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Dow Jones Futures: Congress Fast Tracks Biden Stimulus Plan; Apple, Disney Lead 5 Actionable Dow Stocks

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Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The House gave final approval Friday night to a budget resolution that paves the way for President Joe Biden’s $1.9 trillion stimulus plan.




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Apple stock, Walt Disney (DIS), JPMorgan Chase (JPM), Nike (NKE) and Caterpillar (CAT) are five Dow Jones giants in or near buy points.

The stock market rally is looking strong, buoyed by generally strong earnings and Biden stimulus progress. The indexes are at record highs with several new breakouts. Growth stocks overall had powerful week, with software, IPOs, cyclicals, China names and more big winners. Several chip stocks ran into trouble, but the sector did rise.

But the market is getting increasingly extended, among other warning signs.

3 Enterprise Software Leaders Near Buy Points Ahead Of Earnings

Disney earnings are on tap Thursday night, but Apple, JPMorgan and Caterpillar stock have already reported while Nike isn’t due for more than a month.

Apple stock is on IBD Leaderboard. CAT stock is on SwingTrader.

Congress Fast Tracks Biden Stimulus

The House voted Friday night to provide formal, final approval to a budget resolution fast tracks the $1.9 trillion Biden stimulus proposal. The House voted 219-209 on party lines after the Senate approved the resolution early Friday, with Vice President Kamala Harris casting the tiebreaker vote. The House had already approved the budget resolution on Wednesday, but had to OK the Senate’s largely symbolic changes.

The budget resolution means a Biden stimulus plan can pass with a bare majority, instead of needing 60 Senate votes to avoid a filibuster. Democratic lawmakers will start crafting the actual stimulus legislation soon, with final passage possible by late February.

Because of Democrats’ narrow majorities, the Biden stimulus plan could be slimmed down even without any Republican votes. Negotiating with moderate Democrats could also win over some centrist GOP senators.

President Biden cited Friday’s weak jobs report as a reason to swiftly pass his stimulus plan. That thinking is one reason why the stock market rally had a solid session. He’s already signaled he’s willing to lower the income limits on new direct stimulus check, but he’s insisting that each check be $1,400.

Dow Jones Futures Today

Dow Jones futures will open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

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 as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 105.91 million. Covid-19 deaths topped 2.30 million.

Coronavirus cases in the U.S. have hit 27.40 million, with deaths above 470,000.

Stock Market Rally

The stock market rally raced back from the prior week’s sell-off back to all-time highs for the S&P 500, Nasdaq and small-cap Russell 2000. The Dow Jones came within a whisker of record levels. Biden stimulus progress and generally positive earnings reports fueled the market rally rebound.

The Dow Jones Industrial Average rallied 3.9% in last week’s stock market trading. The S&P 500 index rose 4.65%, the Nasdaq composite 6% and the Russell 2000 7.8%.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) jumped 8.1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) leapt 9%.  The iShares Expanded Tech-Software Sector ETF (IGV) rallied 8.1%. The VanEck Vectors Semiconductor ETF (SMH) climbed 3.8%, but stalled after Monday.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Breakout Watch: Stock With 539% Gain Enters New Buy Zone

Dow Jones Stocks Near Buy Points

While growth investors tend to focus on tech and other traditional growth areas, why look at five Dow Jones stocks? Apple is still a growth name, if mature. Disney stock has been rallying on Disney+ and other streaming hopes. Caterpillar and JPMorgan are economic cyclical plays, along with Disney and Nike, that are rallying with hopes for a post-pandemic economic recovery.

More broadly, these stocks, with their heft and different sectors, can offer diversity to a portfolio of highflying IPOs and other volatile growth names.

IBD Stock Of The Day: Is This Covid-19 Play Ready For Another Big Run?

 

Apple Stock

Apple stock rebounded 3.6% last week to 136.76, rebounding from its 10-week line and finding support at its 21-day exponential moving average. Investors could buy AAPL stock now, but it’s close to reclaiming the official 138.89 buy point from a cup-with-handle base. Also, 145.19 could be an alternate entry from a short consolidation above and below the buy point. Finally, investors could use a short trend line from that mini-consolidation, though that Apple stock entry would likely be close to 138.89.

Apple Car buzz heated up last night, with reports that the tech giant is close to a manufacturing deal with Hyundai-Kia on an Apple-branded electric car. But a late Friday report said those talks had stalled, with Apple still considering other automakers.

Nike Stock

Nike stock jumped 8.6% to 145.11, rebounding above the 50-day and 10-week line. Actionable right now, shares of the athletic apparel and shoe giant are close to a 148.05 flat-base buy point.

Caterpillar Stock

CAT stock jumped 5.6% to 193, rebounding from its 50-day line and a prior short consolidation. On Tuesday, Caterpillar stock cleared its 21-day line and a short trend line, offering a buying opportunity that’s still viable. The construction and mining equipment giant has been consolidating for a few weeks that could eventually be a flat base. There is an existing 200.27 three-weeks-tight entry.

JPMorgan Stock

JPMorgan stock leapt 7.2% to 137.98 last week, still within reach of its 10-week line. JPM stock is nearing 142.85 buy point from a cup-with-handle base going back to January 2020.

The 10-year Treasury yield is at 2020 highs, while short-term rates are still rock bottom. That widening yield spread is good news for banks’ core business of borrowing short and lending long.

Disney Stock

Disney stock rallied 7.7% last week to 181.15, rebounding from its 10-week line. DIS stock is still buyable from the 10-week line, but is close to a 183.50 flat-base buy point, according to MarketSmith analysis.

Also, buying ahead of Disney earnings on Thursday is risky.

In Disney earnings, Disney+ subscription growth and other streaming news may continue to be the catalyst for DIS stock. On other fronts, such as theme parks and movie studios, that will require the economy to open up as coronavirus vaccinations hit a critical mass.

Stock Market Rally Analysis

Last week’s rebound was surprising. After the prior week’s sharp losses, more selling, sideways action or a modest bounce seemed more likely. But the stock market rally had other ideas.

Unfortunately, by running back go and beyond the old highs, the Nasdaq is once again looking extended. It’s 7.4% above its 50-day moving average. When that’s 6% or higher, the odds of a pullback are relatively high. Now, the Nasdaq certainly can become more extended. It closed 8.2% above its 50-day line on Jan. 25, just before that week’s losses. In late August, the Nasdaq became increasingly extended, finally closing 11.6% over the 50-day on Sept. 2.

But the more extended the Nasdaq gets above its 50-day line, the greater the risk that the ultimate pullback will be substantial. After Sept. 2, the Nasdaq tumbled in the next three sessions closing below its 50-day line. The composite continued to slide in the September correction.

Other warning signs are out there.

While the stock market rally’s broad-based gains are a positive, there can be too much of a good thing. On Friday, 70% of all stocks are above their 50-day and 200-day lines. That’s unusually high.

Meanwhile, investor leverage is high, with fast-rising margin debt turbocharged by skyrocketing call options.

Big Picture: Market Hits New Highs; Why Investors Cannot Relax Now

What Investors Should Do

Despite those warning signals, the bottom line is that the stock market rally is still healthy, with the major indexes and leading stocks in great shape.

So you don’t need to be defensive, but be cautious about new purchases.

New buys just before a pullback often will run into trouble, forcing investors to quickly cut losses.

