Dow Jones futures dropped marginally overnight, along with S&P 500 futures and Nasdaq futures, as Intuitive Surgical and especially Snap pressured several online giants. The stock market has been rising since Tesla (TSLA) and lower Treasury yields are pushing the Nasdaq higher.
There is growing optimism that the market bottomed out in mid-June. However, the Nasdaq could be poised for a pullback, especially with so many gains expected next week.
In Thursday’s session, Tesla stock rose sharply on profits. The stock has broken through the aggressive buying zone, but now looks extended, although it is still far from the highs.
Key earnings late
Click (SNAP) and Intuitive surgical (ISRG) fell sharply on Thursday due to disappointing results.
SNAP shares plunged 27% after hours, not far from the mid-June bottom. Shares closed up 5.6% to 16.38. Snap reported a loss for the second quarter, which was slightly worse than expected, and revenue was lower than expected. Snapchat’s parent also declined to make third-quarter recommendations. By announcing a $500 million buyback program, Snap will slow down hiring and cut operating costs. All of this is a bad sign for social media firms and firms dependent on online advertising. facebook parent Platform meta (META) lost almost 5%, and parent Google Alphabet (GOOGL) are down 3% from next week’s earnings. trading table (TTD) retreated 7%.
Twitter earnings are due out Friday morning. TWTR shares fell just 2% late Thursday as the contested Elon Musk takeover deal provided some support.
Intuitive Surgical’s earnings fell for the second quarter, while revenue growth slowed for the fourth straight quarter to just 4%. Both skipped screenings as the robotic surgery giant blamed the ongoing impact of Covid on elective procedures. ISRG shares fell 13%, poised to fall below the 50-day line. Intuitive Surgical’s earnings and comments could be a bad sign for other manufacturers of medical equipment, products, and systems.
Promotions near the points of purchase
Ulta Beauty (ULTA), Ollie’s discount store (OLLY) Fortinet (FTNT), Neurocrine Biological Sciences (NBIX) and Quanta Services (PWR) is the formation of reserves.
Ollie’s Bargain Outlet and PWR shares are on the IBD Leaderboard Watchlist. OLLI shares are on SwingTrader. FTNT shares are among the long-term leaders of the IBD. ULTA shares are listed on the IBD 50. Neurocrine Biosciences was named IBD stock of the day on Thursday.
The video embedded in the article discussed Thursday’s market rally and analyzed Tesla shares. Carlisle (KSL) and elf beauty (ELF).
Dow Jones futures today
Dow Jones futures fell 0.1% from fair value. S&P 500 futures fell 0.35%. Nasdaq 100 futures fell 0.7%. ISRG shares are listed on the Nasdaq 100 along with Meta Platforms and Google shares.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze valuable stocks in the stock market rally in IBD Live.
stock market rally
The stock market rally continued to rise, with Tesla and Nasdaq leading the way.
The Dow Jones industrial index rose 0.5% in trading on the stock market on Thursday. The S&P 500 rose 1%, with TSLA stocks gaining the most. The Nasdaq Composite Index rose 1.4%. Small-cap Russell 2000 added 0.5%.
U.S. crude oil prices fell 4.1% to $95.80 a barrel. Gasoline futures fell 4.9%, which suggests that retail prices at gas stations will continue to fall for at least the next couple of weeks.
The 10-year Treasury yield fell 13 basis points to 2.91%. The two-year Treasury yield fell 16 basis points to 3.09%. Jobless claims rose to an eight-month high, while the Philadelphia Fed’s July manufacturing index showed a faster decline in activity. Both raise fears of a recession, but also support expectations that the Federal Reserve will raise rates by 75 basis points next Wednesday rather than a full point.
Among the top-tier ETFs, the Innovator IBD 50 ETF (FFTY) was up 0.4%, while the Innovator IBD Breakout Opportunities (BOUT) ETF was also up 0.4%. The iShares Advanced Technology & Software (IGV) ETF rose 1.8%. The VanEck Vectors Semiconductor (SMH) ETF rose 1.7%.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) edged up 1.75% and the ARK Genomics ETF (ARKG) gained 1.8%, posting strong gains this week. Tesla shares make up the bulk of the Ark Invest ETF.
The SPDR S&P Metals & Mining ETF (XME) was up 0.1% and the Global X US Infrastructure Development ETF (PAVE) was up 1.5%. US Global Jets ETF (JETS) fell 2.7%, while United Airlines (UAL) and american airlines (AAL) scored in the second quarter. The SPDR S&P Homebuilders ETF (XHB) rose 2.1%. The Energy Select SPDR ETF (XLE) fell 1.75%, while the Financial Select SPDR ETF (XLF) gained 0.6%. The Health Care Select Sector SPDR Fund (XLV) rose 1.6%.
