Dow Jones futures edged higher early Wednesday, while S&P 500 futures and especially Nasdaq futures fell as Treasury yields hit 13-month highs ahead of this afternoon’s Fed meeting announcement.
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The stock market rally finished narrowly mixed Tuesday after the Nasdaq closed well off intraday highs. Plug Power (PLUG) and CrowdStrike stock headlined key overnight movers.
CrowdStrike (CRWD), Coupa Software (COUP), Smartsheet (SMAR) and Lennar (LEN) headlined earnings late Tuesday, with Chinese e-commerce giant Pinduoduo (PDD) reporting early Wednesday. Plug Power stock plunged on accounting isues.
Microsoft stock, MKS Instruments (MKSI), Applied Materials (AMAT) and Apple (AAPL) iPhone chipmakers Qorvo (QRVO) and Skyworks Solutions (SWKS) all flashed buy points at least intraday.
Chip-equipment maker MKS Instruments broke out past a buy point Tuesday. Chip-gear giant AMAT stock flashed an early entry, along with wireless chipmakers Qorvo and Skyworks Solutions.
Microsoft (MSFT) rose, flashing additional buy signals. Google parent Alphabet (GOOGL) also climbed slightly and is potentially actionable. Apple stock and Facebook (FB) rose but may need more repair time.
Amazon.com (AMZN) closed near lows, stuck around its 200-day line. Tesla (TSLA) hit resistance and retreated, still well below its 50-day line.
All of these stocks came off highs, with some closing near session lows as the Nasdaq lost steam.
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Plug Power Stock Dives
After the close, Plug Power said it would have to restate 2018 and 2019 financial statements, as well as quarterly statements for 2019 and 2020. The fuel cell company cited accounting errors related to non-cash items, including some costs. But it said there was no misconduct. PLUG stock plunged 16% in premarket trading. Shares sank 8.1% on Tuesday, hitting resistance at its 21-day line.
Key Earnings
CrowdStrike earnings and revenue were better than expected, while the cybersecurity leader also guided higher. CRWD stock gained 3% early Wednesday. Shares hit resistance at the 21-day line Tuesday and reversed lower for a 2.1% loss.
Coupa earnings and sales also topped views. COUP stock edged lower in premarket trade after rising late Tuesday. Shares fell 3.5% on Tuesday.
Smartsheet earnings and revenue beat forecasts. SMAR stock advanced 2% before the open. Shares rose 1.4% on Tuesday to 68.71, backing off key levels intraday.
Pinduoduo reported a smaller-than-expected loss while revenue surged 163%, far above estimates. PDD stock lost 4% early Wednesday after rising 1.1% to 160.89 on Tuesday.
CRWD stock, Coupa stock and Smartsheet, along with Pinduoduo, are former leaders that sold off sharply in the recent tech sell-off. They all closed below their 50-day moving averages, with COUP stock below its 200-day line.
Lennar earnings also exceeded analyst estimates. LEN stock edged lower in premarket trade. Shares fell 1.5% to 88.71. Lennar stock is several weeks into a consolidation next to a prior base. A move above last week’s high of 92.85 — the top of a quasi-handle — could offer an early entry.
Google stock and Microsoft are on IBD Leaderboard. AMAT stock and Google are on SwingTrader and the Big Cap 20. MSFT stock is an IBD Long-Term Leader. Google, SWKS and TSLA stock are on the IBD 50. MKSI stock was Tuesday’s IBD Stock Of The Day.
Fed Meeting In Focus
The Federal Reserve will end its two-day policy meeting Wednesday, with an announcement at 2 p.m. ET. Investors will be looking for clarity from the central bank and Fed chief Jerome Powell regarding inflation and rising Treasury yields, which have hit growth stocks. Will the Fed enact, or signal a move toward, reviving “Operation Twist” to drive down long-term Treasury yields? While the Fed has said it’s far away from even curbing bond buys, will policymakers signal optimism about the economic outlook, worrying traders?
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures fell 0.3% while Nasdaq 100 futures retreated 1.1%.
The 10-year Treasury yield rose several basis points to 1.67%, at 13-month highs.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts and special guest David Ryan as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 121.39 million. Covid-19 deaths topped 2.68 million.
Coronavirus cases in the U.S. have hit 30.23 million, with deaths above 549,000.
Moderna (MRNA) has begun dosing children aged six months to less than 12 years old with its coronavirus vaccine in a phase 2/3 study. Moderna and Pfizer (PFE) are already testing their vaccines in older children.
Stock Market Rally
U.S. Stock Market Today Overview | ||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32824.90 | -128.56 | -0.39 |
| S&P 500 | (0S&P5) | 3962.64 | -6.30 | -0.16 |
| Nasdaq | (0NDQC ) | 13471.57 | +11.86 | +0.09 |
| Russell 2000 | (IWM) | 230.44 | -3.98 | -1.70 |
| IBD 50 | (FFTY) | 47.21 | -0.25 | -0.53 |
Last Update: 4:06 PM ET 3/16/2021 | ||||
The stock market rally closed with minimal changes but it was a disappointing day for the Nasdaq and growth names.