At the beginning of a stock market rally, investors might rush to build exposure, much like an old-style Black Friday, with a well-researched shopping list in hand. In the current environment, you need to be more selective, going through the aisles for some limited buys, if any. In fact, you might want to “return” some of your stocks to the market, taking partial profits or cutting laggards or losers.

Are you comfortable with your current level of exposure, and which stocks you’re holding?

Have a game plan for your stocks, so you’ll know what to do in various circumstances. Continue to go through screens, building your watch lists. Investors should always be preparing for new buys, and the process also helps you see which market groups and segments are leading.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Business

Dow Jones Jumps As House Clears Way For Stimulus; GME Stock Crashes Another 27%| Investor’s Business Daily

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The Dow Jones Industrial Average rallied more than 275 points Thursday, as the House cleared the way for the nearly $2 trillion stimulus bill. Apple stock advanced on Apple car buzz. PayPal surged on strong earnings, while Qorvo and Qualcomm dived. GME stock dived another 27%.




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Among the Dow Jones leaders, Apple (AAPL) was up over 1%, while Microsoft (MSFT) fell 0.4% in today’s stock market. Nike (NKE) is approaching a new buy point amid this week’s bullish move.

Tesla (TSLA) threatened to extend Wednesday’s over-2% drop, falling more than 1% in morning trade. Tesla stock is near a new high.

Chip leaders Qorvo (QRVO) and Qualcomm (QCOM) dived on earnings results, while PayPal (PYPL) jumped to all-time highs in Thursday trade.

Among top stocks in or near buy zones, Farfetch (FTCH), Palo Alto Networks (PANW) and ServiceNow (NOW) are in buy range after recent breakouts.

Short-squeeze target GameStop (GME) tumbled as much as 27% in morning trade, while AMC Entertainment (AMC) slid 8%.

Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. ServiceNow was featured in this week’s Stocks Near A Buy Zone.

Dow Jones Today: Stimulus Update

On Thursday, the Dow Jones Industrial Average traded up 0.9%, while the S&P 500 moved up 0.6%. The tech-heavy Nasdaq composite rallied 0.4% in midday trade.

Late Wednesday, the House voted to clear the way for party-line approval of President Joe Biden’s $1.9 trillion stimulus package. The 218-to-212 nearly party-line vote passed a budget bill that would allow the Senate to pass the relief package with a simple majority.

Among exchange traded funds, Innovator IBD 50 (FFTY) traded up 1% Thursday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) rose 0.2%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved up 0.6%.

The 100 Best Stocks Of 2020

Stock Market Pulls Back, Finds Support

Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 finding support near key levels during the current pullback.

Wednesday’s Big Picture commented, “After two straight bullish gains for the S&P 500 and Nasdaq composite, it wouldn’t have been surprising to see some profit-taking Wednesday. That turned out to be the case, as sellers came into the stock market during the final hour trading. The main stock indexes closed with minor changes.”

Due to the recent strength, investors can shift back to an offense stance, with an understanding that there are still good reasons for caution. Look for stocks that are breaking out above new buy points, like Palo Alto Networks and ServiceNow.

Focus on stocks that showed strong relative strength during last week’s sell-off. They could be some of the market’s leaders if the indexes are able to continue their rebounds.

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Dow Jones Stocks: Nike

Dow Jones stock Nike is tracing a new flat base with a 148.05 buy point, according to IBD MarketSmith chart analysis. The stock moved up 0.8% Thursday.

Shares of the retailer recently reclaimed their 50-day moving average line, and are about 6% off their 52-week high.

PayPal Earnings

IBD Leaderboard stock PayPal surged 8% after reporting strong Q4 earnings late Wednesday. PayPal earnings climbed 29% to $1.08 an adjusted share, while revenue rose 23% to $6.12 billion.

PayPal stock is extended after a rebound from its 50-day moving average support level.

Stock Market Earnings: Qorvo, Qualcomm

Top chip stocks Qorvo and Qualcomm both tumbled after reporting earnings after the stock market close Wednesday.

Qorvo reported EPS of $3.08 on revenue of $1.09 billion, beating estimates. Shares declined 5%, falling through their 50-day support level. The stock is about 3% below a 171 buy point in an ascending base.

Qualcomm earnings grew 119% to $2.17 a share, as sales jumped 63% to $8.23 billion. Analysts forecast earnings of $2.10 a share on $8.27 billion in revenue.

Qualcomm stock tumbled over 8% in morning trade. Shares are below their key 50-day line, about 8% below a 161.17 flat-base buy point. The stock triggered the 7%-8% loss-cutting sell rule.

Stocks To Watch: Farfetch, Palo Alto, ServiceNow

New IBD Leaderboard stock Farfetch remains in the 5% buy area above a 65.64 buy point in a consolidation pattern. The buy range goes up to 68.92. Shares lost nearly 2% Thursday morning.

According to Leaderboard commentary, “Farfetch is clearing a narrow consolidation after a solid test of the 10-week moving average and is in buy range. “

Cybersecurity leader Palo Alto Networks is in the 5% buy area past a 375.10 buy point in a flat base. The 5% buy zone goes up to 393.86. Shares dropped 0.7% early Thursday and are just above the new entry.

ServiceNow is in the 5% buy zone above a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis, following Tuesday’s breakout move. Shares moved up 0.1% Thursday morning.

According to IBD Stock Checkup, NOW stock shows a strong 96 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

IBD Live: A New Tool For Daily Stock Market Analysis

GME Stock Short Squeeze

The GME stock short squeeze faltered again Thursday morning, as shares tumbled as much as 27%. Through Wednesday’s close, GME stock had crashed 71% this week.

Among other short-squeeze targets, AMC stock slid over 10% in morning trade, and remains about 60% off its recent high.

Tesla Stock

Tesla stock looked to extend Wednesday’s 2.1% fall, falling about 1% Thursday morning. Shares are just 4% away from all-time highs.

The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.

On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 83% % above a 466 buy point in a cup with handle amid Thursday’s action.

Dow Jones Leaders: Apple, Microsoft

Among the top Dow Jones stocks, Apple rallied over 1% Thursday after reports said the iPhone maker would make an Apple car with South Korea’s Kia. A deal could come Feb. 17 with the electric vehicles launching in 2024, the report added. Initially, Apple and Kia are said to be aiming for 100,000 Apple cars a year.

Shares are again approaching their 138.89 buy point in a cup with handle.

Meanwhile, Microsoft fell 0.4% Thursday morning, easing from all-time highs.

Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is extended past the 5% buy zone that goes up to 239.63.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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Business

Dow Jones Futures Fall As Biden Meets With Republicans; GME Stock Dives 30%

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Dow Jones futures, along with S&P 500 futures, turned lower late Monday amid key coronavirus stimulus talks between President Joe Biden and a group of Republican senators. GME stock plunged 30% amid the ongoing short squeeze. Tesla stock surged on a price-target hike Monday, while Dow Jones leader Apple is again approaching a buy point.




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The stock market recovered from Friday’s sell-off, as the tech-heavy Nasdaq composite surged 2.55%. The S&P 500 rallied 1.6%, while the Dow Jones Industrial Average followed up with a 0.8% gain.

Among the Dow Jones leaders, Apple (AAPL) rallied 1.6%, while Microsoft (MSFT) rose 3.3%. Apple stock remains below its recent buy point, while Microsoft is now just out of buy range.

Tesla (TSLA) recovered from Friday’s 5% sell-off, racing 5.8% higher Monday. Among the Chinese EV leaders, Nio (NIO) fell further below its buy point, while Xpeng Motors (XPEV) remains far from its old highs. Both reported strong January sales. Li Auto (LI) is expected to report January sales in the near future.

Among top stocks in or near buy zones, AdaptHealth (AHCO) broke out past a new buy point and is in buy range, while PayPal (PYPL) continued to rebound from its key 50-day support level. Meanwhile, ServiceNow (NOW) is just under its own buy point.

Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. AdaptHealth was Monday’s IBD Stock Of The Day, while ServiceNow was featured in this week’s Stocks Near A Buy Zone.

Dow Jones Futures Today: Biden Stimulus Talks

After the close Monday, Dow Jones futures and S&P 500 futures slipped 0.1% each vs. fair value. Nasdaq 100 futures were slightly higher vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

At 5 p.m. ET on Monday, President Biden is expected to discuss potential coronavirus stimulus plans with a group of 10 Republican senators at the White House. On Sunday, the group proposed a $618 billion package, far less than Biden’s $1.9 trillion plan. The Republican plan includes new stimulus checks of $1,000 per person, depending on income level.

Among exchange traded funds, Innovator IBD 50 (FFTY) jumped 3.1% Monday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded up 2.5%. Meanwhile, the SPDR S&P 500 ETF (SPY) rallied 1.6%.

U.S. Stock Market Today Overview
Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 30212.37 +229.75 +0.77
S&P 500 (0S&P5) 3773.77 +59.53 +1.60
Nasdaq (0NDQC ) 13403.39 +332.69 +2.55
Russell 2000 (IWM) 210.60 +5.04 +2.45
IBD 50 (FFTY) 44.47 +1.35 +3.13
Last Update: 4:28 PM ET 2/1/2021

Stock Market Pulls Back, Finds Support

Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 trying to find support near key levels during the current pullback.

Friday’s Big Picture commented, “The major stock indexes experienced a sharp sell-off Friday, ending the week on a down note. Top growth stocks were hit hard and the Nasdaq fell through a key support level, resulting in a stock market downgrade.”

Due to the recent weakness, it would be a great time to play some defense. Weakness can snowball, so it’s usually best to get off margin to avoid outsize losses. Meanwhile, you can reduce some exposure by cutting positions that show a loss after recently breaking out.

Focus on stocks that showed strong relative strength during last week’s sell-off. They could be some of the market’s leaders if the indexes are able to rebound.

Stock Market ETF Strategy And How To Invest

Dow Jones Stocks To Buy And Watch: Nike’s New Buy Point

Dow Jones stock Nike is tracing a new flat base with a 148.05 buy point, according to IBD MarketSmith chart analysis. The stock rallied 1.6% Monday.

Shares of the retailer remain below their 50-day moving average line, and about 8% off their 52-week high.

Stocks In Or Near Buy Zones: AdaptHealth, PayPal, ServiceNow

Monday’s IBD Stock Of The Day, AdaptHealth, broke out above a 39.86 buy point in a consolidation base. Shares rallied 4.9% Monday and are in the buy zone that tops out at 41.85.

IBD Leaderboard stock PayPal continues to rebound from its 50-day line, placing the payments leader in a new buy area Monday. The stock rose 3.2% Monday.

According to Leaderboard commentary, “PayPal is trading below a new alternate entry (244.35) and making its first test of the 10-week moving average in 2021.”

ServiceNow is approaching a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares rallied 2.9% early Monday.

According to IBD Stock Checkup, NOW stock shows a solid 94 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

GME Stock Short Squeeze

The GME stock short squeeze faltered Monday, as shares plunged nearly 31% to give back a large portion of Friday’s 67% surge. GameStop (GME) stock slipped as much as 23% before paring some losses in extended trade Monday.

Robinhood continues to limit purchases in short-squeeze targets, like GameStop and AMC Entertainment (AMC). Robinhood customers could only buy one share of GameStop early in the short squeeze, and five options contracts. However, Robinhood raised that to 20 shares on Monday, CNBC reported.

IBD Live: A New Tool For Daily Stock Market Analysis

Chinese EV Leaders: Li Auto, Nio, Xpeng Motors

Li Auto is expected to announce its January sales in the coming days. Li Auto stock is trading below its 50-day line, about 33% off its 52-week high.

Early Monday, Nio and Xpeng Motors reported strong January sales numbers.

In January, Nio grew sales 352% to 7,225 electric vehicles. Nio stock reversed from early gains to edge lower Monday. Shares are below their 57.30 buy point in a cup base.

Meanwhile, Xpeng Motors grew sales 470% to 6,015 electric vehicles. Xpeng stock rallied 2.3% Monday.

Tesla Stock Gets Price-Target Hike

IBD Leaderboard stock Tesla snapped a three-day losing streak Monday, racing nearly 6% higher. Ahead of the stock market open, Piper Sandler upped its Tesla stock price target from 515 to 1,200.

The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.

On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 80% above a 466 buy point in a cup with handle amid Monday’s action.

Dow Jones Leaders: Apple, Microsoft

Among the top Dow Jones stocks, Apple moved up 1.6% Monday, but remains below its 138.89 buy point in a cup with handle. Shares gave up the entry during last week’s sharp weakness.

Meanwhile, Microsoft rallied over 3.3% Monday, recovering the entirety of Friday’s 2.9% decline.

Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is just out of the 5% buy zone that goes up to 239.63.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.

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Business

Dow futures drop 270 points, building on losses after worst week since October

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U.S. stock index futures declined in overnight trading as a surge in speculative trading by retail traders continued to cause hedge funds to take off risk and worried investors about a market bubble. The losses build on last week’s decline, which was the worst for the market since October.

Futures contracts tied to the Dow Jones Industrial Average declined 270 points, indicating a 271-point loss at the opening bell. S&P 500 futures slipped 1%, while Nasdaq 100 futures fell 1.2%.

The Dow dropped 620 points on Friday, or 2%, to close below the 30,000 level for the first time since December. The Nasdaq Composite also slipped 2%, while the S&P 500 fell 1.9%.

For the week, all three major averages slipped more than 3% for their worst weekly performance since October. The Dow and S&P also posted losses for January — the first negative month in four — although the Nasdaq did manage to post a gain for the month.

Friday’s dip came amid a frenzy of activity by retail investors in heavily-shorted stocks including GameStop and AMC Entertainment, which fueled concerns about the overall health of the market. Goldman Sachs noted that the current short squeeze is the worst in 25 years.

“This week’s events may have turned markets on their heads, but fear indicators imply that we may have seen the worst of the degrossing,” Jefferies wrote in a note to clients over the weekend. Barclays added that it’s unlikely that the impact of the short squeezes will ripple through the broader market.

“The ongoing short squeeze in a few stocks by retail investors has raised concerns of a broader contagion,” the firm wrote in a recent note to clients. “While we believe there is more pain to come we remain optimistic that it is likely to remain localized.”

Meanwhile, a group of 10 Republican senators sent President Joe Biden a letter on Sunday, urging him to consider a smaller, scaled down Covid-19 relief proposal. His current plans calls for $1.9 trillion in additional fiscal stimulus. The alternative proposal comes after House Speaker Nancy Pelosi said the chamber will move to pass a budget resolution, the first step toward approving legislation through reconciliation. The process would enable Senate Democrats to approve an aid measure without GOP votes.

