Dow Jones futures turned slightly higher overnight, while S&P 500 futures fell modestly and Nasdaq futures declined sharply, as Apple (AAPL) and Amazon stock led key earnings late Thursday. Exxon Mobil (XOM) and Chevron (CVX) are due early Friday.
The stock market rally attempt gained steam as Facebook parent Meta Platforms (FB) surged and a number of other beaten-down former tech leaders rebounded. Dow giant Merck (MRK) and Eli Lilly (LLY) rallied on earnings, both flashing buy signals.
Tesla stock edged lower Thursday, but after slashing big intraday losses. Late Thursday, CEO Elon Musk disclosed he sold more than four million shares in the prior two days.
Apple stock and Amazon.com (AMZN) reported earnings after the close, along with Intel (INTC) and Atlassian (TEAM). But aside from Apple, all of these stocks are well off highs.
Along with oil majors Exxon and Chevron, medical giants AbbVie (ABBV) and Bristol Myers Squibb (BMY) report before Friday’s open. XOM stock and Dow giant Chevron are near buy points. ABBV stock is finding support at its 50-day line while Bristol Myers is at its 21-day, both after strong advances.
Tesla (TSLA) and LLY stock are on IBD Leaderboard. MRK stock is on SwingTrader. TEAM stock is on IBD Long-Term Leaders. Exxon Mobil, Chevron and BMY stock are on the IBD Big Cap 20. Merck was the IBD Stock Of The Day.
The video embedded in this article discusses the strong market rebound and analyzes FB stock, Merck and Eli Lilly.
Dow Jones Futures Today
Dow Jones futures rose 0.15% vs. fair value, even with Apple and Intel stock hitting blue chips. S&P 500 futures sank 0.3%. Nasdaq 100 futures retreated 0.95%, as Apple and AMZN stock and other tech earnings losers were drags. Those are all well off Thursday night’s worst levels.
The 10-year Treasury yield fell 4 basis points to 2.82%.
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
Apple earnings and revenue topped forecasts, amid strong iPhone sales. The Dow Jones tech giant OK’d another $90 billion for AAPL stock buybacks, and upped its dividend by 5% to 23 cents a share. Apple stock initially rose modestly after hours, but then reversed lower after warning of a $4 billion-$8 billion headwind this quarter from the ongoing China shutdowns. AAPL stock is down 2% overnight.
Shares popped 4.5% to 163.64 in Thursday’s regular session, reclaiming the 200-day line. AAPL stock has a 179.71 buy point from a handle that’s very large for a consolidation that’s only 18% deep. Arguably, there’s an early entry from a short trendline slightly above the 50-day moving average. The relative strength line for Apple stock is not far from highs, a reflection of broad market weakness.
Amazon reported a big Q1 loss, reflecting the declining value of its Rivian (RIVN) stake. Revenue slightly missed. Amazon Web Services slightly topped revenue targets. But Amazon guided low on Q2.
AMZN stock dived nearly 9% in extended trade. Shares popped 4.65% on Thursday to 2,891.93, but have been trading near their lowest levels since mid-2020.
Intel earnings narrowly topped views. But the struggling chip giant guided low on Q2 EPS and sales. INTC stock sank 4% in extended action. Shares rose 3.6% on Thursday to 46.84.
Atlassian earnings beat consensus. But the collaboration software maker guided low on current-quarter EPS. TEAM stock fell 6% overnight. Atlassian stock jumped 6.7% on Thursday to 259.98.
Merck stock rose 4.9% to 88.58 following better-than-expected earnings. MRK stock technically is still below an 89.58 cup-with-handle buy point, according to MarketSmith analysis. But shares broke the downtrend of the handle and it turned in its best close since early November. The RS line for MRK stock is the highest since January 2021.
Eli Lilly Stock
Eli Lilly stock popped 4.3% to 297.27 on its Q1 earnings. After round-tripping a cup-base breakout earlier this month, LLY stock headed into earnings just above the 284 buy point. Shares are still in the buy zone, but also broke a short-term downtrend and moved above their 21-day moving average.
