Tech futures fall on Apple, Amazon
Dow Jones futures rose slightly overnight, while S&P 500 futures fell slightly and Nasdaq futures fell sharply as Apple (AAPL) and Amazon shares led major earnings Thursday night. Exxon Mobil (XOM) and Chevron (CVX) are expected early Friday.
Stock market rally attempt gained momentum as parent of Facebook Metaplatforms (FB) surged and a number of downed former tech leaders rebounded. Giant Dow Merck (MRK) and Eli Lily (LLY) rallied on earnings, both signaling buy signals.
Tesla stock fell slightly on Thursday, but after paring big intraday losses. Late Thursday, CEO Elon Musk revealed he had sold more than four million shares in the previous two days.
Apple broth and Amazon.co.uk (AMZN) reported earnings after the close, as well as Intel (INTC) and Atlassian (TEAM). But aside from Apple, all of these stocks are off the charts.
Alongside oil majors Exxon and Chevron, medical giants AbbVie (ABVV) and Bristol Myers Squibb (BMY) report ahead of Friday’s open. Stocks XOM and giant Dow Chevron are close to buy points. ABBV stock is finding support at its 50-day line while Bristol Myers is at its 21-day line, both after strong advances.
You’re here (TSLA) and LLY shares are on the IBD ranking. MRK stock is on SwingTrader. The TEAM stock is on IBD Long-Term Leaders. Exxon Mobil, Chevron and BMY stocks are listed on the IBD Big Cap 20. Merck was the IBD stock of the day.
The video embedded in this article discusses the strong market rally and analyzes FB, Merck and Eli Lilly stocks.
Dow Jones Futures Today
Dow Jones futures rose 0.15% from fair value, even with Apple and Intel stocks hitting the blue chips. S&P 500 futures fell 0.3%. Nasdaq 100 futures fell 0.95% as Apple and AMZN shares and other tech earnings losers were held back. These are all a far cry from Thursday night’s worst levels.
The 10-year Treasury yield fell 4 basis points to 2.82%.
Remember that overnight action on futures contracts on Dow and elsewhere does not necessarily translate into actual trading in the next regular trading session.
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Apple’s earnings and revenue beat forecasts amid strong iPhone sales. Tech giant Dow Jones approved another $90 billion in AAPL stock buybacks and raised its dividend by 5% to 23 cents per share. Apple stock initially rose modestly after hours but then reversed after warning of a $4 billion to $8 billion headwind this quarter due to ongoing shutdowns in China. AAPL stock is down 2% overnight.
Shares jumped 4.5% to 163.64 in Thursday’s regular session, retracing the 200-day line. AAPL stock has a buy point of 179.71 from a very large handle for a consolidation that is only 18% deep. It can be said that there is an early entry from a short trendline slightly above the 50-day moving average. The relative strength line for Apple shares is not far from the highs, reflecting the general weakness in the market.
Amazon posted a big loss in the first quarter, reflecting the decline in the value of its Rivian (RIVN) pile. Revenue slightly missed. Amazon Web Services slightly exceeded revenue targets. But Amazon guided low in the second quarter.
AMZN stock plunged nearly 9% in extended trade. Shares jumped 4.65% on Thursday to 2,891.93, but are trading near their lowest levels since mid-2020.
Intel’s revenue narrowly exceeded views. But the struggling chip giant guided second-quarter EPS and sales low. INTC stock fell 4% in extended action. The shares rose 3.6% on Thursday to 46.84.
Atlassian’s earnings beat consensus. But the collaboration software maker guided low on current-quarter EPS. TEAM stock fell 6% overnight. Atlassian stock jumped 6.7% on Thursday to 259.98.
Merck shares rose 4.9% to 88.58 after better than expected earnings. MRK stock is technically still below a buy point of 89.58 cup with handle, according to MarketSmith analysis. But stocks broke the handle’s downtrend and it posted its best close since early November. The RS line for MRK stock is the highest since January 2021.
Eli Lilly Stock
Eli Lilly shares jumped 4.3% to 297.27 on first-quarter earnings. After going back and forth with a cup base break earlier this month, LLY stock has been trading profits just above the 284 buy point. long, but also broke a short-term downtrend and broke above their 21-day moving average.