Elsewhere, another busy week of earnings is coming up with 99 S&P companies set to report. Alphabet, Amazon, Alibaba, Snap, Exxon, Biogen, Pfizer and Chipotle are among the names set to report this coming week. Thursday is the busiest day of the earnings season.

“We believe the medium-term path for the market remains higher,” noted Mark Haefele, global CIO at UBS Wealth Management. “In a similar pattern to the previous two quarters, corporate earnings for 4Q20 are exceeding expectations by a significant margin.”

He added that a stimulus package as well as investors looking beyond delays to vaccine production and distribution should further boost stocks.

– CNBC’s Jacob Pramuk contributed reporting.

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Business

Dow Jones Today Leads Stocks Higher After Jobs, GDP Data; Apple, Tesla Earnings; New Stocks Join GameStop Flash Rally

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Stocks rallied into Thursday’s open after a volatile premarket session, as markets aimed to claw back some of Wednesday’s losses. An improved reading on weekly jobless claims countered a mild miss in fourth-quarter GDP data. Earnings news stirred early action, with Tesla, Apple, Facebook and American Airlines all active. Trade was halted in GameStop and Koss stock, which tripped circuit breakers as recent flash-investing action widened to new stocks. Meanwhile, Walt Disney and Visa sprung to the top of the Dow Jones today.




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The Dow industrials surged 265 points at the starting bell, up 0.8%. The S&P 500 also soared 0.8%, while the Nasdaq opened to a 0.6% gain on the stock market today.

American Airlines (AAL)  dominted the S&P 500, up 28% but after reporting a narrower-than-projected loss, and becoming another apparent entry to the Reddit investing collective. United Airlines (UAL) and Delta Airlines (DAL) each rose 7%. United topped the Nasdaq 100.

Earnings News: American Airlines, Comcast, ServiceNow Rally

Late-Wednesday/early-Thursday earnings news was all over the map: Apple (AAPL), Facebook (FB), ServiceNow and Lam Research (LRCX) earnings all topped views. Tesla (TSLA) stock stumbled 4.4% lower after earnings fell short.

ServiceNow (NOW) rebounded 2.6% after blowing past analyst expectations with a 22% earnings gain and a 31% rise in revenue for its fourth quarter. The stock is looking to snap a four-day decline, and is trading in a six-week flat base with a 566.84 buy point.

Comcast (CMCSA) rallied more than 4% after topping fourth-quarter views and raising its dividend.

Apple, ServiceNow and Tesla stock are IBD Leaderboard names. ServiceNow stock is also an IBD Long-Term Leader. LRCX stock and Teradyne are IBD 50 stocks.

Chico’s, Tootsie Roll Join The GameStop Flash Rally

Small caps accelerated Thursday, with Russell 2000 futures up 1.1%. At the top of the Russell, apparel retail chain Chico’s (CHS) soared 19% in early trade, after rallying 34.8% on Wednesday.

Trade was halted for GameStop (GME) diving %, in a cooled-off version of the volatile trade that has driven shares up 434% so far this week. GameStop appears to be an early indicator of a new stock market wrinkle, one which pits social media investing collectives against institutional short sellers in technical valuation wars.

Other stocks involved include AMC Entertainment (AMC), Express (EXPR) and Koss (KOSS). AMC and Express shed early gains and dived early Thursday. Koss shares soared 134%.

Two other stocks appeared to have made their way onto the flash-mob radar early Thursday.  Candymaker Tootsie Roll Industries (TR) spiked almost 13%. Tootsie Roll spiked 55% in early trade Wednesday, then narrowed its advance to 11%.

Software developer Ebix (EBIX) rallied almost 12% in premarket trade. Shares ended almost 22% higher on Wednesday. Ligand Pharmaceuticals (LGND) jumped 8%.

Dow Jones Today: Apple, McDonald’s, Dow Earnings

At the top of the Dow, Visa (V) popped 1%, Boeing (BA) bounced back 1.5% from its steep drop on Wednesday.

Apple stock dropped 1.6%, to the bottom of the Dow Jones today, after halving its early decline. The company reported late Wednesday that strong sales of iPhones, wearables and services drove fiscal first-quarter sales and earnings well beyond Wall Street targets.

On Friday, Apple stock broke out of a cup-with-handle base at a buy point of 138.89, according to IBD Leaderboard analysis. Shares continue to trade within the 5% chase zone, which extends to 145.83.

McDonald’s (MCD) traded flat after reporting mixed fourth-quarter results, with earnings below expectations and revenue just meeting analyst targets. McDonald’s shares are basing, but must win a long-term struggle to regain support at their 10-week moving average before they can form the right side of the pattern.

Specialty chemicals maker Dow (DOW) scored a strong fiscal first-quarter win, reporting its first quarterly sales gain and announcing it had reduced debt by $2.6 billion for the year. Dow went public as a restructured entity in April 2019.

Visa (V) bats cleanup on the Dow Jones today, with its fiscal first-quarter report due out after the close.

GDP Misses Target, Weekly Jobless Claims Dip

Fourth-quarter GDP rose 4%, the Commerce Department reported Thursday. That was slightly below the 4.1% pace forecast by economists, on the heels of the pandemic-distorted 33.4% rebound in the third quarter. Personal Consumption Expenditures also increased less than expected, up 2.5% vs. the Econoday consensus of 3%, following the 41% bounce in the third quarter.

First-time unemployment claims took a welcome downturn, with the Labor Department reporting a drop to 847,000 in the week ended Jan. 23. Economists had projected a decrease to 875,000, following two disappointing weeks in which first-time unemployment claims rebounded and held above 900,000.

International trade, retail inventories, new home sales and the Kansas City Federal Reserve’s manufacturing index are among the other reports due out on Thursday.

Dow Jones Today: Testing Support

The Dow Jones today opens in a test of support at its 50-day moving average. Wednesday’s powerful pullback deposited the Dow a fraction above that line, below which the index has not closed since the Nov. 4 start of the current stock market rally. The Nasdaq is also testing support, but at its 21-day exponential moving average. The 21-day line also has been a support level for the Nasdaq since the index’s follow-through day in early November.

The S&P 500 dived below its 21-day line, and may be headed for a test of support at its 50-day line. The index finished a bit more than 1% above that level on Wednesday.

For more detailed analysis of the current stock market and its status, study the Big Picture.

Friday marks the final trading day of January. After Wednesday’s pullback,  the Dow industrials were tracking toward a moderate loss for January, down 1% for the month through Thursday. That is identical to its January performance a year ago, which was just beginning to reflect the impact of the gathering coronavirus storm.

Over the past 21 years, the Dow has gained in 10, fallen in 11 Januarys. In those 11 years, it has averaged a January decline of just over 4%, so even though this year is starting on a down note, it is still above average. A down January doesn’t appear to bode either well or ill for the year, with the market up in five, down in six of the 11 years that opened with a soft January.

