What Lies Ahead for Dow ETF in Q4 Earnings?

The Dow Jones Industrial Average Index is performing better than the other two major indices amid the rise in Treasury yields and the tech sell-off. This is especially true as the blue-chip index shed about 1% compared to losses of 2.3% for the S&P 500 and 3.9% for the tech-heavy Nasdaq Composite Index. As the Dow Jones is highly exposed to cyclical sectors, the decline in tech stocks hurt the index relatively less (read: Low Volatility ETFs to Bet on Amid Market Turmoil).SPDR Dow Jones Industrial Average ETF Trust DIA, which tracks the Dow Jones Industrial Average Index, is down 1.8% in the past week. The outperformance might continue as we head into the fourth-quarter earnings season. The fourth-quarter 2024 earnings season will kick off this week, with banking sector players due to report numbers. The overall picture ahead of this reporting cycle is one of continued resilience and a steadily improving outlook. According to the latest Earnings Trends report, total S&P 500 earnings are expected to be up 7.4% from the year-ago period on 4.8% higher revenues. Estimates have steadily increased since the start of the period but the magnitude of estimate cuts is significantly lower than in comparable recent quarters. Of the 16 Zacks sectors, nine are expected to post significant earnings growth in the fourth quarter, with the strongest gains in the Technology sector (14.9%), followed by Finance (12.7%), Medical (12.3%), Consumer Discretionary (8.1%), Retail (7.2%) and Business Services (7.2%).DIA in FocusSPDR Dow Jones Industrial Average ETF Trust is one of the largest and most popular ETFs in the large-cap space, with an AUM of $37.8 billion and an average daily volume of 3 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, with a slight tilt toward the top firms. Financials (23.9%), information technology (20.3%), healthcare (15%), consumer discretionary (14.1%) and industrials (12.8%) are the top five sectors. SPDR Dow Jones Industrial Average ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk.   Nearly one-fourth of the blue-chip firms are expected to announce results this week and the next. JPMorgan Chase JPM and UnitedHealth UNH are expected to report on Jan. 15 and Jan. 16, respectively. Goldman GS and Johnson & Johnson JNJ will announce earnings on Jan. 21 and Jan. 22, respectively, while International Business Machines (IBM) will report on Jan. 29. Dow Inc. DOW and Intel INTC are slated to release earnings on Jan. 30.Let’s delve deeper into the probable fourth-quarter earnings picture that will likely aid the fund in the coming days.Earnings WhispersAccording to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.JPMorgan has an Earnings ESP of +1.36% and a Zacks Rank #2. The stock has seen a positive earnings estimate revision of seven cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information — is a good indicator for the stock. JPM delivered an earnings surprise of 7.73%, on average, in the last four quarters. UnitedHealth has an Earnings ESP of -0.03% and a Zacks Rank #3. The stock has witnessed a negative earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. It delivered an earnings surprise of 2.84%, on average, over the last four quarters. Goldman has an Earnings ESP of +1.98% and a Zacks Rank #2. The stock has witnessed positive earnings estimate revision of three cents over the past seven days for the to-be-reported quarter. GS’ earnings surprise track over the preceding four quarters is good, with the average surprise being 29.33%. Johnson & Johnson has an Earnings ESP of 0.00% and a Zacks Rank #2. The stock witnessed no earnings estimate revision over the past 30 days for the to-be-reported quarter. JNJ’s earnings surprise track record over the preceding four quarters is robust, with an average of 4.15% (read: 5 Sector ETFs to Bet on Q4 Earnings).International Business Machines has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). The stock saw no earnings estimate revision in the past 30 days for the to-be-reported quarter. IBM delivered an earnings surprise of 5.47%, on average, in the last four quarters.Dow has an Earnings ESP of -11.09% and a Zacks Rank #5 (Strong Sell). The stock has seen a negative earnings estimate revision of a penny over the past seven days for the to-be-reported quarter. DOW came up with a beat in each of the last four quarters, the average being 5.82%. Intel has an Earnings ESP of 0.00% and a Zacks Rank #4. The stock has witnessed no earnings estimate revision over the past 30 days for the to-be-reported quarter and delivered a negative earnings surprise of 363.04%, on average, over the last four quarters.Bottom LineWith some of the blue-chip companies having reasonable chances of coming up with an earnings surprise, investors should closely monitor the movement of the Dow ETF and grab any opportunity that arises from a surge in any of the 30 stocks.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Intel Corporation (INTC): Free Stock Analysis Report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Dow Inc. (DOW): Free Stock Analysis Report SPDR Dow Jones Industrial Average ETF (DIA): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks