Dow Jones futures fell solidly late Thursday, along with S&P 500 futures and Nasdaq futures, as Apple stock, Amazon.com, Facebook (FB), Google parent Alphabet (GOOGL) and Twitter (TWTR) headlined a huge night for earnings.
The stock market rally rebounded Thursday, recapturing some of Wednesday’s sharp losses, fueled by ServiceNow (NOW) and Pinterest (PINS) earnings, along with a Netflix (NFLX) price hike. But the uptrend remains under pressure, with the Dow Jones futures suggesting Thursday’s gains are at risk.
With Thursday night’s earnings tsunami, some uncertainty has lifted but many growth leaders report next week. Also next week, there’s a little thing called Election Day. Coronavirus fears and shutdowns have dragged down the stock market rally, but vaccine news could come in the next couple of weeks.
Apple (AAPL) narrowly beat analyst forecasts, with revenue unexpectedly edging higher. Apple iPhone revenue slightly missed, amid tumbling sales in China. The Dow Jones tech titan also didn’t give guidance for the holiday quarter. Apple stock fell 4% overnight, with iPhone chipmakers Qualcomm (QCOM), Broadcom (AVGO) and others also retreating.
Google earnings soared 62%, crushing views. In extended trade, shares rose 6.5%. Google stock is signaling it’ll clear 1634.22, just above its Oct. 23 peak, offering a buying opportunity. Whether or not investors should buy GOOGL stock in the current market is another issue.
Amazon earnings and sales easily beat, but the e-commerce giant gave mixed guidance for the holiday Q4. AMZN stock fell about 2% overnight.
Facebook easily beat views too, but North America users fell. Shares sank nearly 3%. Facebook stock isn’t too far from a potential 285.34 entry.
Twitter comfortably beat EPS and sales views, but shares plunged 17.5% as user growth fell short.
Apple and Amazon stock are far from buy points, and both tech giants are heading the wrong way overnight.
Data-center chipmaker Monolithic Power (MPWR), Digital Turbine (APPS), Atlassian (TEAM), Starbucks (SBUX), Deckers Outdoor (DECK), Fortinet (FTNT), Five9 (FIVN) and Activision (ATVI) were among the other notable earnings.
ServiceNow is an IBD Leaderboard stock. ServiceNow and Fortinet stock are IBD Long-Term Leaders, while TEAM stock is on the watchlist. Amazon stock, Fortinet, Activision, Atlassian and ServiceNow are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.65% vs. fair value. S&P 500 futures sank 0.8%. Nasdaq 100 futures retreated 1.2%. Apple stock is a Dow Jones, S&P 500 and Nasdaq component, while FANG giants Amazon, Facebook and Google are S&P 500 and Nasdaq giants.
With such big earnings reports, Dow futures could quickly shift if sentiment shifts on say, Facebook stock, by the morning.
Coronavirus cases worldwide reached 45.31 million. Covid-19 deaths topped 1.18 million.
Coronavirus cases in the U.S. have hit 9.21 million, with deaths above 234,000.
U.S. coronavirus cases topped 91,000 on Thursday, passing Wednesday’s record 81,585. Hospitalizations are soaring in the U.S. The death toll is starting to trend higher, but is far below the spring peak.
On Friday, France begins its partial lockdown, followed by Germany closing restaurants and bars on Monday. Apple said it will close 17 of its 20 stores in France.
Stock Market Rally Thursday
U.S. Stock Market Today Overview
Last Update: 4:04 PM ET 10/29/2020
The stock market rally staged a solid rebound Thursday, especially on the Nasdaq.
The Dow Jones Industrial Average rose 0.5% in Thursday’s stock market trading, rebounding intraday from just above its 200-day line. The S&P 500 index climbed 1.2%. The Nasdaq composite advanced 1.6% but finished off intraday highs.
ServiceNow stock jumped 5.5%, continuing a rebound from the 50-day line and reclaiming a 501.92 buy point. The earnings report was a good sign for business software. Netflix stock rose 3.7% as it hiked subscription prices. Pinterest stock erupted for a 27% gain.
Pinterest fueled strong gains for Facebook stock (4.9%), Twitter (8%) and Google (3%) ahead of their results. Apple stock rallied 3.7% and Amazon stock 1.5%.
Facebook and Google stock ran back above their 50-day lines on Thursday, while Apple and AMZN stock finished just below that key level.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.2%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed a modest 0.6%, even with the ServiceNow gain. The VanEck Vectors Semiconductor ETF (SMH) popped 2.5%.
Stock Market Analysis: One Small Step, Not A Giant Leap
Thursday’s stock market rally was a welcome relief, especially for the Nasdaq and other growth stocks, after Wednesday’s damaging losses that came close to triggering a correction call.
That means investors could hold on to their remaining positions but probably shouldn’t be adding exposure back just yet.
All the major indexes remain below their 50-day moving averages.
There are a lot of promising charts from a variety of sectors, but that’s been true for more than a week. If the stock market rally regains strength, there will be a number of breakouts, bullish rebounds and early entries to jump on. But the past two weeks have shown that buying when the market trend is not in your favor is a high-risk strategy.
Dow Jones futures aren’t pointing to a continuation of Thursday’s bounce. More importantly for growth investors, neither are Nasdaq futures with Apple, iPhone chipmakers and Amazon among the losers. Big-cap techs were key drivers of Thursday’s gains.
It’s quite possible that the stock market rally will be in flux through Election Day and beyond. When the market direction becomes clear, it may not be positive.
When the stock market rally takes a small step forward after a long slide, investors shouldn’t take a giant leap.
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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