The Nasdaq, despite Monday’s sharp pullback, remains up 3% for January. The S&P 500 has a 0.1% loss, and the Russell 2000 is up 6.8% for the month.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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Dow Jones Futures: Stock Market Rally Sells Off; GME Stock, AMC Tumble Late, Apple, Facebook, Tesla Report

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Dow Jones futures were little changed Thursday night while S&P 500 futures and Nasdaq futures fell modestly, as Apple stock, Tesla (TSLA) and Facebook (FB) headlined a huge earnings night. The stock market rally suffered significant losses Wednesday, with selling resuming after the latest Fed meeting. Leading stocks struggled once again.




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Meanwhile, GameStop (GME) more than doubled once again, while AMC Entertainment (AMC) quadrupled as Reddit-led investors continue to rush into GME stock and other heavily shorted tickers. Express (EXPR) and Koss Corp. (KOSS) also had triple-digit gains.

GME stock, AMC stock, EXPR stock and KOSS stock fell sharply overnight as the Wallstreetbets Reddit chat room briefly went privat.

Apple (AAPL), Facebook stock and Tesla reported earnings late Wednesday, along with ServiceNow (NOW) and chip-equipment maker Lam Research (LRCX).

Apple earnings, Facebook earnings, ServiceNow earnings and Lam Research earnings all topped views. Tesla earnings fell short.

In overnight trade, Apple stock fell modestly after closing in range above a buy point. LRCX stock was little changed. NOW stock rose in extended trade. FB stock and Tesla stock retreated.

Apple, ServiceNow and Tesla stock are on IBD Leaderboard. ServiceNow stock is on IBD Long-Term Leaders. LRCX stock and Teradyne are on the IBD 50, along with many other chip plays.

Dow Jones Futures Today

Dow Jones futures were about flat vs. fair value. S&P 500 futures fell 0.15%. Nasdaq 100 futures sank 0.3%. Apple stock weighed on all the major indexes, with Facebook and TSLA stock hitting the S&P 500 and Nasdaq.

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 as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 101.43 million. Covid-19 deaths topped 2.18 million.

Coronavirus cases in the U.S. have hit 26.16 million, with deaths above 439,000.

Stock Market Rally

U.S. Stock Market Today Overview
Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 30302.97 -634.07 -2.05
S&P 500 (0S&P5) 3750.95 -98.67 -2.56
Nasdaq (0NDQC ) 13270.60 -355.47 -2.61
Russell 2000 (IWM) 209.53 -3.77 -1.77
IBD 50 (FFTY) 43.63 -1.84 -4.05
Last Update: 4:04 PM ET 1/27/2021

The stock market rally suffered another retreat, with the major indexes down significantly, finishing close to their lows

Stocks rebounded from morning lows but resumed selling following the Fed meeting announcement. There was only a slight tweak in the Fed statement implying that coronavirus risk is less of a concern in the medium term as Covid cases fall and vaccinations pick up. Fed chief Jerome Powell largely sidestepped questions about whether asset prices are in a bubble, saying his focus is on restoring full employment.

The Dow Jones Industrial Average lost 2.05% in Wednesday’s stock market trading, closing just above its 50-day moving average after briefly undercutting that key level. The S&P 500 index sank 2.6%, knifing through its 21-day exponential moving average and moving close to its 50-day. The Nasdaq composite also sank 2.6%, but stopped short of its 21-day.

While squeeze plays such as GME stock and AMC stock kept soaring, traditional leading stocks had a tougher time.

Dow Jones giant Microsoft (MSFT) and AMD (AMD) reported strong quarterly results and raised guidance late Tuesday. But Microsoft stock erased a solid gain to close up 0.25%, just below a buy point. AMD stock tumbled 6.2%.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 4%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 4.2%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 2.3%, with Microsoft and ServiceNow stock major holdings. The VanEck Vectors Semiconductor ETF (SMH) skidded 4.9%, with AMD and LRCX stocks key components.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Apple Earnings

Apple earnings climbed 34% to $1.68 a share. Revenue rose 21% to 111.43 billion, on strong demand for iPhones, wearables and services. Wall Street had forecast Apple earnings per share of $1.41 on sales of $103.28 billion.

Apple once again declined to give guidance.

Apple stock sank 3% to 137.50 in extended trade. Shares dipped 0.6% to 142.06 in the regular session. Apple stock seems likely to test its 138.89 cup-with-handle buy point, according to MarketSmith analysis.

Tesla Earnings

Tesla earnings shot up 95% to 80 cents a share, weighed down by higher-than-expected stock compensation. Revenue grew 45% to $10.74 billion. Analysts expected Tesla earnings of 90 cents a share on sales of $10.13 billion, according to Zacks Investment Research. Many other estimates had Tesla earnings at just over $1 a share.

Regulatory credits revenue, which is expected to decline sharply, tripled to $401 million.

Gross margins excluding credits were 20.7%, far below views for 24.2%.

The average selling price for Tesla vehicles fell 11% vs. a year earlier amid price cuts. Tesla has continued to cut prices in Europe, while introducing a much-cheaper, shorter range Model Y in the U.S.

Tesla said it’s starting production of a newly revamped Model S and X this month with Model S Plaid deliveries starting in February. It also plans to launch its long-awaited Tesla Semi later this year. That suggests that the Tesla Cybertruck pickup will not launch in 2021. Elon Musk said on the conference call that Tesla would be lucky to make a few Cybertrucks by year-end.

Tesla touted continued big capacity growth, with the Berlin and Austin factories set to begin production sometime in 2021. It expects to grow deliveries 50% annually over time, but outpace that in 2021. That means more than 749,325 vehicles this year, vs. 499,500 in 2020.

But Tesla signaled Q1 will be weak. It blamed the Model S changeover, as well as a chip shortage that’s hitting much of the auto industry. Other data suggest weak U.S. orders to start 2021.

Tesla stock fell 5% overnight. Shares sank 2.1% to 864.16 on Wednesday. Arguably Tesla stock has been in a high-tight-flag pattern

Facebook Earnings

Facebook earnings jumped 52% to $3.88 a share, with revenue up 33% to $28.07 billion. Analysts expected Facebook earnings per share of $3.19 on revenue of $26.4 billion.

Facebook said it had 1.84 billion daily active users in Q4, and 2.8 billion monthly active users.

Facebook stock retreated 2%. FB stock dropped 3.5% to 272.14 on Wednesday, back to its 50-day line. Rebounding above Tuesday’s intraday high of 285.39 could offer a very early entry. The official buy point is 304.77.

ServiceNow Earnings

ServiceNow earnings rose 22% to $1.17 a share, with revenue up 31% to $1.25 billion. Analysts expected ServiceNow earnings of $1.05 on sales of $1.21 billion.

NOW stock rose almost 3% in extended trade. ServiceNow stock lost 3% to 516.50, to close below the 50-day line. A rebound above the 50-day line and last week’s high of 554.34 could offer an early entry. NOW stock is in a flat base with an official buy point of 566.84.

Lam Research Earnings

Lam Research earnings leapt 51% to $6.03 a share. Fiscal Q2 sales grew 34% to $3.46 billion. Wall Street predicted Lam Research earnings of $5.72 a share on $3.333 billion in revenue.

The chip-equipment giant guided higher for the current third quarter.

LRCX stock edged lower overnight. Lam Research stock tumbled 6.8% to 515.04 on Wednesday. LRCX stock retreated to the top of a prior short consolidation, closing just above the 10-week moving average.