Elon Musk Sells Tesla Stock
Musk, in SEC filings Thursday night, disclosed he sold 4.415 million Tesla shares worth nearly $4 billion on Tuesday and Wednesday. On Tuesday, TSLA stock plunged 12.1%. Musk tweeted late Thursday that he’s done selling shares.
Will TSLA stock rebound with Musk sales literally priced in?
Musk’s disclosures came too late for after-hours trading.
It’s likely that Musk is selling the shares to help pay for the Twitter takeover.
Shares dipped 0.45% to 877.51 on Thursday, but had to be dragged to that point by a big market rebound. Intraday, TSLA stock fell as low as 821.70. Technically, Tesla still has an 1,152.97 cup-with-handle buy point, but the chart looks damaged with shares below key moving averages.
Stock Market Thursday
The stock market rally attempt wobbled initially but then picked up momentum.
The Dow Jones Industrial Average ran up 1.85% in Thursday’s stock market trading. The S&P 500 index leapt 2.5%. The Nasdaq composite gained 3.1%. The small-cap Russell 2000 rose 1.8% after hitting a fresh 52-week low intraday.
U.S. crude oil prices popped 3.3% to $105.36 a barrel. The 10-year Treasury yield rose 4 basis points to 2.86%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 1.4%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 4%. The VanEck Vectors Semiconductor ETF (SMH) soared 5.7%.
SPDR S&P Metals & Mining ETF (XME) bounced 1.85% and the Global X U.S. Infrastructure Development ETF (PAVE) 1.9%. U.S. Global Jets ETF (JETS) ascended 2%. SPDR S&P Homebuilders ETF (XHB) popped 2.8%. The Energy Select SPDR ETF (XLE) gained 3%, with XOM stock and CVX stock major components. The Financial Select SPDR ETF (XLF) rose 1.3%. The Health Care Select Sector SPDR Fund (XLV) climbed 1.4%, with ABBV stock and Bristol Myers big holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) declined 1.4% and ARK Genomics ETF (ARKG) 3.5%, both hitting 24-month lows intraday. The Teladoc Health (TDOC) crash weighed on both funds. Tesla stock remains the No. 1 holding across Ark Invest’s holdings.
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Market Rally Analysis
The stock market finally got a strong session, with powerful price gains across the board. But it’s just one day. The best one-day percentage gains in stock market history are in bad markets.
The Nasdaq has now started a new stock market rally attempt, while Thursday was day two for the Dow Jones and S&P 500. If the major indexes hold their recent lows, investors could look for a follow-through day to confirm the new rally as soon as next week. As a practical matter, it seems unlikely that a follow-through day would occur before the Federal Reserve’s two-day meeting ends next Wednesday.
For now the market remains in a correction.
A lot of Thursday’s big winners were beaten-down techs rallying on not-as-bad-as-feared earnings — such as Facebook, PayPal (PYPL) and ServiceNow (NOW) — but nowhere close to buying opportunities. Merck and LLY stock were welcome exceptions.
But relief rallies can quickly fade, with Apple and Amazon leading futures lower overnight.
Energy, steel, fertilizer groups remain resilient, along with defense stocks. Drugmakers and health insurers are looking strong. Travel names are still interesting.
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What To Do Now
Thursday’s market action doesn’t matter. What matters is what comes next. If the major indexes soon charge to new lows, then Thursday is just a blip in an ongoing correction or bear market. If the major indexes continue higher and confirm a new market rally, that is meaningful.
Investors with little or no exposure could have bought MRK stock or Lilly on Thursday. Another option would be to buy a broad market ETF, hoping for at least a short-term bounce. But if you’re going to make new buys before a follow-through day, keep the exposure minimal, and be extremely nimble. Take partial profits quickly and be ready to exit.
Being 100% in cash is still a sound strategy.
Your primary goal right now is to be ready when the market turns. Build up those watchlists. They’ll need revising as earnings season and recent market losses lift some names and drag down others.
And stay engaged. You don’t have to stare at your screens watching the market nonstop, but keep tabs so you won’t be caught off guard.
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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