in revenue were higher than Wall Street's consensus estimates, but a lower-than-expected current-quarter and fiscal 2022 net revenue growth guidance caught investors off guard.

Sector peer Mastercard (MA) – which takes its own turn in the earnings confessional ahead of tomorrow's open – wasn't spared from the selling, slumping 6.1% and contributing to the S&P 500's 0.5% decline to 4,551.

Other news in the stock market today:

McDonald's (MCD) jumped 3.0% in the wake of its earnings report. In the third quarter, MCD recorded adjusted earnings of $2.76 per share on $6.2 billion in revenue – more than the $2.46 per share and $6.0 billion expected by analysts – thanks to a roughly 6% year-over-year increase in menu prices. The fast-food chain also said global same-store sales were 12.7% higher than Q3 2020 thanks in part to solid demand in the U.K.
Robinhood Markets (HOOD) was another post-earnings loser, surrendering 10.4% to close at $35.44 per share – roughly half the company's trading peak above $70 and below the investing platform's initial public offering (IPO) price of $38 per share. Sparking the selloff was a major revenue miss in HOOD's third quarter, with the company reporting $365 million versus the $431.5 million analysts were expecting. Additionally, Robinhood said monthly active users fell to 18.9 million from the 21.3 million the company had in Q2, while average revenue per user declined 36% year-over-year to $65. Still, Mizuho Securities analysts Dan Dolev and Ryan Coyne kept their Buy rating on HOOD stock. "Although results were lackluster, there were a few positives too, including progress on crypto wallet – 1 million waitlist signups – no early lock-up and a more normalized equities/cryptocurrency revenue mix," they wrote in a research note.
The small-cap Russell 2000 was knocked around to the tune of 1.9%, to 2,252.
U.S. crude oil futures plunged 2.4% to settle at $82.66 per barrel after a report from the Energy Information Administration showed domestic crude inventories unexpectedly rose last week. Rumors that Iran is ready to revive nuclear deal talks also weighed on crude.
Gold futures edged up 0.3% to finish at $1,798.80 an ounce.
The CBOE Volatility Index (VIX) improved by 6.8% to 17.06.
Bitcoin continued its decline from recent highs, off 4.8% to $59,135.70. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Boom Times Ahead? Historically Speaking, Yes.

And thus ends the best stock-trading day of the year.

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No no – today's performance wasn't much to look at. But historically, it doesn't get any better than Oct. 27. Since 1950, an investor buying the S&P 500 and holding for five days would have enjoyed the best returns if they had started on this date, with an average return of 1.59%, says Ryan Detrick, chief market strategist for LPL Financial.

But don't feel bad about missing out – we're also entering one of the best weeks (and months!) for the stock market, too, which we explore more in depth here.

Interestingly, one of the best ways to celebrate this fertile market stretch might be to explore some dried-out names.

BofA Securities recently delivered a note explaining how tax-loss harvesting season – when portfolio managers and retail investors alike dump losing positions to salvage a tax break – can be a great time to pick up fundamentally sound names on the cheap.

The research outfit also outlined a baker's dozen stocks that could be ripe for the picking. We've taken a closer look at each of these BofA picks, and homed in on the bullish cases for holding these names long after tax-loss harvesting season is over.

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Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.

You can check out his thoughts on the markets (and more) at @KyleWoodley.