GME Stock, AMC Stock

GME stock shot up 135% to 347.51. Melvin Capital and Citron Research said before Wednesday’s open that they closed their GME stock short positions, but the buying frenzy continued. GME stock is up 1,745% in 2021 so far.

AMC stock erupted for a 301% gain to 19.90. EXPR stock vaulted 214% and KOSS stock 480%.

Late Wednesday, the subreddit chat room Wallstreetbets, which has generated mass movements vs. short sellers in GME stock, AMC stock and more, briefly went private Wednesday evening.

Group-chat platform operator Discord banned r/WallStreetBets server. But Discord said it was over hate speech violations, not the GME short squeeze saga.

By 7:45 p.m. ET, the Wallstreetbets subreddit was open again, though the Gamestop forum was closed to new comments.

Overnight, GME stock lost 16% and KOSS stock 14%. AMC stock tumbled 27% and EXPR stock sank 24%.

The moves by GME stock, AMC stock and others are just incredible. A social media-driven short squeeze into a dying mall-based video game retailer and theater chain almost seems like a parody. The risks are extremely high trying to play these stocks — long or short.

Suffice to say that GME stock is not the type of name that CAN SLIM investors usually look at.

Stock Market Analysis

The stock market rally suffered its worst losses in weeks on the major indexes.

While short squeezes like GME stock and AMC stock kept defying gravity and just about everything else, leading stocks struggled once again. It’s possible that hot money is flooding into GME stock at the expense of traditional growth and leading stocks.

But whatever the reason, chips, software, genomics and cyclicals sold off. Many had losses of 5% or more. Some recent IPOs did well, such as Airbnb (ABNB) and Palantir (PLTR), but many others sold off or erased intraday gains.

Leading stocks under pressure is a bad sign for the stock market rally.

Thursday’s action could be another one-day pullback or the start of something more serious. The market reaction to the Apple, Tesla and Facebook earnings reports will be key.

If the Nasdaq rebounds quickly, how much upside would there be? The composite closed 4.8% above its 50-day line, down from 8.2% on Monday. That’s below the 6% level generally seen as extended, but it’s not far from being so.

The Nasdaq has had a few brief, relatively modest pullbacks in the past few weeks. Technically, that eases the pressure in the short run. But quick recoveries convince investors to become even more bullish and less fearful.

The CBOE Volatility Index did jump 38% on Wednesday to a two-month high.

What You Should Do Now

It may take a deeper, longer pullback or correction to drain the market of enthusiasm. That doesn’t have to happen for a while. But investors should be prepared for it.

The risk/reward ratio for being deep on margin is not nearly as strong as in the first several weeks of a new stock market rally. While you don’t need to be defensive, yet, investors should be more focused on preserving their big gains since April rather than trying to step on the gas. So have a game plan for your stocks. Which stocks do you really want to hold and which are expendable?

Also, an exit strategy doesn’t have to be a stampede. You might decide to sell one-third of XYZ stock if it does this, another third at this point, and closing out the position if this occurs.

One advantage of selling into strength or locking in partial gains is that it can give you the confidence to hold through shakeouts and pullbacks, and minimize your losses in a bigger market retreat.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Dow Jones Futures: GME Stock Rockets On Elon Musk Tweet; Microsoft, AMD, Palantir Are Key Movers

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Dow Jones futures and S&P 500 futures rose slightly late Tuesday, while Nasdaq futures rose solidly, lifted by MSFT stock. The stock market rally had fractional losses Tuesday on the surface, but many leaders had a tough session. Microsoft (MSFT) and Advanced Micro Devices (AMD) earnings late Tuesday, while Palantir Technologies (PLTR) held its much-anticipated Demo Day.




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Apple (AAPL), and Tesla stock are due Wednesday night.

Tesla CEO Elon Musk kept GameStop (GME) frenzy going overnight, tweeting out “Gamestonk!!” in reference to the Reddit-led mass short squeeze. GME stock skyrocketed more than 50% overnight in still-massive trade. That’s after soaring 93% to 147.98 in Tuesday’s session, a record close. GME stock hit an intraday all-time high of 159.18 on Monday. GameStop is up 685% already this year.

Bed Bath & Beyond (BBBY) and Dillard’s (DDS), two other short-squeeze plays, jumped 20% Tuesday. BBBY stock kept running overnight.

While tech giants and Tesla stock generally had modest gains, providing support for the major indexes. That masked some losses among leading chip, software, genomics and mining and materials firms.

10 Heavily Shorted Stocks Set For GameStop-Like ‘Squeeze’ Rallies

Key Earnings

Microsoft earnings and sales easily beat views. Microsoft stock rose overnight, signaling a breakout after flirting with a buy point in Tuesday’s session. Amazon.com (AMZN) rose slightly on the Microsoft’s cloud-driven quarter, with AMZN stock near possible early entries.

AMD earnings also easily beat, with the chipmaker also guiding higher. AMD stock tilted lower overnight after some up and down action.

Palantir Demo Day

Palantir Technologies held its much-anticipated Demo Day, where it showcased what its technology could do, including supply chain and data integration. PLTR stock fell modestly overnight. Palantir stock closed down 2.4% to 35.37, just out of range of a 33.60 buy point. But that followed Friday’s 25% spike and Monday’s 11% jump.

Apple, Tesla Earnings On Tap

Looking ahead to Wednesday, Apple stock, Tesla (TSLA), Facebook (FB) and ServiceNow (NOW) are among those reporting. Apple and Tesla stock are in buy range. Facebook stock has crossed over a very early entry. ServiceNow stock is finding support at its 50-day line in a new flat base.

Also, the Federal Reserve meeting concludes Wednesday, with a policy announcement due at 2 p.m. ET. The central bank is expected to leave interest rates and asset purchases unchanged and likely will signal that will remain so for quite some time. It may be a nonevent. Investors will look for hints — if any — about when Fed policymakers might taper bond buys down the road. Commentary about stock and other asset prices would get close attention.

Tesla stock, Apple, AMD, Microsoft, ServiceNow and Palantir stock are on IBD Leaderboard. Apple stock is on SwingTrader. Microsoft stock and ServiceNow are on IBD Long-Term Leaders. AMD and NOW stock are on IBD 50.

Dow Jones Futures Today

Dow Jones futures edged up vs. fair value. S&P 500 futures climbed 0.15%. Nasdaq 100 futures rose 0.6%. Microsoft stock is providing a lift to futures, with several other tech giants also climbing.

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 as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 100.78 million. Covid-19 deaths topped 2.16 million.

Coronavirus cases in the U.S. have hit 25.99 million, with deaths above 434,000. New coronavirus cases, hospitalizations and even deaths have fallen sharply over the last couple of weeks, though they remain high.

The U.S. late Tuesday that it will buy another 200 million doses from Pfizer (PFE) and Moderna (MRNA). It’ll also boost coronavirus vaccine supply to the states by 20% to 10 million a week. After a rocky start, vaccinations have been averaging more than one million a day recently, with expectations that this can ramp up.

Pfizer said it can deliver 200 million doses of its coronavirus vaccine two months earlier than planned. That would be by the end of May.

Johnson & Johnson (JNJ) expects data from its final-stage coronavirus vaccine data by early next week. CFO Joseph Wolk told CNBC that he’s expecting “robust” results. The J&J Covid vaccine takes just one shot and is easier to store than the two-shot vaccines from Pfizer/BioNTech (BNTX) and Moderna. If efficacy and safety data are strong, the FDA could approve the J&J vaccine by early March.

