Dow futures tilted higher overnight, with S&P 500 futures and Nasdaq futures rising as Meta Platforms.meta) And service now (now) Another big night headline for earnings.
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The stock market ended mixed Wednesday, as Microsoft (MSFT) Its earnings rose 7%, which also lifted cloud software and some AI plays. But elsewhere, the market was generally negative.
First Republic Bank (FRC) continued to fall to new lows as the Bank of California and regulators aim to avoid bank forfeiture, but with little good results for FRC stock investors.
Meta Origin Platforms on Facebook and Instagram, ServiceNow, alignment technique (ALGN), Meritage Homes (MTH) And demon (bye) reported late Wed.
Mita shares jumped of late. But NOW stock fell modestly and Align Tech fell strongly. PI stock fell. Meritage was not active.
Mobileye (MBLY), Crocs (CROX), merck (Mrk), Eli Lilly (LLY), Apve (ABBV) And Master Card Credit Card (Master’s) report early Thursday. All of these stocks are at or near points of purchase.
Meta stock and Meritage Homes running stock IBD Leaderboard. Mobileye and MTH stocks are on file defect 50. MBLY stock is also on file IBD Big Cap 20.
Dow jones futures today
Dow futures advanced 0.1% against fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.55%.
The Commerce Department will release its preliminary estimate of GDP for the first quarter at 8:30 a.m. Thursday. Economists expect to see a 2% annual gain. The report will also include inflation data for the first quarter which will give strong clues about the measure of personal consumption expenditures prices on Friday in March.
The Labor Department will release weekly unemployment claims data at 8:30 a.m
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Meta earnings
Meta earnings comfortably topped Views, with revenue rising for the first time in four quarters. The social giant was also guided by its second quarter revenue.
Meta shares jumped 12% overnight. Shares rose 0.9% to 209.40 in the regular Wednesday session, as the tech giants rebounded on Microsoft’s results. But Meta closed near session lows, below the 21-day line.
Other major earnings
ServiceNow earnings topped views with the business software giant also driving subscription revenue. NOW stock initially rose but then reversed, falling 2% overnight. Shares rose 2.7% to 454.03 on Wednesday, retracing the 50-day line but only recouping part of Tuesday’s 6.5% decline. ServiceNow has a point of purchase of 485.68 cups with handles.
Meritage Homes earnings topped views. MTH stock is not yet active in extended action. Shares fell 2.5% to 121.85 on Wednesday, but are still close to their all-time high set on April 20 at 130.68. Meritage stock has a consolidation entry of 117.32, with a 5% buy zone extended to 123.19.
Earnings outpace views with Invisalign maker driving Q2 revenue. ALGN stock is down 8% in the extended business. Shares rose 0.9 percent to 354.55 on Wednesday. Align stock works out at 368.97 buy points, according to MarketSmith.
Impinj’s earnings slumped while the tracking chip maker also delivered downward guidance for the current quarter. PI stock fell 26% in overnight trading. Shares fell 0.5 percent to 135.32 points. Impinj stock is consolidating with 145 buy points.
Meanwhile, MBLY stock is approaching a buy handle point heading into Thursday’s earnings report. LLY declined to around 375.35 buy points while Mastercard, Merck and ABBV declined without the official entries. CROX stock is technically in a buy range, but it extends from the early entry and the 50-day line.
Stock market rise
The stock market started higher, supported by Microsoft, but weakened throughout the session, closing mixed amid negative breadth.
The Dow Jones Industrial Average fell 0.7% in stock market trading Wednesday. The S&P 500 fell 0.4%. The Nasdaq Composite closed up 0.5%. Small-cap Russell 2000 sank 0.9%.
US crude oil prices fell 3.6% to $74.30 a barrel, the lowest level in four weeks.
The 10-year Treasury yield rose 3 basis points to 3.43%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) decreased by 0.75%. iShares Expanded Technology and Software ETF (IGV) rose 0.3%, with Microsoft shares and large IGV holdings NOW. VanEck Vectors Semiconductor Corporation (SMH) rose 0.7%.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(Sinking 1.9% and ARK Genomics ETF)ARKG) 1.4%.
