The Dow Jones declined modestly Friday morning, while the S&P 500 and Nasdaq fell solidly on the final trading day of April. Apple and Amazon stock led key earnings late Thursday. Chevron and Exxon Mobil reported before Friday's open.
The stock market rally attempt gained steam Thursday as Facebook parent Meta Platforms surged and a number of other beaten-down former tech leaders rebounded. Dow giant Merck and Eli Lilly rallied on earnings, both flashing buy signals.
Tesla stock rose slightly early Friday. Late Thursday and early Friday, Chief Executive Elon Musk disclosed he sold more than 9 million shares over Tuesday-Thursday. Tesla stock had edged lower Thursday, down sharply for the week.
Apple stock and Amazon.com reported earnings after the close, along with Intel and Atlassian. But aside from Apple, all of these stocks are well off highs.
Along with oil majors Exxon and Chevron, medical giants AbbVie and Bristol Myers Squibb reported before Friday's open. XOM stock and Dow giant Chevron are near buy points. ABBV stock is finding support at its 50-day line while Bristol Myers is at its 21-day, both after strong advances.
Tesla and LLY stock are IBD Leaderboard listings. SwingTrader tracks MRK stock. TEAM stock is on IBD Long-Term Leaders. Exxon Mobil, Chevron and BMY stock are on the IBD Big Cap 20 list. Merck was Thursday's IBD Stock Of The Day.
Dow Jones Today
The Dow Jones fell 1.2%. The S&P 500 sank 1.65%. The Nasdaq retreated 1.6%, as AMZN stock and other tech earnings losers were drags. Tesla stock offered a slim boost.
The Fed's favorite inflation gauge, the PCE price index, jumped 6.6% vs. a year earlier, up from 6.4% in February. But it was below views for 6.8%. The core PCE rose 5.2% vs. a year earlier, just below views for 5.3% and down from February's 5.4%.
The 10-year Treasury yield climbed 1 basis point to 2.87%.
Crude oil prices rose more than 1%, with West Texas Intermediate moving above $106 a barrel.
U.S.-listed Chinese stocks are rallying on regulatory hopes, especially internets such as Alibaba and JD.com. China's Politburo released statements suggesting that a broad crackdown on internet platforms will finally be easing.
Hong Kong's Hang Seng Index rallied 4% Friday. Meanwhile, U.S. and Chinese regulators are meeting to discuss how on-site audit inspections would work, Bloomberg reported, the latest step toward ending delisting fears.
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Apple Stock
Apple earnings and revenue topped forecasts, amid strong iPhone sales. The Dow Jones tech giant OK'd another $90 billion for AAPL stock buybacks, and upped its dividend by 5% to 23 cents a share. But Apple warned of a $4 billion-$8 billion revenue hit this quarter from ongoing China shutdowns.
Apple stock edged lower in up-and-down trade Friday, after falling solidly overnight.
Shares popped 4.5% to 163.64 on Thursday, reclaiming the 200-day line. AAPL stock has a 179.71 buy point from a handle that's large for a consolidation only 18% deep. Arguably, there's an early entry from a short trendline slightly above the 50-day moving average. The relative strength line for Apple stock is not far from highs, a reflection of broad market weakness.
Amazon Stock
Amazon reported a big first-quarter loss, reflecting the declining value of its Rivian stake. Revenue slightly missed. Amazon Web Services slightly topped revenue targets. But Amazon guided low on the second quarter.
AMZN stock dived 12%. Shares popped 4.65% on Thursday to 2,891.93, but have been trading near their lowest levels since mid-2020.
Intel Stock
Intel earnings narrowly topped views. But the struggling chip giant guided low on second-quarter per-share earnings and sales. INTC stock sank 6%. Shares rose 3.6% on Thursday to 46.84.
TEAM Stock
Atlassian earnings beat analyst views. But the collaboration software maker guided low on current-quarter per-share earnings. TEAM stock fell nearly 7%. Atlassian stock jumped 6.7% on Thursday to 259.98.
Chevron Stock
Chevron earnings slightly missed views early Friday. Revenue topped FactSet forecasts, but missed others. Chevron stock sank 2% near 158. CVX stock is in a flat base with a 174.86 buy point, reclaiming its 50-day line on Thursday.
Exxon Stock
Exxon earnings also fell short of Wall Street expectations while revenue topped views. Exxon stock edged lower near 86. XOM stock is in a shallow cup-with-handle base with an 89.90 buy point.
Bristol Myers Stock
Bristol Myers earnings and sales topped forecasts, with the drug giant slightly trimming full-year earnings targets and as it reduced Revlimid sales goals. BMY stock fell 3.5%, but not far from highs.
AbbVie Earnings
AbbVie earnings just beat views, but sales fell short. The drug and medical products giant slashed full-year earnings views. ABBV stock tumbled nearly 9%. Shares had been finding support at their 50-day line.