Stock Market Rally

U.S. Stock Market Today Overview
Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 30937.89 -22.11 -0.07
S&P 500 (0S&P5) 3849.55 -5.81 -0.15
Nasdaq (0NDQC ) 13626.07 -9.92 -0.07
Russell 2000 (IWM) 213.31 -1.48 -0.69
IBD 50 (FFTY) 45.47 -0.55 -1.20
Last Update: 4:20 PM ET 1/26/2021

The stock market rally saw slim losses on the major indexes, a quiet session after Monday’s whipsaw action.

The Dow Jones Industrial Average lost about 0.1% in Tuesday’s stock market trading. The S&P 500 index dipped 0.15%. The Nasdaq composite edged down 0.1%, while the big-cap Nasdaq 100 edged higher.

Apple and Microsoft, the two biggest megacaps and members of the Dow Jones, S&P 500 index and Nasdaq composite, provided support for the major indexes. Amazon stock, Facebook, Tesla and AMD also helped.

Growth Stocks Struggle

Despite the solid performance in tech giants and the continued mania in GME stock and other speculative names, leading stocks tended to lag somewhat.

Beneath the surface, many chip, software and genomics stocks suffered significant losses, though it was bloodletting, not a bloodbath.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) retreated 2.3%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 0.6%, with MSFT stock and ServiceNow notable components. The VanEck Vectors Semiconductor ETF (SMH) 1.7%, with AMD stock an exception to the downward shift.

ARK Innovation ETF (ARKK) sank 3.3% and ARK Genomic Revolution ETF (ARKG) tumbled 4.9%. SPDR S&P Metals & Mining ETF (XME) pulled back 2.3%, extending losses since spiking on Jan. 6.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Microsoft Earnings

Microsoft earnings rose 34% to $2.03 a share in the fiscal Q2, accelerating for a second straight quarter. Revenue grew 17% to $43.08 billion, the best gain in at least two quarters. Wall Street expected Microsoft earnings of $1.64 a share on sales of $40.18 billion.

The Azure cloud-computing services saw 50% revenue growth, better than expected. Intelligent Cloud revenue, which includes Azure public cloud, server products, GitHub and enterprise services, advanced 23% to $14.60 billion also topping consensus.

Microsoft provided upbeat sales guidance on the conference call.

Microsoft stock rose 4% in overnight trade, signaling a breakout. Shares rose 1.2% to 232.33 on Tuesday. briefly clearing a 232.96 buy point, according to MarketSmith analysis. MSFT stock closed in buy range of some early entries.

Amazon stock advanced 1% in extended trade. Shares rose 1% to 3,326.13 on Tuesday, closing right around a downward-sloping trend line. Clearing that trend line would be an early entry for AMZN stock, along with 3350.75. Amazon stock has an official buy point of 3,552.35. Earnings are next week.

Apple stock and Google parent Alphabet (GOOGL) also rose about 1% overnight. Both are already in buy zones.

AMD Earnings

AMD earnings jumped 62.5% to 52 cents a share, with sales up 52% to $3.24 billion. Analysts forecast AMD earnings of 47 cents on sales of $3.02 billion.

The graphics and data center chip maker sees Q1 revenue up 79% to $3.2 billion, with full-year sales up 37%.

AMD stock initially rose in extended trade, then reversed slightly lower. Shares edged up 0.6% to 94.71 on Tuesday. That’s slightly above a buy zone from a prior base but in range from the 10-week line. Investors might want to use 99.33 as an entry from a short consolidation.

AMD rival Nvidia (NVDA) was little changed overnight.

Texas Instruments (TXN) and Maxim Integrated Products (MXIM) also beat views late Tuesday. But the two chipmakers fell modestly late.

Apple, Tesla, Facebook Earnings

Wednesday night will be busier than Tuesday, with Apple, Tesla, Facebook and ServiceNow among the big names reporting.

Apple earnings will not only have a big impact on AAPL stock, but on the broader iPhone ecosystem, notably chipmakers. Tesla earnings are important, but the focus will likely be on 2021 delivery targets and updates on the Cybertruck and two factories under construction. For the Facebook earnings report, commentary about political headwinds will be key for FB stock and other social media names. ServiceNow is the first business software pure play that has held up well at a time when many software makers have lost ground.

Apple, Tesla, Facebook and ServiceNow stock are all at or near buy points, raising the stakes. Along with Microsoft and AMD, these leaders could have a huge influence on the stock market rally direction.

Stock Market Rally Analysis

The Nasdaq is now 7.8% above its 50-day moving average, down slightly from Monday’s 8.2%.

The rule of thumb is that when the Nasdaq is more than 6% above the 50-day line, the odds of a pullback are relatively high. But, as the stock market rally has shown in recent days and many times over the past several months, the Nasdaq can keep getting more extended. But the more extended the Nasdaq gets, the higher the risk of a pullback, with greater odds that the retreat will be larger.

In late August, Apple and Tesla stock helped push the Nasdaq higher and higher, finally peaking at 11.6% above the 50-day line on Sept. 2. The Nasdaq then plunged 10% over the next three sessions, closing below the 50-day line, with further losses in the next few weeks.

Meanwhile, bullish sentiment is high, while froth is evident in GME stock and others. It’s possible that hot money, at least among retail investors, is concentrating in GME stock and other squeeze plays, moving away from a wider array of leading stocks and even “traditional” speculative names.

Margin debt is up substantially vs. a year earlier, but the increase is still well below extreme levels associated historically with foreshadowing bear markets. However, leveraged ETFs and the explosion of call options suggests that retail investors are more exposed than margin debt alone would indicate.

An extended market rally, high bullish sentiment, crazy stock moves are warning signs. But weakness in leading stocks is the first one that stings.

Sideways action or a modest pullback over a few weeks would be ideal for the stock market rally. But earnings season in the current environment seems likely to be a catalyst for big market gains or losses — or both. As always, the market is going to do what the market is going to do.

What You Should Do Now

Along with the earnings crush, risks are relatively high for leading stocks and overall market rally. Monday’s short-lived market reversal spurred some sharp losses in growth stocks. They generally fared OK before lagging Tuesday. But if the Nasdaq fell 5% in a day or 10%-15 over a week or two, the losses in many growth stocks, especially IPOs and more-speculative names, could be intense. How would your portfolio handle that action?

Continue to analyze your holdings and overall portfolio. Create a game plan for dealing with negative action in your stocks or overall market rally.

Keep in mind that despite rising warning signs, the stock market rally has been faring well overall, though leading stocks bear watching. Investors may want to be more cautious about adding exposure, sell some shares into strength and quickly cut laggards, but it’s not time to be defensive overall. However, dust off those defense plans.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Dow Jones Futures: Apple, AMD, Nvidia Lead But Stock Market Rally Warnings Grow Louder; Intel Headlines Earnings Movers Late

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Dow Jones futures tilted lower Thursday night, along with S&P 500 futures and Nasdaq futures. The Nasdaq again led the stock market rally to fresh highs, with tech giants Apple stock, Amazon.com (AMZN), Intel (INTC), Advanced Micro Devices (AMD) and Nvidia (NVDA) fueling the gains.




