Dow Jones futures rose early Friday, along with S&P 500 futures and especially Nasdaq futures, as Apple and Amazon.com headlined another wave of overnight earnings.
The stock market rally showed strength Thursday, shrugging off a post-Fed pullback and weak earnings to move modestly higher.
Key Earnings Overnight
In addition to Apple and Amazon, First Solar, Intel and Roku were notable reports.
Apple stock rose modestly in overnight action on better-than-expected fiscal Q3 earnings and upbeat comments.
Amazon stock surged in extended trading. The e-commerce and cloud-computing giant topped revenue views.
FSLR stock rose 4% early Friday after First Solar easily beat EPS views and also topped on sales. Shares spiked 15% Thursday as Congress made progress on legislation that includes solar and green-power incentives.
Intel stock plunged 11% in extended action after the ailing chip giant missed Q2 views badly and slashed full-year estimates.
Roku stock crashed more than 20% after the streaming platform reported a wider-than-expected loss and fell short on revenue, citing a "significant slowdown" in advertising. Streaming hours watched edged lower vs. Q1. Roku also guided sharply lower in Q3. Roku stock is set to plunge to its worst levels since the March 2020 coronavirus lows.
Early Friday, Dow Jones giant Chevron easily beat views, while Exxon Mobil also topped forecasts. Chevron rose 3% as it moves back toward its 50-day line. XOM stock climbed nearly 3% after retaking its 50-day line earlier this week.
AstraZeneca topped forecasts and raised full-year revenue targets. AbbVie topped EPS views but just missed sales targets. AstraZeneca and ABBV stock edged lower, both near buy points.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures climbed 0.6%. Nasdaq 100 futures popped 1%. Apple stock and Intel are Dow Jones, S&P 500 and Nasdaq components. CVX stock is a Dow Jones and S&P 500 stalwart.
Crude oil futures rose more than 2%.
The 10-year Treasury yield climbed 3 basis points to 2.71%.
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 fell soon after the open, but quickly strengthened, with the major indexes rising solidly.
U.S. GDP fell at a 0.9% annual rate, the second straight quarter of modestly declining economic activity. However, consumer spending remained positive. The data further eases Fed rate hike forecasts without signaling a massive slump.
A new push for a tax-and-spending bill that includes green provisions lifted solar stocks and other green-energy plays.
The Dow Jones Industrial Average popped 1% in Thursday's stock market trading. The S&P 500 index rallied 1.2%. The Nasdaq composite gained 1.1%. The small-cap Russell 2000 gained 1.4%.
U.S. crude oil prices reversed lower, falling 0.9% to $96.42 a barrel.
The 10-year Treasury yield fell 5 basis points to 2.68%, hitting its lowest levels since April.
The odds of a 50-basis-point Fed rate hike on Sept. 21 rose to 76% from 60.5% on Wednesday and 40% on Tuesday. Markets are betting on a quarter-point move in November and then maybe a quarter point in December.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF rose 1.8%, while the Innovator IBD Breakout Opportunities ETF bounced 1.75%. The iShares Expanded Tech-Software Sector ETF gained 1.9%. The VanEck Vectors Semiconductor ETF advanced 1.2%, with Intel stock a notable holding.
SPDR S&P Metals & Mining ETF advanced 0.75% and the Global X U.S. Infrastructure Development ETF jumped 2.7%. U.S. Global Jets ETF edged up 0.5%. SPDR S&P Homebuilders ETF popped 2.1%. The Energy Select SPDR ETF gained 0.6%, with Exxon and CVX stock both huge components. The Financial Select SPDR ETF rose 0.7%. The Health Care Select Sector SPDR Fund moved 0.6% higher. ABBV stock is a big XLV holding.
Reflecting more-speculative story stocks, ARK Innovation ETF dipped 0.4% and ARK Genomics ETF 1.3%. Roku stock is a notable ARKK holding.
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Apple Earnings
Apple earnings fell 8%, but modestly topped views. Sales climbed 2% to $82.96 billion, slightly topping fiscal Q3 views. The iPhone giant expects revenue growth to accelerate despite "pockets of softness."
Apple stock rose 2.5% early Friday, signaling a possible move above the 200-day line.
Shares edged up 0.4% to 157.35 on Thursday. AAPL stock has made a strong advance since hitting a 52-week low on June 16. The relative strength line is right at new highs. The RS line, the blue line in the charts provided, tracks a stock's performance vs. the S&P 500 index.
Amazon Earnings
Amazon earnings were a little confusing, with a $2 billion net loss clouded by various special factors. But revenue climbed 7% to $121.2 billion, topping views as Amazon Web Services revenue growth accelerated to 33%.
Amazon also gave bullish Q3 revenue.
AMZN stock spiked 11% in extended action, signaling a move toward its 200-day line. Shares rose 1.1% to 122.28 on Thursday. Amazon stock recently regained its 50-day line.
Market Rally Analysis
The stock market rally pulled back Thursday morning, with the Nasdaq down more than 1% intraday. But the major indexes quickly shook that off and moved higher. The Nasdaq moved above last week's highs, after the Dow and S&P did so on Wednesday.
A pullback wouldn't have been a surprise as a day two reaction to the Fed meeting after Wednesday's big spike, and with the major indexes at some key technical levels. Weak earnings or guidance from Meta Platforms, Qualcomm and others also offered a reason for a retreat.
So the market action Thursday definitely showed strength.
The early June highs are the next market hurdle. A market pause for a few days or even weeks wouldn't be bad. That would let some stocks form handles and let moving averages catch up.
Hershey flirted with an early buy point on earnings while Rollins broke out powerfully in a day two reaction to earnings. Carlisle gapped out of a base on earnings while Quanta Services broke out as part of the green power surge, but both are somewhat extended from their 50-day lines.
Pfizer fell following earnings but rebounded off lows, not far from a trend line. Vertex Pharmaceuticals, within a buy zone, bounced off its 50-day line.
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What To Do Now
The stock market rally is clearly showing more strength, while a massive week of news is nearly finished. Investors should be taking advantage by adding exposure. But do so prudently. There's still the risk of individual shakeouts or the market hitting resistance.
Market and sector ETFs remain an attractive way to add exposure with a limited number of quality stocks in position.
Work on those watchlists.
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.
