Dow Jones futures were little changed Friday morning, along with S&P 500 futures and Nasdaq futures, after a slim stock market rally Thursday. Disney stock, DoorDash and Airbnb headlined overnight earnings.
Apple and Tesla flashed buy signals Thursday. Software rebounded somewhat while memory chip worries continued to hit some semiconductor stocks. Industrial, metal, financial and retail names held up well after some solid gains.
Walt Disney reported earnings late Thursday. So did recent IPOs DoorDash, Figs, Cricut, ZipRecruiter and ABNB stock.
DIS stock jumped overnight, flashing a possible buying opportunity. DASH stock, Figs, Cricut and Airbnb fell in extended trade, while ZIP stock zipped higher.
Apple stock and Tesla are on IBD Leaderboard and SwingTrader.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. Disney stock is providing a lift to Dow futures. S&P 500 futures climbed a fraction and Nasdaq 100 futures fell 0.1%.
The 10-year Treasury yield fell slightly after a strong gain over the last several sessions.
Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally Thursday
The stock market rally traded in a narrow range, closing near session highs with big-cap techs leading the way.
The Dow Jones Industrial Average closed just above breakeven in Thursday's stock market trading. The S&P 500 index rose 0.3%. The Nasdaq composite climbed 0.35%. The small-cap Russell 2000 dipped 0.3%.
Apple stock, as a Dow Jones, S&P 500 and Nasdaq component, rising 2% buoyed the major indexes. Microsoft, Nvidia and Tesla stock, also up modestly, contributed as well.
The 10-year Treasury yield climbed 3 basis points to 1.37% after hitting resistance at its 50-day line.
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Among the best ETFs, the Innovator IBD 50 ETF rose 0.6%, while the Innovator IBD Breakout Opportunities ETF rose 0.7%. The iShares Expanded Tech-Software Sector ETF was up 1%. In contrast, the VanEck Vectors Semiconductor ETF fell 1%. Micron sold off again on memory chip pricing concerns, taking a toll on some related semiconductors.
SPDR S&P Metals & Mining ETF fell 0.65%, slashing intraday losses as some steelmakers continued to run higher. The Global X U.S. Infrastructure Development ETF edged up 0.2%, after rising to record highs over the past two sessions. U.S. Global Jets ETF fell 1.7%. SPDR S&P Homebuilders ETF sank 0.6%. The Energy Select SPDR ETF dipped 0.1% and the Financial Select SPDR ETF added 0.2%.
Reflecting more-speculative story stocks, ARK Innovation ETF climbed 0.45% and ARK Genomics ETF eked out a 0.1% gain. Tesla stock is the No. 1 holding across ARK Invest's ETFs.
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Apple Stock
Apple stock rose 2.1% to 148.89, rebounding from its 21-day line and breaking a trend line in a short consolidation. The iPhone giant has been trading just above a 145.19 buy point in recent weeks. Investors also could use 150.10 as an alternate buy point.
Tesla Stock
Tesla stock climbed 2% to 722.25, rebounding from near a 700.10 early entry and breaking a tiny trend line from its very short-term consolidation. That offered another aggressive buy point. Perhaps ideally, Tesla stock would pull back, perhaps at least to its 21-day line, to shake out weak holders and create more of a real handle. But it hasn't been giving up ground. TSLA stock had its highest close since late April.
Shares are rallying despite growing chip and other supply-chain issues. CEO Elon Musk bemoaned supply-chain constraints on Twitter Thursday morning. Meanwhile, Tesla appears to have pushed out U.S. deliveries of the Model 3, Model S and Model X by several months.
On the plus side, industrywide chip woes are giving automakers pricing power, with Tesla raising U.S. prices multiple times this year.
CEO Elon Musk said Friday that he hopes the Berlin plant will begin making cars by October. Tesla had said the plant would be operational by year-end, though other reports suggested an early 2022 start.
On Aug. 19, Tesla will hold an AI Day.
Disney Earnings
Disney earnings were better than expected amid rebounding theme parks revenue and strong subscriber growth. Disney+ now has 116 million paid subscribers, ESPN+ is at 14.9 million with Hulu at 42.8 million.