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But the tech-heavy Nasdaq composite is becoming increasingly extended, raising the risk of a pullback.

Key Earnings Late

Intel jumped the gun, reporting earnings just before the close. Intuitive Surgical (ISRG), IBM (IBM) and CSX (CSX) reported quarterly results late Thursday.

Intel earnings and sales beat views while the Dow Jones chip giant also guided higher for Q1. Incoming CEO Pat Gelsinger, who takes over on Feb. 15, committed to keeping the chip giant’s manufacturing business, despite calls from some investors to shed those assets. Intel stock fell 5% overnight. That was after soaring 6.5% to 62.46 on Thursday, with some of those gains coming in the last few minutes on the early earnings release. Intel stock has been running on the announcement Gelsinger, Intel’s former CTO, will become chief executive. But it’s still far from a buy point.

Intuitive Surgical earnings and revenue rose slightly, rebounding from declines in the prior two quarters. The maker of the da Vinci robotic surgical system gave preliminary revenue figures last week. ISRG stock fell slightly in extended trade after closing up 10 cents at 798.67. Intuitive Surgical stock looks set to dip back below a 792.64 buy point. It could try to find support at the 10-week line again as it builds a short consolidation on top of the prior base.

IBM earnings topped views, but sales missed, once again declining vs. a year earlier. IBM stock tumbled overnight after rising 1.2% to 131.65 on Thursday. The Dow tech giant has a 131.98 buy point in a bottoming base. But it’s still in a long-term downtrend, with weak fundamentals for years.

CSX earnings missed while revenue topped. CSX stock was little changed overnight after closing down 1.7% to 91.61, around its 50-day line. An early January breakout from a flat base quickly fizzled, though the 93.80 buy point is still valid, according to MarketSmith analysis.

Why This IBD Tool Simplifies The Search For Top Stocks

Tech Giants Eye Buy Points

As for other tech giants, Apple (AAPL) rose to just below a buy point. Amazon stock climbed toward possible early entries after regaining its 50-day line Wednesday. AMD stock moved back above key levels and within a prior buy zone. Nvidia stock rebounded from key support, but investors likely want to see a little more strength first.

But looming earnings — as well as the extended stock market rally — complicate buying any of those tech giants. Apple and AMD stock have earnings next week. Amazon is also next week. Nvidia isn’t due for a few weeks, but may move on AMD’s earnings and guidance.

Apple, AMD and Nvidia stock are on IBD Leaderboard. Apple stock is on SwingTrader. AMD stock and Nvidia are on the IBD 50.

Find The Best Long-Term Investments With IBD Long-Term Leaders

Dow Jones Futures Today

Dow Jones futures fell 0.2% vs. fair value, with Intel and IBM stock weighing on the blue-chip index. S&P 500 futures lost 0.15% while Nasdaq 100 futures retreated 0.2%.

Bitcoin continued to slide, falling below $30,000 Thursday night, down $10,000 from a week earlier and the all-time high of nearly $42,000 on Jan. 8.

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 as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 98.04 million. Covid-19 deaths topped 2.09 million.

Coronavirus cases in the U.S. have hit 25.18 million, with deaths above 419,000.

Newly reported U.S. Covid cases continue to trend lower, with hospitalizations and deaths also turning down.

U.S. coronavirus vaccinations hit 1.6 million on Wednesday as the pace continues to improve.

President Biden signed new executive orders to increase vaccine production and to impose mask mandates in airplanes and airports, as well as on federal property.

Stock Market Rally

U.S. Stock Market Today Overview
Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31176.01 -12.37 -0.04
S&P 500 (0S&P5) 3853.07 +1.22 +0.03
Nasdaq (0NDQC ) 13530.92 +73.67 +0.55
Russell 2000 (IWM) 212.51 -1.88 -0.88
IBD 50 (FFTY) 46.12 +0.46 +1.01
Last Update: 4:24 PM ET 1/21/2021

The stock market rally continued to advance, once again led by tech giants.

The Dow Jones Industrial Average lost a fraction in Thursday’s stock market trading. The S&P 500 index edged higher. The Nasdaq composite climbed 0.55%. The Nasdaq 100, which includes Apple, Amazon, Intel, AMD and Nvidia stock, popped 0.8%.

Apple stock, a member of the Dow Jones, S&P 500 and Nasdaq composite, rose 3.7% to 136.87. That’s just below a 138.89 cup-with-handle entry. Apple earnings are on Jan. 27.

Amazon stock climbed 1.3% to 3,306.99, flirting with a trend line starting with the Sept. 2 peak. Investors also could use 3,350.75 as another early entry. Amazon earnings are due Feb. 2.

AMD stock rallied 3.1% to 91.53, back above its 50-day and 21-day lines and back above an 88.82 double-bottom buy point. Shares rose 2% overnight after initially falling following the Intel earnings report. AMD competes with Intel in PC microprocessors and data center chips. AMD earnings are due Jan. 26.

Nvidia advanced 3.75% to 554.70, above its 50-day. Several short-lived moves above the 50-day line have fizzled, so investors likely should wait until NVDA stock decisively clears at least the Jan. 11 high of 558.44 before starting a position.

Key ETFs

Growth stocks were mixed, with chips clearly leading.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1% to a fresh all-time high, while the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) edged down 0.4%. The VanEck Vectors Semiconductor ETF (SMH) climbed 1.55%, with AMD, Nvidia and Intel stock all notable components.

IBD Stock Of The Day Hits Buy Zone, Building On Gains

Stock Market Rally Extended

The Nasdaq composite is now 8.1% above its 50-day moving average, picking up from Wednesday’s 7.8% and the highest since Sept. 2. (With Apple stock and other tech giants rallying, the big-cap Nasdaq 100 is now 7% above its 50-day.) Further, the Nasdaq is 4.1% above its 21-day exponential moving average, the most since just after the early November follow-through days.

When the Nasdaq is 6% or more above its 50-day line, that’s a yellow flag. The odds of a pullback are higher. The market doesn’t have to retreat right away, but the more extended it gets, the higher the risk of a significant pullback or correction.

In August, the Nasdaq was generally at least 6% above the 50-day, with Apple stock and Tesla (TSLA) leading a big-cap rally. As of Aug. 25, the index was more than 8% extended, but it kept going. It finally reached 11.6% above the 50-day line on Sept. 2. But on Sept. 3, the Nasdaq plunged 5%, wiping out all the gains after Aug. 25. By Sept. 8, the third day of the pullback, the Nasdaq had wiped out essentially all of August’s gains, closing slightly below the 50-day line. It’s a classic example of the stock market rising on a escalator, falling on an elevator.

Ideally, the stock market rally would move sideways or drift lower over several weeks. Last week the major indexes did retreat modestly, but only enough to bring the Nasdaq from extended to “almost extended.” A bigger pullback or longer sideways action would be helpful.

But, as always, the stock market rally is going to do what it’s going to do.

What Investors Should Do

With that in mind, what should investors be doing? Right now, the stock market rally is working. There’s no need to get defensive. Investors may want to consider selling some stocks into strength, taking some profits. You probably should be cautious about starting new positions and adding exposure, especially if you’re on margin. Breakouts that happen just before a market pullback are highly likely to run into trouble.

Most importantly, have a game plan if the stock market rally does reverse. Where will you take partial profits and which stocks are your core holdings? Then stick to those rules.

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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