Elon Musk sells Tesla shares
Musk, in SEC filings late Thursday, revealed he sold 4.415 million Tesla shares worth nearly $4 billion on Tuesday and Wednesday. On Tuesday, TSLA stock plunged 12.1%. Musk tweeted Thursday night that he was done selling stocks.
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Musk’s revelations came too late for after-hours trading.
Musk is likely to sell the shares to help pay for the Twitter takeover.
Shares fell 0.45% to 877.51 on Thursday, but must have been dragged down to this point by a significant market rebound. Intraday, TSLA stock fell to 821.70. Technically, Tesla still has a buy point of 1,152.97 cup with handle, but the chart looks damaged with stocks below key moving averages.
Stock market Thursday
The stock market rally attempt initially faltered, but then gained momentum.
The Dow Jones Industrial Average rose 1.85% in trading Thursday. The S&P 500 index jumped 2.5%. The Nasdaq composite gained 3.1%. The small-cap Russell 2000 rose 1.8% after hitting a new 52-week intraday low.
U.S. crude oil prices jumped 3.3% to $105.36 a barrel. The 10-year Treasury yield rose 4 basis points to 2.86%.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.4%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 4%. ETF VanEck Vectors Semiconductor (SMH) climbed 5.7%.
The SPDR S&P Metals & Mining ETF (XME) rebounded 1.85% and the Global X US Infrastructure Development ETF (PAVE) rebounded 1.9%. The US Global Jets ETF (JETS) rose 2%. The SPDR S&P Homebuilders ETF (XHB) jumped 2.8%. ETF Energy Select SPDR (XLE) gained 3%, with major components in XOM and CVX stocks. The Financial Select SPDR ETF (XLF) rose 1.3%. The SPDR healthcare sector fund (XLV) climbed 1.4%, with ABBV shares and large holdings Bristol Myers.
Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) was down 1.4% and ARK Genomics ETF (ARKG) was down 3.5%, both hitting 24-month lows intraday. the Teladoc Health (TDOC) crash weighed on both funds. Tesla stock remains the No. 1 position among Ark Invest’s holdings.
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Market rally analysis
The stock market finally had a strong session, with powerful price gains across the board. But it’s only one day. The best one-day percentage gains in stock market history are in the bad markets.
The Nasdaq has now started another attempt at a stock rally, while Thursday was the second day for the Dow Jones and the S&P 500. If the major indices maintain their recent lows, investors could look for a follow-up day to confirm the new rally. as soon as possible. like next week. In practice, it seems unlikely that a follow-up day will take place before the end of the Federal Reserve’s two-day meeting next Wednesday.
For now, the market remains in a correction.
Many of Thursday’s big winners were downcast techies rallying to not-so-bad-as-dreaded incomes — like Facebook, PayPal (PYPL) and ServiceNow (NOW) – but away from buying opportunities. Merck and LLY stocks were welcome exceptions.
But relief rallies can quickly fade, with Apple and Amazon driving futures lower overnight.
The Energy, Steel and Fertilizer groups remain resilient, as do Defense stocks. Drugmakers and health insurers look solid. Travel names are always interesting.
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What to do now
Thursday’s market action doesn’t matter. What matters is what comes next. If the major indices are soon reaching new lows, then Thursday is just a blip in an ongoing correction or bear market. If the major indices continue to climb and confirm a new stock market rally, it is significant.
Investors with little or no exposure could have bought MRK or Lilly shares on Thursday. Another option would be to buy a broad-market ETF, hoping for at least a short-term bounce. But if you’re going to make new purchases before a tracking day, keep exposure minimal and be extremely nimble. Quickly take partial profits and be ready to exit.
Being 100% in cash remains a good strategy.
Your main goal right now is to be ready when the market turns. Build those watch lists. They will need to be revised as the earnings season and recent market losses bring up some names and drag down others.
And stay engaged. You don’t have to stare at your screens watching the market non-stop, but keep an eye out so you don’t get caught off guard.
Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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