DIS stock popped nearly 5% to almost 188 early Friday, slightly off overnight highs. Shares edged up 0.7% on Thursday 179.38, rebounding slightly from the 50-day line. After a strong run from early November to early March, DIS stock has been trending lower.
A strong post-earnings bounce from the 50-day could offer a buying opportunity, with 186.39 looming as another early entry.
The delta Covid-19 variant is raising concerns about theme parks and movies, with box office still lackluster in 2021.
Figs Earnings
Figs earnings appeared to beat views on an adjusted basis, but the stylish health care scrubs maker also reported a GAAP loss. Revenue topped forecasts. Figs raised full-year sales guidance, but a lot of that reflect Q2's top-line beat. The company also sees shipping issues affecting margins.
Figs stock tumbled nearly 8% in premarket action, but that's off overnight lows. Shares rose 2.8% on Thursday to 42.01. Figs stock has an official buy point of 50.50, according to MarketSmith analysis. For aggressive traders, Figs offered an early entry as it broke a downtrend last week and rebounded from the prior consolidation.
DoorDash Earnings
DoorDash reported a wider-than-expected loss though revenue beat. The app-based food-delivery service sees growth rates slowing. Sales growth has slowed for three straight quarters, from 268% to a still-hefty 83%.
DASH stock retreated 4% overnight. Shares retreated 1.2% to 188.21 on Thursday. DASH stock has rallied well off lows but is still far below the 256.19 buy point in a very deep consolidation.
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Airbnb Earnings
Airbnb earnings easily topped consensus, but warned of possible impacts from the delta variant of the coronavirus.
ABNB stock fell 2% in extended trade. Shares advanced 2% on Thursday to 151.15. ABNB stock could offer an early entry from a 50-day line rebound. The official consolidation buy point is 157.51.
Cricut Earnings
Cricut earnings topped forecasts modestly.
CRCT stock plunged 22% before Friday's open. Shares rallied 3.3% to 34.51 on Thursday, below its 50-day line. Cricut stock has been very volatile, even for an IPO.
ZipRecruiter Earnings
ZipRecruiter reported a loss that appeared to be wider than analyst targets. But revenue shot up 109% vs. a year earlier to $183 million — and up sharply from Q1's $125.4 million. The online job search firm raised full-year revenue and EBITDA guidance.
ZIP stock leapt 9% in extended action. Shares rose 1.1% to 29.04 on Thursday. ZIP is significantly extended from buy points at 24.93 and 26.81.
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Market Rally Analysis
The stock market rally rotation rotated back to growth somewhat on Thursday.
The Nasdaq rebounded, with Apple stock and Tesla contributing.
There were a number of stocks that flashed some entries on Thursday, but few screaming buys.
Many growth stocks rebounded Thursday after suffering some losses Wednesday, notably software. But chips had a lot of losers while the ARK ETFs signaled a mixed session for highly valued growth overall, even with Tesla stock up nicely.
Meanwhile, real economy sectors such as steel, materials, industrial, financial and discount retail showed modest gains or losses after several strong sessions.
So while there is market rotation, it's not whipsaw action or a big extended divergence. The major indexes are at or near record highs. Leading stocks from a variety of sectors have flashed buy signals over the past couple of weeks.
But while the breadth of leadership has improved, overall market breadth still isn't great, with the Russell 2000 stuck below its 50-day line.
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What To Do Now
With the market rally still acting relatively well, investors should be taking advantage. Modest sector rotation shows the importance of having a diversified portfolio of leaders. It's a lot easier to handle modest pullbacks if it's not your entire portfolio falling 3%, 4%, 5% over several days.
Sometimes a portfolio will act like a sofa that you're moving by yourself, pushing one end at a time. Some of your holdings will advance while others go sideways or pull back. The next day your winning stocks may shift. But, like a sofa, your portfolio overall will progress.
Investors should be adjusting their holdings, cutting losers and perhaps taking partial profits in some cases. But just as there was no reason to completely dump tech stocks after Wednesday, there's no reason to sell out of industrial or financial names.
Keep refining your watchlists and pay close attention top-tier names that are near breakouts or early entries. Buying as close to the buy point as possible is still important. That can help handle pullbacks and sector rotations.
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Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