Top 5 Chinese stocks to watch now
Tesla’s earnings confidently beat forecasts in the second quarter late Tuesday, with CEO Elon Musk saying the Cybertruck will launch in mid-2023. Shares of TSLA jumped 9.8% to 815.12, breaking through early June resistance and breaking above a trend line that began in early April. An aggressive investor could have bought Tesla stock at the open, but even then it extended from the 50-day line. By Thursday’s close, the stock was 14% above its 50-day. Meanwhile, the electric car giant is still well below its 200-day line and far from its official buy point of 1208.10. At this point, investors may want to see TSLA stock retrace the 200-day line decisively and then form a handle, allowing the major indexes to catch up.
After the shutdown, Bloomberg reported that Tesla was expected to oust Omid Afshar, First Lieutenant Musk, who runs the Texas plant. Tesla’s internal auditors are reportedly checking Afshar for the purchase of suspicious building materials, including a special type of glass. Several Tesla employees have already been fired in the course of the investigation.
TSLA shares fell sharply the day before.
Promotions to view
Shares of Ulta Beauty rose 0.7% to 411.27 on Thursday. The stock has a buy point of 429.58 from a stable base next to a series of bad consolidations since last August. But investors can use Wednesday’s high of 412.50 as a short-term entry. ULTA is up 5.2% from its 50-day line, which is not too wide. Ulta is one of the few cosmetics stocks that are shaping despite less-than-ideal charts.
Shares of Ollie fell 1.2% to 66.50 on Thursday but rebounded slightly from their 21-day MA. This offers the possibility of an aggressive entry or subsequent buy into a closing retailer that broke out of a lower base last month.
Shares of FTNT rose 3.7% to 61.86, returning to their 200-day line. This is an area where Fortinet shares have run into resistance over the past few months. A decisive move above the 200-day period, possibly breaking the July 12 high of 63.56, would provide an early entry or place to start on the long-term IBD leaderboard. The official buy point for FTNT stock is 74.45 after the consolidation that took place at the end of last year, but the stock has been trading in a range for almost a year now.
Shares of PWR rose 0.6% to 133.07, trading 138.56 buying points from an uncomfortable cup-and-handle base, according to MarketSmith analysis. Quanta Services sits just below an early entry at 133.68 within this deep handle. PWR shares are up 8.3% from their 50-day level, so a longer pause could be constructive.
Shares of NBIX rose 0.1% to 97.60. Neurocrine Biosciences has a 100.10 handle cup buy point. Stocks may become active if they break a short trend line within this handle. NBIX shares are currently 5.3% up 50-day.
Market Time with IBD ETF Market Strategy
Market Rally Analysis
The stock market rally continued its strong recent move. Once again, the Nasdaq led the way, though Russell 2000 was somewhat behind on Thursday.
The Nasdaq is back above the 12,000 level and the early June highs are not that far away. The S&P 500 and Russell 2000 indexes, which slightly topped their late June highs, have room before they reach their early June peaks. The Dow is still trading near the highs of late June, but has recovered from a 50-day intraday test.
The Nasdaq has risen significantly over the past week and is close to the upper limit of the regression line. This may signal a pause or an imminent rollback.
This is something to keep in mind as the market faces an avalanche of earnings. In addition to shares in Facebook’s parent company META and shares in Google, Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), ExxonMobil (HOM) and Chevron (CVX) should be out next week along with hundreds of others. They will take center stage at the Federal Reserve meeting.
While Tesla shares soared on the back of profits, Snap and Intuitive Surgical are just some of what investors may see in the coming days.
There are still not many great stocks to buy. While the rise has been wide-ranging, many of the big winners of late have been hard-hit growth stocks such as datadog (DDOG), Nvidia (NVDA) and Tesla shares. Some of the leading areas, such as health insurers and discounters, have retreated this week, in some cases with sharp intraday drops.
Nasdaq-tracking ETFs, software, biotech, and chips are ways to play the uptrend right now.
Why this IBD tool makes it easy to find the best stocks
What to do now
Investors who built up positions last week are probably grateful for this. The market rally at least appears to be a tradable rally. Given that the Nasdaq is growing so fast and looking extended in some respects, some kind of pullback will not come as a surprise. Big news in the hand means that the market and individual stocks could face major swings.
So don’t rush to add exposure. Continue to carefully increase your holdings if the market and your positions continue to work, but don’t be afraid to continue making partial profits quickly.
Look for early buying opportunities and stocks that do not deviate too much from moving averages. In 2022, stocks rising to or above traditional buy points often struggled. Even those names that continue to work can have big intraday swings.
Work on your watchlists by emphasizing strong relative strength. Focus on stocks in or near buy zones.
Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.
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