Dow Jones futures were little changed Tuesday morning, along with S&P 500 futures and Nasdaq futures. General Electric headlined key earnings.
The stock market rally continued to advance Monday as Treasury yields retreated. The Dow Jones and S&P 500 hit fresh highs, though closing off best levels. Small caps led in a second straight day of stronger market breadth, a bullish sign.
Apple continued to advance, reclaiming a key level and offering an early entry. Affirm Holdings, MongoDB, UiPath, Synopsys and Crispr Therapeutics flashed buy signals Monday.
Earnings
United Airlines reported better-than-expected fourth-quarter earnings Monday night. UAL stock rose sharply in premarket trade. Airline stocks have sold off following Delta Air Lines earnings and the blocked JetBlue-Spirit Airlines deal.
General Electric reported better-than-expected fourth-quarter earnings but guided low on Q1 EPS. GE stock fell modestly from a six-year high in premarket trade after initially tumbling.
Heavy truck maker Paccar comfortably beat views. PCAR stock rose slightly early Tuesday after flashing an early entry Monday.
Homebuilder D.R. Horton missed slightly on EPS. DHI stock fell solidly from Monday's record high.
Halliburton slightly missed on sales, but the oil services giant was upbeat on 2024. HAL stock rose modestly, but has been in a sharp downtrend. Baker Hughes is also due to report Tuesday, with shares also struggling.
Netflix reports Tuesday night, with NFLX stock closing in buy range Monday. Early Tuesday, Netflix and TKO Group said that the streaming platform will air WWE's flagship program Raw starting in 2025. NFLX stock rose modestly while TKO stock spiked.
Tesla looms Wednesday night. TSLA stock, in a sharp downtrend, reversed lower Monday amid analyst comments and FSD news.
MongoDB and AFRM stock were added to SwingTrader Monday. SNPS stock is on the IBD Long-Term Leaders list. Monday.com and MDB stock are on the IBD 50. MongoDB was Monday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell a fraction vs. fair value, with 3M skidding on its mixed results and weak guidance. Verizon popped on strong wireless subscriber growth. Procter & Gamble edged higher on mixed earnings, while Johnson & Johnson was little changed on its Q4 financials.
S&P 500 futures advanced 0.1%. Nasdaq 100 futures rose 0.2%.
The 10-year Treasury yield rose to 4.13%.
Crude oil futures fell 1%.
China is mulling measures to buoy its ailing stock markets, Bloomberg reported Monday night. Hong Kong's Hang Seng surged more than 3% at one point, closing up 2.6%.
As expected, the Bank of Japan kept its ultra-loose monetary policy unchanged overnight.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally started off strong, faded significantly before shoring up near the close.
The Dow Jones Industrial Average rose 0.4% in Monday's stock market trading. The S&P 500 index climbed 0.2%. The Nasdaq composite advanced 0.4%
The Dow Jones and S&P 500 hit fresh all-time highs Monday, while the Nasdaq set another two-year best, but closed well off highs.
Monday showed strong market breadth, suggesting that Friday's broad rally wasn't just a one-time blip.
The small-cap Russell 2000 jumped 2%, reclaiming the 21-day line after Friday's rebound from the 50-day/10-week line.
The Invesco S&P 500 Equal Weight ETF rose 0.5%, slightly outpacing the S&P 500 and moving back toward 52-week highs.
The First Trust Nasdaq 100 Equal Weighted Index ETF gained 0.4%, another two-year high and besting the Nasdaq 100's 0.1% uptick.
While several growth software and payment plays were notable winners, industrials, building and financials were strong.
U.S. crude oil prices popped 2.4% to $75.19 a barrel, the highest close since Dec. 26.
The 10-year Treasury yield fell five basis points to 4.09%. falling back after hitting resistance at the 50-day line on Friday. But the 10-year yield also found support at the 200-day line.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF rose 0.9%, with PATH stock in the ETF. The VanEck Vectors Semiconductor ETF added 0.5%. Synopsys stock is in IGV and SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF popped 2.3% and ARK Genomics ETF bounced 3.5%. TSLA stock is still a major holding across Ark Invest's ETFs. CRSP stock and UiPath are significant Cathie Wood holdings as well.
