Dow Jones futures rose Thursday morning, along with S&P 500 futures and Nasdaq futures, amid another busy night and morning of earnings. The stock market rally got a big boost on Wednesday as tech titans rose.
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Shares of Apple, Amazon.com ( AMZN ), Microsoft ( MSFT ), Facebook parent Meta Platforms ( META ), Tesla ( TSLA ) and Google parent Alphabet ( GOOGL ) were among the leaders. Apple ( AAPL ) offers an aggressive buy point, while shares of Microsoft and Google, if you squint, are nearing possible entries.
Highly regarded former growth leaders also had a strong session, with venture capital once again in vogue.
Overnight Profits
Fortinet ( FTNT ), Albemarle ( ALB ), McKesson ( MCK ), ELF Beauty ( ELF ), and Axcelis Technologies ( ACLS ) were notable earnings reports after the close. All closed on Wednesday near points of purchase. But while shares of McKesson, Axcelis, ELF and ALB rose, shares of FTNT fell.
Luxury EV maker Lucid Group ( LCID ) also reported quarterly results. LCID shares fell on weak revenue and production guidance.
Early Thursday, Eli Lilly ( LLY ), Lantheus ( LNTH ), Quanta Services ( PWR ), Cheniere Energy ( LNG ), New Fortress Energy ( NFE ), former software leader Datadog ( DDOG ) and Chinese e-commerce firm Alibaba ( BABA ) reported.
Eli Lilly, Lantheus, Quanta Services and Cheniere Energy are on IBD’s list. NFE shares are on the ranking’s watch list. Microsoft, Google and FTNT stocks are among IBD’s long-term leaders. New shares of Fortress Energy and ACLS are on the IBD 50. PWR stock is on the IBD Big Cap 20.
Dow Jones futures today
Dow Jones futures were 0.1% above fair value. S&P 500 futures advanced about 0.1 percent and Nasdaq 100 futures rose 0.1 percent. Futures were modestly higher earlier this morning.
Crude oil prices rose slightly.
The yield on the 10-year Treasury note fell 5 basis points to 2.7%.
The Bank of England raised interest rates again, but this time by half a point, its biggest move since 1995.
Remember, overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock market rallies
The stock market rally rebounded strongly on Wednesday, led by technology companies after Tuesday’s retreat, led by the Dow.
The Dow Jones Industrial Average rose 1.3% in after-hours trading on Wednesday. The S&P 500 rose 1.6%. The Nasdaq composite jumped 2.6%. The small-cap Russell 2000 gained 1.4%.
The 10-year Treasury yield rose 1 basis point to 2.75%, but was well above its intraday peak of 2.85%.
U.S. crude fell 4 percent to $90.66 a barrel, below the level it closed at on Feb. 23, just before Russia’s invasion of Ukraine. OPEC+ agreed to raise production quotas in September by a slim 100,000 barrels per day, with the actual output increase likely to be modest. But demand concerns continue to weigh on oil prices, with U.S. crude and gasoline inventories unexpectedly rising in the past week.
Megacap Stock Action
Apple shares jumped 3.8% to 166.13, a three-month high. The stock moved above its 200-day line on Friday after the earnings, then pulled back slightly to start the week. Investors could use Wednesday’s move as an aggressive entry even though volume was below average. AAPL shares are still far from the top and buy point at 183.04, but their relative strength line is now at a new high.
Shares of MSFT rose 2.8% and Google rose 2.6%. META shares jumped 5.4% but are still below their long-sliding 50-day line. Shares of AMZN rose 4%, moving toward its 200-day line.
Tesla shares rose 2.3%, their sixth straight gain and closing above the 200-day line. Tesla shareholders are expected to approve TSLA’s 3-for-1 stock split today.
ETFs
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.4%, with energy names weighing on the funds. The iShares Expanded Tech-Software Sector ETF ( IGV ) jumped 3.2%. MSFT shares are a major holding of IGV, with Fortinet and DDOG shares also components. The VanEck Vectors Semiconductor ETF ( SMH ) advanced 2.4%.
The SPDR S&P Metals & Mining ETF (XME) fell 0.4% and the Global X US Infrastructure Development ETF (PAVE) rose 0.7%. The US Global Jets ETF (JETS) rose 3%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.6%. The Energy Select SPDR ETF (XLE) fell 2.9% and the Financial Select SPDR ETF (XLF) rose 1.5%. The Healthcare Select Sector SPDR Fund ( XLV ) advanced 0.9%, with LLY shares flat.
Reflecting more speculative stocks, the ARK Innovation ETF ( ARKK ) jumped 6.1% to a three-month high. ARK Genomics ETF ( ARKG ) jumped 4.7%, matching a three-month intraday high. TSLA stock is a major holding in the Ark Invest ETF.
