Dow Jones futures edged lower Thursday night while S&P 500 futures and Nasdaq futures fell modestly as Apple (AAPL) and Amazon stock retreated overnight on earnings.
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The stock market rally rose solidly, closing near highs, with Apple stock and Amazon.com (AMZN) among the regular-session winners. Meanwhile, Facebook (FB), another FAANG play, said it’s changing its name to Meta Platforms, with the FB stock ticker shifting to MVRS.
Apple, Amazon, Atlassian (TEAM), Dexcom (DXCM) and U.S. Steel (X) reported earnings after the close.
AAPL stock fell overnight on mixed Apple earnings. AMZN stock retreated on weak Amazon earnings, sales and guidance. TEAM stock jumped on strong results. DXCM stock was little changed after Dexcom earnings and sales topped. U.S. Steel stock was a notable winner, signaling an early entry, after beating views.
TEAM stock is on IBD Long-Term Leaders.
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Facebook Is Now Meta
As CEO Mark Zuckerberg promised, Facebook is changing its corporate name to reflect a new focus on the metaverse. That name is Meta Platforms Inc.
“The metaverse is the next frontier,” Zuckerberg said at Facebook’s Connect conference on Thursday. “From now on, we’re going to be metaverse-first, not Facebook-first.” Zuckerberg sees a future in which people interact in virtual environments with lifelike avatars, as opposed to in-person or Zoom-type environments.
The existing Facebook, Instagram and WhatsApp platforms will retain their names.
FB stock rose 1.5% to 316.92 on Thursday, but closed off session highs above its 200-day line. Shares had tumbled Tuesday on weaker-than-expected revenue and guidance.
Facebook, with its new name of Meta, will switch from the FB stock ticker to MVRS stock ticker on Dec. 1.
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Dow Jones Futures Today
Dow Jones futures lost 0.1% vs. fair value. S&P 500 futures fell 0.4%. Nasdaq 100 futures retreated 0.7%. Apple and Amazon stock are negatives for Nasdaq futures, but TEAM stock also is on the Nasdaq 100.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Apple Earnings
Apple earnings were mostly in line, though missing some forecasts. Revenue missed, for the first time since 2017 by one measure. CEO Tim Cook said supply issues cut revenue by $6 billion.
Apple stock fell 3.5% in overnight action. AAPL stock rose 2.5% to 152.57 on Thursday. Shares had been moving toward a 157.36 buy point from a cup base, according to MarketSmith analysis.
But Apple stock hasn’t made much progress since its September 2020 peak. The relative strength line, while off its May lows, has been rangebound since that time. That reflects AAPL stock’s middling performance vs. the S&P 500 index.
Apple could lose its position as the world’s most valuable company on Friday to Microsoft.
Amazon Earnings
Amazon earnings and sales came in light. The e-commerce and cloud-computing giant also guided low.
Amazon stock retreated 4% in extended trade. Shares popped 1.6% to 3,446.59, clearing a trend line as they rebounded from their 50-day line. That would have been an aggressive entry for AMZN stock if it weren’t for earnings. Amazon stock has a 3,773.18 official buy point.
Atlassian Earnings
Atlassian earnings and revenue topped forecasts. The collaborative software maker also guided up for the current quarter.
TEAM stock popped 8% overnight, signaling a fresh high. Shares rose 1.1% to 417.33 on Thursday. Atlassian stock is at the top of a short consolidation, finding support at its 21-day line. TEAM stock doesn’t appear to have a good entry now.
But keep an eye on it. Atlassian stock’s RS line is right at record highs.
Dexcom Earnings
Dexcom earnings and revenue were better than expected for the diabetes treatment products maker. DXCM stock edged higher overnight. Shares rose 2.1% to 570.32 on Thursday. Dexcom stock has a 579.10 buy point from a flat base. Investors could use 573.75 as a slightly earlier entry for DXCM stock.
Tandem Diabetes (TNDM) and Insulet (POOL), two other diabetes products makers, report next week.
U.S. Steel Earnings
U.S. Steel earnings easily beat EPS views and topped on revenue too. The steel giant also hiked its dividend.
X stock jumped 7.5% in overnight trade. Shares edged up 0.3% to 23.38 on Thursday, below their 50-day line and just above their 200-day line. U.S. Steel stock is signaling a move above its 50-day line, with Tuesday’s high of 25 serving as an early entry from a trend line and the 50-day.
Stock Market Rally
The stock market rally had a solid session and finished near highs, a reversal from the prior two sessions.
The Dow Jones Industrial Average climbed 0.7% in Thursday’s stock market trading. The S&P 500 index rose 1%. The Nasdaq composite jumped 1.4%. The small-cap Russell 2000 rallied 2%.
The 10-year Treasury yield rose 4 basis points to 1.57%, snapping a four-day losing streak.
Crude oil futures slashed intraday losses to close fractionally higher Thursday. Natural gas futures fell solidly. Copper futures rose modestly.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) popped 2.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) was up 1.4%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.2%. The VanEck Vectors Semiconductor ETF (SMH) rose 1.9%%.
SPDR S&P Metals & Mining ETF (XME) advanced 0.9% and Global X U.S. Infrastructure Development ETF (PAVE) climbed 1.9%. U.S. Global Jets ETF (JETS) rose 0.8. SPDR S&P Homebuilders ETF (XHB) rallied 1.9%. The Energy Select SPDR ETF (XLE) reversed higher to close up 0.7% and the Financial Select SPDR ETF (XLF) finished 1.2% higher.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 2.6% and ARK Genomics ETF (ARKG) jumped 3.5%.
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Market Rally Analysis
The stock market rally shrugged off the prior two days of closing at lows, rallying solidly on Thursday. The Nasdaq composite hit a record high, with Apple and Amazon stock rallying into earnings and Tesla stock continuing to advance. But unlike Wednesday, there were broad-based gains, with growth leading the way.
The major indexes are up solidly so far this week. A lot of that has to do with Apple stock, Amazon, Microsoft (MSFT), Tesla (TSLA) and Google parent Alphabet (GOOGL). Underneath the surface were some nasty reversals or whipsaw action among individual stocks and some sectors.
Still, on Thursday advancers led decliners by 2-to-1 or better, reversing from Wednesday’s weak action.
Tech futures suggest that the Nasdaq at least may run into some trouble on Friday.
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What To Do Now
It’s a good idea to build up exposure early in a confirmed stock market rally. The big winners often are quick to flash buy signals and then blast higher as the market overall has momentum.
But after a few weeks, investors may want to add exposure incrementally, picking their spots on new buys while also taking some early profits and cutting losers. The early leaders are extended while also-rans come to the fore while the broader market rally slows its pace or hits resistance.
The April-September 2020 market rally was unusual because it was so strong for so long, making it easy to rack up huge gains, even when breaking the rules.
The current stock market rally may be more typical.
The Nasdaq briefly hit resistance this week with a number of breakouts struggling. Meanwhile, it’s the middle of earnings season. A number of stocks have broken out or triggered early entries just before quarterly results, making them highly risky. A number of other stocks are setting up, but with earnings in the coming days. Earnings gaps up have been suspect this week, though some have worked.
Meanwhile, the Fed taper decision next week and key economic data add to market uncertainty in the very short run.
Of course investors who bought in mid-October as the market rally gained traction generally are doing well. The recent gyrations aren’t having much impact, especially with the overall trend continuing.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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