SPDR S&P Metals & Mining ETF advanced 0.7%. U.S. Global Jets ETF edged down 0.1%, with UAL stock a key component. SPDR S&P Homebuilders ETF stepped up 1.7%. The Energy Select SPDR ETF climbed 0.4%, with Halliburton and BKR stock both big members. The Health Care Select Sector SPDR Fund and Financial Select SPDR ETF also rose 0.4%.
The Industrial Select Sector SPDR Fund was up 0.8%. GE stock is a major XLI holding, with Paccar also in the ETF.
Time The Market With IBD's ETF Market Strategy
Apple Stock
Apple stock rose 1.2% to 193.90x, up 6.1% over the last three sessions. The iPhone giant is back above a $3 trillion valuation, after briefly losing its market cap crown to fellow Dow Jones tech titan Microsoft early last week.
AAPL stock is now clearly above its 50-day and 10-week lines as well above a downward-sloping trendline. The relative strength line had lagged for several weeks, but is starting to bounce back.
AAPL stock has a 199.62 buy point from a flat base.
Apple earnings are due on Feb. 1.
Stocks In Buy Areas
AFRM stock jumped 5.2% to 44.35 gapping above the 21-day moving average and decisively breaking a downtrend. That's after rebounding from the 10-week line on Friday. Affirm stock flashed an early entry on Monday, though shares settled well off session highs.
MDB stock gained 3.1% to 413.42 breaking a downtrend as it rebounded from the 50-day line, offering an early entry. Shares came off intraday highs of 426.51 after briefly topping resistance at 425. MongoDB stock has a 442.84 buy point in a consolidation forged next to a failed cup-with-handle breakout.
PATH stock jumped 5.7% to 23.49, bouncing above the 21-day line and breaking a downtrend after reclaiming the 50-day line on Friday. Shares closed just above the 10-week line. UiPath stock has been consolidating for a few weeks after blasting out of a long trading range in late 2023. It's on track to have a new base with a 26.52 buy point after this week.
CRSP stock leapt 5.3% to 65.26, reclaiming the 50-day line and brushing up against a downward-sloping trendline in a messy consolidation. Investors could use Monday's high of 65.80 as specific entry. The official buy point is 76.97, according to MarketSmith analysis.
SNPS stock rallied 4.7% to 541.71, retaking its 50-day moving average and closing near session highs. That offered an early entry into an emerging consolidation. It's also a good place to start a position in a Long-Term Leader like Synopsys, a chip-and-electronics design software firm.
Synopsys plunged on Dec. 22 on reports that it was in talks to buy Ansys, with shares continuing to fall in early January. But SNPS stock rebounded on Jan. 5, then kept rising after the actual Synopsys-Ansys deal was announced on Jan. 16.
Tesla Stock Falls
Tesla stock fell 1.6% to 208.80 reversing from an intraday high of 217.80 to close at a fresh two-month low.
On Monday, Morgan Stanley's Adam Jonas cut his TSLA price target to 345 from 380, saying, "Global EV momentum is stalling." Jonas now values Tesla's EV business at just 75, with most of his TSLA price target for Full Self Driving, robotics and artificial intelligence.
On Sunday night, Tesla released FSD Beta Version 12 to a few paying customers.
Tesla earnings are due Wednesday night. With the EV giant continuing to cut prices and increase discounts in the new year, the outlook for profit margins will be key.
What To Do Now
The market rally continues to act well despite Monday's fade from morning highs.
Investors can still look for new buying or add-on opportunities, either adding incrementally to exposure or offsetting with profit taking or cutting losses. There's also nothing wrong with holding steady with significant-to-heavy exposure, letting your stocks work.
But keep working on your watchlists for new setups and continue to grade the stocks in your portfolio.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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