The five best Chinese stocks to watch now
Key earnings from Wednesday night
McKesson’s earnings beat views as the drug distributor rose in EPS. Shares of MCK were up slightly in overnight trade. Shares fell 2.4 percent to 327.10 on Wednesday after falling below a 340.04 flat buy base on Tuesday, according to MarketSmith analysis.
Fortinet’s earnings slightly beat second-quarter views, while third-quarter revenue and guidance were roughly in line. Shares of FTNT fell early Thursday, signaling a move below the 200-day and possibly the 50-day line. Shares rose 4.2% to 62.88 on Wednesday, closing above the 200-day, a major stumbling block in recent months. Fortinet shares have a buy point at 74.45, but a strong move above the recent July 12 high of 63.56 could offer an early entry or place to start a long-term leader position.
Albemarle’s earnings beat estimates, while the lithium play also picked up again. ALB shares rose steadily early Thursday. Shares fell 1.8% to 239.54 on Wednesday as rival Livent ( LTHM ) turned sharply lower despite seemingly strong earnings. ALB shares have a buy point at 273.78 from a deep cup-handled base.
ELF Beauty’s earnings easily beat estimates for the fiscal quarter, while sales growth accelerated. The budget cosmetics maker also guided higher for full fiscal 2023. Shares of ELF rose modestly in extended trade. Shares fell 0.6% on Wednesday to 33.87, within a range of a 33.54 buy handle cup point.
Axcelis’ earnings easily beat, while sales growth of 50% slightly beat. The chip game was led by third quarter earnings. Shares of ACLS were modestly higher overnight. Shares rose 3.8% to 72.70 on Wednesday. Axcelis shares are working towards a buy point at 83.83, well extended by possible early entries.
Clear earnings were mixed, with a smaller-than-expected loss but revenue well below views. Lucid again lowered its production target for the full year. While the Lucid Air sedan, a rival to the Tesla Model S, has won critical acclaim, manufacturing and supply chain issues have plagued the EV startup like Rivian ( RIVN ) . LCID shares fell in extended action. Shares rose 4% to 20.56 on Wednesday, well below a November peak of 57.75.
Key Thursday morning earnings
Eli Lilly’s earnings matched views, but revenue was weak and the pharmaceutical giant cut full-year targets. Shares of LLY fell modestly early on Thursday. On Wednesday, shares fell 2% to 313.83, below the 50-day line and just below an old buy point.
Alibaba’s earnings and revenue beat consensus. Shares of BABA jumped ahead of the open, but still below its 50-day and 200-day lines. Alibaba shares rose 3.35% to 95.72 on Wednesday.
Quanta Services narrowly beat EPS estimates and topped revenue reviews. Shares of PWR fell 1% in the open. Shares fell 0.9% on Wednesday, trading just below a buy point after a breakout late last week.
Lantheus’ earnings and revenue comfortably outperformed. Shares of LNTH rose steadily before the open. Shares fell 0.3% to 75.89 on Wednesday, within a range of a 73.88 buy point.
Datadog beat EPS expectations, but top-line guidance and the acquisition sent DDOG shares tumbling before the open. Shares of DDOG rose 5.7% on Wednesday, nearing near-term highs.
Cheniere Energy’s earnings appear to have missed views, although revenue jumped 165%, easily beating. The LNG play also raised some guidance for the full year. LNG stocks rose modestly, signaling a possible move above a traditional buy point that already cleared last week’s trendline entry. Shares fell 0.3% on Wednesday.
New Fortress Energy’s earnings posted a net loss, but 69 cents adjusted for a small loss a year earlier. Revenue jumped 161%. NFE shares were up 1% early Thursday, nearing a baseline buy point. Shares fell 0.7% on Wednesday.
Market Rally Analysis
The stock market rally had strong gains on Wednesday after retreating modestly on Tuesday.
The Nasdaq is now well above its highs since early June, with Nasdaq volume much higher than Tuesday. Shares of Apple, Meta, Google and ARK rose.
The S&P 500, Dow Jones and Russell 2000 are still below their early June highs, although the S&P 500 and Russell are closing in.
Market breadth improves as leadership expands.
Red-hot solar stocks had a rough session. SolarEdge ( SEDG ) tumbled, erasing big recent gains. But group leader Enphase Energy ( ENPH ) was barely phased.
Oil stocks retreated with lower crude prices, but this could be a chance to build handles at the base of the cup.
Speculative growth names were among the big gainers on Wednesday, reflecting a shift in the risk trade. The majority still need a lot of work to be operational. Although bottom fishing generally works from mid-June, previous attempts to guess the bottom by fickle names have not fared so well.
At this point, many failed stocks have rallied quite a bit while still facing a lot of resistance.
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What should we do now
The stock market rally continues to advance. This is a time to invest, but with modest performance. The market rally could still slow as the Fed raises rates and the economy is still highly uncertain. Investors should avoid being too concentrated in a particular industry and may want to continue to receive partial early gains. Sector rotations and stock shakeouts are still common.
Work on those watch lists. Lots of stock,…
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