Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Meta Platforms (META) lowered earnings. Apple stock and Amazon.com are on deck Thursday night.
The stock market rally experienced major intraday swings on Wednesday, but major indices eventually closed near session lows. Nasdaq fell hard Microsoft (MSFT) and Google earnings.
Some stocks, including stocks, gave buy signals. Enphase Energy (ENPH), wing stop (WING) and Rollins (ROLL).
Separately, tesla (TSLA) is reportedly facing a criminal investigation into allegations of self-driving.
Facebook main Meta Platforms, wolf speed (KURD), Ford Engine (F), imp (PI), Molina Health (SB), poplar technology (AZPN) and ServiceNow (NOW) reported after closing.
Meta stock fell on weak earnings and guidance. WOLF stock fell under his guidance. Aspen Technology, ServiceNow and PI stock posted big gains, Molina Health exploded. Ford fell slightly. AZPN stock was not active yet.
Merck (HRC), Shopify (SHOP), MasterCard (MA), McDonald’s (MCD) and caterpillar (CAT) report early Thursday.
But then all eyes will be on Thursday night as well. Apple On tap with (AAPL) amazon.com (AMZN) and the biotech giant Vertex Pharmaceuticals (VRTX).
Apple stock and Amazon fell near the 50-day line on Wednesday. VRTX stock is in a buy zone.
Vertex stock and Wingstop are on the IBD Leaderboard. KURT stock is on the Leaderboard watch list. MUSA stock is in IBD 50. Vertex, Molina Health and ENPH stake in IBD Big Cap 20. Enphase Energy was Wednesday’s IBD Stock.
The video attached to this article discussed the volatile movement of the market and WING stock, Enphase and open area (CLFD).
Tesla Criminal Investigation
Tesla is facing a criminal investigation over allegations of self-driving, Reuters reported on Wednesday. According to the report, the Justice Department investigation began last year and is nowhere near reaching any conclusions. The criminal investigation comes amid an ongoing and expanding Autopilot investigation by the National Highway Traffic Safety Administration.
The new criminal investigation did not seem to affect TSLA stock. Shares rose 1% to 224.64 at session highs as the market retreated from early morning highs.
Meanwhile, Tesla CEO Elon Musk has fallen excitement (TWTR) headquarters and changed his Twitter bio to “Chief Twit” and all signs point to a $44 billion takeover closing by Friday evening. TWTR stock was up 1.2% to 53.42 on Wednesday, up 7% so far this week and just below the $54.20 price tag.
It’s unclear whether Musk still needs to sell more Tesla shares to fund the takeover on Twitter.
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Dow Jones Futures Today
Dow Jones futures rose 0.5%. reasonable value. S&P 500 futures were up 0.4%. Nasdaq 100 futures were up 0.2% as the Meta fell as NOW rose.
Note that an overnight move in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
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The stock market rally experienced huge fluctuations on Wednesday and closed mixed.
The Dow Jones Industrial Average closed 2 points in Wednesday’s stock market trade, although MSFT shares fell 7%. boeing (BA) off 9%. The S&P 500 index fell 0.7 percent. The Nasdaq composite slipped 2%. Small-cap Russell 2000 rose 0.5%.
The 10-year Treasury yield fell 10 basis points to 4.01%, continuing the sharp pullback from last Friday’s intraday highs. The 10-year Treasury yield is below the 3-month yield, which fell to 4.03% on Wednesday. A 3-month/10-year reversal is seen as a stronger recession signal than a 2-year/10-year reversal.
The Bank of Canada increased interest rates by 50 basis points. 75 basis points expected as more central banks start to become less aggressive. The Federal Reserve is on a virtual lockdown to raise rates 75 basis points for the fourth meeting in a row next week. But markets are leaning towards a 50 basis point move in December.
The US dollar fell solidly for the second session.
US crude oil prices rose 3% to $87.91 per barrel.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) was up 0.2%. The iShares Extended Technology-Software Industry ETF (IGV) fell 1.75% with Microsoft stock a massive component and ServiceNow a notable holding. The VanEck Vectors Semiconductor ETF (SMH) fell 1%.
The SPDR S&P Metals & Mining ETF (XME) was up 1.1%. The Energy Select SPDR ETF (XLE) was up 1.4%. The Healthcare Selected Sector SPDR Fund (XLV) rose 1.1%.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) rose 0.2% and the ARK Genomics ETF (ARKG) rose 2.8%. Tesla stock remains a major holding in Ark Invest’s ETFs.
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Although revenue was at its peak, Meta Platforms earnings were noticeably below third-quarter views. Facebook parent also gave poor guidance.
Meta stock dropped nearly 20% overnight, signaling its worst low since late 2016. Shares were already down 5.6% to 129.82 on Wednesday after Google missed gains from weak online advertising revenue. Snapchat tracked poor income from parent blow up (SNAP) earlier this month.
Wolfspeed reported quarterly losses and slightly above sales views. The EV-exposed chipmaker provided disappointing guidance.
WOLF stock is down more than 25% in long-term trading, signaling a bearish break below recent lows and the 200-day moving average. Shares rose 1.3% to 106.44 on Wednesday and hit resistance at the 50-day line. WOLF stock is close to having a decent footing.
Impinj earnings smashed opinion as the tracking chip maker also took on sales forecasts.
PI stock rose more than 15% overnight, marking a clearing above the 99.10 consolidation buy point. Impinj stock rose 1.3% to 89.23 on Wednesday and stayed above its 50-day line.
Ford’s earnings and revenues were largely in line with declining views after the automaker warned of supply chain problems and costs last month.
The Ford stock is lower-edged in extended action. Shares fell 0.1% to 12.82 on Wednesday. Ford stock is trading above the bottom 16.78 buying point but still below the 50-day and 200-day moving averages, according to MarketSmith analysis.
Molina Health earnings modestly exceeded view count. MOH stock rose solidly in overnight trading. Shares rose 0.8% to 369.23 on Wednesday and rose from a flat bottom in the buy zone. Flat sole, which is part of a foundation-based formation, has 361.35 buy points. Molina stock will open beyond the 5% buy zone ending at 379.42.
Aspen Technology earnings smashed views and revenue peaked. AZPN stock was not yet traded in expanded trading. Shares of the supply chain and engineering software maker slid 1.7% to 248.40 on Wednesday, but found support at its rising 21-day moving average. AZPN stock has been consolidating for a few weeks after a strong run, but needs more time to establish a proper footing.
ServiceNow earnings peaked but revenue fell short, and the business software giant lowered its Q4 subscription revenue targets. However, NOW stock rallied hours later, showing at least a test of a falling 50-day streak. ServiceNow stock fell 2.7% to 366.41 on Wednesday on Microsoft results and guidance.
Market Rally Analysis
Wednesday was a strange day for the stock market rally. Nasdaq, Microsoft and Google earnings fell at launch. The tech-heavy index erased losses in the late morning, but then stocks slumped to session lows. S&P 500, which broke above the 50-day line, declined during the day.
After falling near the 50-day line, the Nasdaq now needs support near the 21-day line.
Despite closing quite high, the Russell 2000 moved the 50-day line, reflecting how market weakness is concentrated in mega caps. Microsoft and Google parent Alphabet (GOOGL) were the main culprits, but Meta, Amazon and Apple were also key losers.
The Invesco S&P 500 Equal Weight ETF (RSP) is up 0.2% despite closing near session lows.
The pullback from key technical areas on Wednesday’s bad news isn’t all that surprising. What matters is how the market rally will react from here.
Large amounts of earnings, including Apple stock and Vertex, are still expected this week, with a heavy load next year. Also next week: another Fed meeting and rate hike, with October jobs report and other key economic data.
On the plus side, leading stocks from a variety of industries are showing buy signals and are increasing their earnings, including ENPH stock.
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what to do now
Wednesday’s roller coaster session, which closed close to lows, underscores the need for caution.
Investors had to gradually add risk in the last few days as the market rally strengthened and more stocks signaled to buy. But rushing into new positions risks loading up at intraday highs or before a more substantial pullback.
While there is reason to be hopeful, many technical hurdles and macroeconomic challenges remain.
Look for new opportunities by working on your watch lists. But be prepared to scale down if an uptrend or your stocks get in trouble.
Read the Big Picture daily to stay in tune with the market direction and leading stocks and industries.
Please follow Ed Carson on Twitter at: @IBD_ECarson for stock market updates and more.
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