The Dow Jones Industrial Average fell 0.4% in Tuesday’s stock market trading. The S&P 500 index dipped 0.1%. The Nasdaq composite edged up 0.1%, after rising as much as 1.2% intraday and briefly turning negative. The small-cap Russell 2000 sank 1.7%.
10-year Treasury yield rose 1 basis point to 1.62% after dipping intraday to 1.585%.
Financials, airlines and commodity plays pulled back while growth names faded to close mixed.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) lost 0.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) sank 0.9%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.5%, with MSFT stock its top holding. The VanEck Vectors Semiconductor ETF (SMH) gained 1.1%, with Qorvo and SWKS stock both notable components.
Reflecting more-speculative story stocks, Ark Innovation ETF slid 1.7% and Ark Genomics ETF 2.2%. Tesla stock is the top holding across Ark Investments’ ETFs. Ark Invest bought some PDD stock ahead of its earnings.
Tech Titans
Microsoft stock rose 1.2% to 237.71, rebounding from its 21-day exponential moving average and 10-week lines once again. Shares are still in range from the 232.96 buy point, according to MarketSmith analysis. MSFT stock is on track to have a flat base at the end of this week with a 246.23 entry.
Google stock advanced 1.4% to 2,083.89, once again rebounding from its 21-day line. Shares got to 2,113.68 intraday, just below very recent highs. Investors could take an early entry at current levels or above Tuesday’s highs. The official buy point is 2,145.24 from a three-weeks-tight pattern — or a flat base after this week.
Apple stock climbed 1.3% to 125.57, above its 21-day line and breaking a downtrend. But the iPhone giant is still below its now-falling 50-day.
Facebook stock rose 2% to 279.28, continuing a rebound from its 10-, 21-, 50- and 200-day lines. FB stock got right to a trend line starting with the Aug. 26 all-time high of 304.67. Investors could buy Facebook if it gets above Tuesday’s high, but they might want to wait for shares to at least clear the Jan. 28 peak of 286.79.
Amazon stock edged up 0.3%, but hit resistance at its 200-day.
Tesla stock fell 4.4% to 676.88, hitting resistance at its 21-day line. It’s still significantly below its 50-day line and its Jan. 25 peak of 900.40. TSLA stock fell 3% early Wednesday.
This could be just a breather for Tesla stock stock, which jumped 16% last week. But perhaps not.
While TSLA stock is struggling to rebound, Volkswagen (VWAGY) has been soaring as it announces big EV targets in 2021 with major battery investments. VWAGY stock jumped 10% on Tuesday to its best level since 2009. Shares are up 57% so far in 2021.
Chip Stocks In Buy Zones
MKSI stock popped 3.4% to 177.91, just closing above a 177.46 double-bottom buy point after reaching 182.14 intraday.
AMAT stock rose 3.15% to 118.50, rebounding from its 21-day line and breaking a short downtrend. It’s 7% above its 10-week line, still in range.
Qorvo stock rose 1.3% to 180.54, near the day’s lows after hitting 185.76 intraday. Shares did close above a downtrend and it’s only 3.1% above its 10-week average. But investors might want to wait for Qorvo stock to move back above the March 2 high of 182.75. Also, the 5G chipmaker has an official 191.92 consolidation buy point.
SWKS stock rose 1.3% to 181.04, closing near session lows. But shares broke a downtrend and continued a rebound from the 10-week line, just 3.6% above that key level. The wireless chipmaker held up well in the tech sell-off, not losing sight of its 50-day/10-week lines.
Stock Market Rally Analysis
The Nasdaq moved a bit further above its 50-day line, though closing well off intraday highs. More tech stocks, especially chips, are setting up again.
But highly valued or speculative growth names generally have more work to do. That includes Tesla stock, Plug Power, CrowdStrike and others that have rebounded off recent lows, as well as names such as Zoom Video (ZM) that haven’t bounced much at all. In general, investors want to focus on stocks above their 21-day and 50-day averages.
Meanwhile, the Dow Jones and Russell 2000 fell, but after long winning streaks.
Many economy reopening plays, including travel, energy and mining, saw pullbacks Tuesday. But generally those sectors are still doing well.
Ideally, the stock market rally will show broad leadership, across a range of growth and real economy sectors. But it could be that the market will rotate back to techs, or that techs will falter once again.
Investors should be taking advantage of the resumed market uptrend, with many quality stocks breaking out or offering early entries. In this broad but uncertain stock market rally, diversifying your portfolio is especially important. Buy leading stocks from leading sectors, as always, but make sure there’s some variety. That will help you avoid big portfolio losses while also keeping you in tune with a variety of sectors.
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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