Elon Musk Sells Tesla Stock
Musk, in SEC filings Thursday night and Friday morning, disclosed he sold roughly 9.6 million Tesla shares worth nearly $8.4 billion on Tuesday-Thursday. On Tuesday, TSLA stock plunged 12.1%. Musk tweeted late Thursday that he's done selling shares.
It's a good bet that Musk sold the shares to help pay for his takeover of Twitter. Musk plans to take the social media company private.
Tesla stock popped nearly 4% early Friday, back above its 200-day line, perhaps with Musk share sales priced in.
Shares dipped 0.45% to 877.51 on Thursday, but had to be dragged to that point by a big market rebound. Intraday, TSLA stock fell as low as 821.70. Technically, Tesla still has an 1,152.97 cup-with-handle buy point, but the chart looks damaged with shares below key moving averages.
Merck Stock
Merck stock rose 4.9% on Thursday to 88.58 following better-than-expected earnings. MRK stock technically is still below an 89.58 cup-with-handle buy point, according to MarketSmith analysis. But shares broke the downtrend of the handle and it turned in its best close since early November. The RS line for MRK stock is the highest since January 2021.
Eli Lilly Stock
Eli Lilly stock popped 4.3% on Thursday to 297.27 on first-quarter earnings. After round-tripping a cup-base breakout earlier this month, LLY stock headed into earnings just above the 284 buy point. Shares are still in the buy zone, but also broke a short-term downtrend and moved above their 21-day moving average.
Stock Market Thursday
The stock market rally attempt wobbled initially but then picked up momentum.
The Dow Jones Industrial Average ran up 1.85% in Thursday's stock market trading. The S&P 500 index leapt 2.5%. The Nasdaq composite gained 3.1%. The gains lifted all three indexes into positive territory for the week. That positioned the Dow to potentially snap a four-week decline, with the Nasdaq and S&P 500 poised to possibly end three-week slides.
The small-cap Russell 2000 rose 1.8% after hitting a fresh 52-week low intraday.
U.S. crude oil prices popped 3.3% Thursday to $105.36 a barrel. The 10-year Treasury yield rose 4 basis points to 2.86%.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF climbed 1.1% on Thursday, while the Innovator IBD Breakout Opportunities ETF advanced 1.4%. The iShares Expanded Tech-Software Sector ETF jumped 4%. The VanEck Vectors Semiconductor ETF soared 5.7%.
SPDR S&P Metals & Mining ETF bounced 1.85% and the Global X U.S. Infrastructure Development ETF 1.9%. U.S. Global Jets ETF ascended 2%. SPDR S&P Homebuilders ETF popped 2.8%. The Energy Select SPDR ETF gained 3%, with XOM stock and CVX stock major components. The Financial Select SPDR ETF rose 1.3%. The Health Care Select Sector SPDR Fund climbed 1.4%, with ABBV stock and Bristol Myers big holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF declined 1.4% and ARK Genomics ETF 3.5%, both hitting 24-month lows intraday. The Teladoc Health crash weighed on both funds. Tesla stock remains the No. 1 holding across Ark Invest's holdings.
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Market Rally Analysis
The stock market finally got a strong session, with powerful price gains across the board. But it's just one day. The best one-day percentage gains in stock market history often occur in bad markets.
The Nasdaq has now started a new stock market rally attempt, while Thursday was day two for the Dow Jones and S&P 500. If the major indexes hold their recent lows, investors could look for a follow-through day to confirm the new rally as soon as next week. As a practical matter, it seems unlikely that a follow-through day would occur before the Federal Reserve's two-day meeting ends next Wednesday.
For now the market remains in a correction.
A lot of Thursday's big winners were beaten-down techs rallying on earnings that were not as bad as feared — including Facebook, PayPal and ServiceNow — but nowhere close to buying opportunities. Merck and LLY stock were exceptions.
But relief rallies can quickly fade, with Apple and Amazon leading futures lower overnight.
Energy, steel, fertilizer groups remain resilient, along with defense stocks. Drug makers and health insurers are looking strong. Travel names are still interesting.
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What To Do Now
Thursday's market action may not matter. What matters is what comes next. If the major indexes soon charge to new lows, then Thursday is just a blip in an ongoing correction or bear market. If the major indexes continue higher and confirm a new market rally, then it's meaningful.
Investors with little or no exposure could have bought MRK stock or Lilly on Thursday. Another option would be to buy a broad market ETF, hoping for at least a short-term bounce. But if you're going to make new buys before a follow-through day, keep the exposure minimal, and be extremely nimble. Take partial profits quickly and be ready to exit.
Being 100% in cash is still a sound strategy.
Your primary goal right now is to be ready when the market turns. Build up those watchlists. They'll need revising as earnings season and recent market losses lift some names and drag down others.
And stay engaged. You don't have to stare at your screens watching the market nonstop, but keep tabs so you won't be caught off guard.
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.