SPDR S&P Metals & Mining ETFs (XME(down 1.1% and the US X Global Infrastructure Development Fund (ETF) )cradle) 1.6%. US Global Gates Foundation ETF (Planes) went down 1%. SPDR S&P Homebuilders ETF (XHB) gave up 1.4%. Energy Defined Fund SPDR ETF (xle(down 1.3% and SPDR Health Care Sector Selection Fund)XLV) fell 1.4%. LLY, Merck, and AbbVie stocks are all important XLV holdings. ALGN stock is also on the XLV.
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First Republic, other bank stocks hit
FRC stock fell 30% on Wednesday to 5.63, hitting an all-time low after crashing 49% on Tuesday as First Republic Bank disclosed a massive deposit flight in the first quarter. The California-based bank was looking for banking giants to buy many of its assets at above-market prices. dirty? Buy these assets at above-market prices to avoid the FDIC taking control of First Republic and eventually charging huge fees to the big banks to make up for the losses. Any asset sales — or a First Republic sale outright — will likely need some kind of government guarantee or incentive.
The FDIC may be wary of protecting all First Republic deposits because that includes the $30 billion that has been pumped before. c. B. Morgan Chase (JPM) and other giants last month. But failure to do so in the event of the collapse of the First Republic is likely to lead to a massive outflow of bank deposits.
If the assets are sold, First Republic may then issue more shares at lower prices.
while, Backwest Bancorp (PACW) jumped by 7.5% after disclosing the stability of deposits and even a slight increase in the past few weeks.
Notably, regional banks generally rose on Wednesday while the giant banks declined.
SPDR S&P Regional Banking ETF (Creates) rose 0.6% after falling Tuesday to its lowest level since late 2020. Shares of FRC and PacWest are components of KRE.
SPDR Financial Selection Fund (45), which was dominated by financial giants, up 0.95% for the fifth consecutive session. JPM stock, not far from the highs, fell 1.8% to 135.23 on Wednesday, testing the 50-day line.
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Market rally analysis
The stock market rally went into an “uptrend under pressure” on Tuesday, and Wednesday’s move didn’t really change that.
The Nasdaq Composite, which is fueled by Microsoft, rebounded from the 50-day line but ran into resistance at 21-days. On Tuesday, the Nasdaq fell 2%, closing below its follow-up day low on March 29. This is a bearish signal for the market to go up.
The S&P 500, after quickly reaching the resistance of the 21-day line, fell modestly, approaching the 50-day line. The Dow Jones index fell within the 21-day line, which is also close to the 50-day level.
The Russell 2000 is below all of its moving averages and not far from its lowest levels in six months.
Microsoft wasn’t the only stock rising Wednesday, though it felt like it. Amazon.com (AMZN) and many cloud software names from Microsoft’s findings and feedback, along with the chip giant nvidia (NVDA) and Network Commander Arista Networks (Anita). META and ServiceNow shares also got a modest bounce.
However, the market breadth was weak, with the losers outweighing the gainers once again.
On Tuesday, the Nasdaq Advance/Decline line cut below recent levels. The NYSE advance/retreat looks better, but it has also weakened over the past two weeks.
First Trust Nasdaq-100 Equal Weighted Index Fund (QQEW) is down 0.75% after falling below the 50-day line on Tuesday. Invesco S&P 500 Equal Weight Fund (RSP) gave up 1%, decisively below the 200-day line after closing just below that key level on Tuesday.
Drugmakers such as Merck and Eli Lilly fell on Wednesday. The defensive growth area was strong, but on Wednesday money poured into Microsoft and cloud-related names. Is this a one-day photoshoot or something else?
The chipmakers have rebounded, but overall have regained a fraction of the losses on Tuesday and recent days.
Home and shoe builders, including Meritage Stock and CROX, continue to look strong.
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What are you doing now
With the market rally under pressure, breadth thinning and the sector continuing to rotate, it’s hard to get excited about the mixed rebound led by Microsoft. Not many stocks flashed buy signals on Wednesday anyway.
Investors should have modest exposure, with many recent purchases scaled back.
Yes, if earnings season goes well over the next few days, banking concerns subside and the market responds well to next week’s Fed meeting, the market rally could rebound and buying opportunities flourish. But investors should prepare for other scenarios, such as further weakness or market volatility.
Keep your watchlists updated, but have your exit strategies at the ready, too. Stay engaged and resilient in the midst of a challenging rally and huge news cycle.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @tweet For stock market updates and more.
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