Dow Jones futures were little changed early Friday, along with S&P 500 futures and Nasdaq futures. MercadoLibre, Carvana and Booking Holdings headlined another busy night of earnings.
The stock market rally had a powerful day as skyrocketing Nvidia earnings sent other AI stocks soaring, including Advanced Micro Devices and Super Micro Computer. The S&P 500 and Dow Jones hit all-time highs while the Nasdaq jumped above 16,000.
Investors could have taken advantage of some buying opportunities, though there weren't necessarily a lot of them. The market is already looking extended again.
MercadoLibre, Booking Holdings, Carvana, Copart and Floor & Decor reported after the close. MercadoLibre stock, Copart and Floor & Door made bullish moves heading into results, while Carvana was setting up.
Nvidia is on IBD Leaderboard, with Booking stock on the Leaderboard watchlist. Copart is on IBD Long-Term Leaders. Nvidia stock, Booking and MercadoLibre are on the IBD 50. Nvidia and Super Micro stock are on the IBD Big Cap 20. Royal Caribbean was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures tilted higher. Nasdaq 100 futures lost a fraction.
The 10-year Treasury yield edged down to 4.31%.
Crude oil futures fell more than 1%.
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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Key Earnings
MercadoLibre earnings fell short on one-time tax hits, though revenue growth accelerated to 42%. MELI stock sold off in overnight action, pointing to at least a test of the 50-day line. Shares of the Latin American e-commerce and payments giant bumped up 4.6% on Thursday to 1,817.98, hitting a two-year high and topping a short consolidation just above a prior base. That would have been actionable if it weren't for the earnings report.
Booking earnings beat views with the online booking site initiating a dividend, but room nights sold came in just below views. BKNG stock tumbled in extended trade, back to its 50-day line or more Shares rose 4.3% to 3,901.99 on Thursday, hitting a record high.
Copart earnings and sales slightly missed. CPRT stock fell solidly before Friday's open. The salvage vehicle auction site rose 1.1% on Thursday to 49.41, bouncing from the 50-day line to above the 21-day as well as breaking a short downtrend. That could have provided an early position trade or a place to start a Long-Term Leader holding, if it weren't for Copart earnings looming. Copart has a 51.53 buy point from a flat base, base-on-base structure.
Carvana gave upbeat 2024 guidance despite reporting a wider-than-expected loss and missing on revenue. CVNA stock soared more than 25% in extended action. The online auto dealership jumped 6.1% to 52.41 on Thursday, rebounding from the 50-day line. Investors could use the Feb. 15 high of 57.89 as an early entry within a cup base on a daily chart, or as a legitimate handle buy point on a weekly chart, according to MarketSmith analysis. The daily chart's cup base buy point is 62.59.
Floor & Decor earnings easily beat, though EPS guidance was light. FND stock rose modestly in premarket trade. Shares of the flooring retailer rallied 3.9% to 113.53 on Thursday, clearing a trendline and short-term resistance of 112.57. The official buy point is 116.70 from a flat base right next to the top of a 34%-deep cup base.
Stock Market Rally
The stock market rally, after pulling back in anticipation of Nvidia earnings, showed strong gains on those powerful results.
The Dow Jones Industrial Average popped 1.2% in Thursday's stock market trading, with the S&P 500 index up 2.1%, both at record highs. The Nasdaq composite leapt 2.9%, moving back above the 16,000 level and setting a two-year closing high. It's just below a two-year best set on Feb. 12 with the November 2021 all-time high just above that.
Market breadth was positive, but not overwhelmingly so.
The small-cap Russell 2000 popped nearly 1%, back above the 2,000 level but stuck in a range since the final days of 2023.
The Invesco S&P 500 Equal Weight ETF rose 1%, lagging the S&P 500 but hitting a record high. The First Trust Nasdaq 100 Equal Weighted Index ETF leapt 2.3%, briefly setting a fresh a record high though not as strong as the Nasdaq 100's 3% spike.
RSP and QQEW — as well as sector ETFs below — point to broad market leadership.
While Nvidia, AMD and AI stocks led Thursday, a number of non-tech stocks broke out or flashed buy signals on earnings or guidance, such as Iron Mountain, Nordson, Royal Caribbean, Quanta Services and TechnipFMC.
Still, with Thursday's big gains, the S&P 500 and Nasdaq are already getting extended from the 50-day lines. While they could certainly continue to run higher, the risks of another pullback will grow. Bullish sentiment was high even before Thursday's big moves.
U.S. crude oil prices rose 0.9% to $78.61 a barrel, near the highest levels of the year.
The 10-year Treasury yield was fractionally higher at 4.33%, hitting a fresh three-month high of 4.35% intraday. Investors now expect three Fed rate cuts, with the odds of a fourth quarter-point cut slipping below 50%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF rebounded 2.6%. The VanEck Vectors Semiconductor ETF gapped up 6.8% to a new high. Nvidia stock is the No. 1 holding in SMH, with AMD also a big component. The Innovator IBD ETF jumped 4.5%.
Reflecting more-speculative story stocks, ARK Innovation ETF gained 2.5% and ARK Genomics ETF advanced 2.3%.
SPDR S&P Metals & Mining ETF edged up 0.1% and the Global X U.S. Infrastructure Development ETF climbed 1.5%, setting a new high. U.S. Global Jets ETF ascended 1.3%, hitting a six-month high. SPDR S&P Homebuilders ETF stepped up 1.7%, nearly setting an all-time best. FND stock is an XHB holding.
The Energy Select SPDR ETF edged up 0.1%. The Health Care Select Sector SPDR Fund and Industrial Select Sector SPDR Fund both advanced 1.2% to new highs. The Financial Select SPDR ETF rallied 1.3%, marking a two-year best.
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Nvidia Stock, These AI Plays Soar
Nvidia stock skyrocketed 16.4% to 785.38, rebounding from the 21-day moving average to hit a record high. Q4 results were tremendous, with Nvidia earnings up 486% and revenue 265%. The AI chip leader also gave bullish guidance and was very optimistic about generative artificial intelligence. Existing Nvidia holders could have added a few more shares Thursday, but it's greatly extended so investors should be cautious about opening a new position.
AMD stock leapt 10.7%, rebounding from the 10-week line and getting above the bulk of a short consolidation, setting a record close of 181.86. It's already a big outside week for AMD, a close Nvidia rival. Investors could have taken a position Thursday morning, but it's extended from the 50-day/10-week lines now.
Super Micro stock rocketed 33% to 972. That's after flashing what looked like a climax top on Friday — after an admittedly short run — and continuing to trend lower to start this week. But sometimes a stock will appear to have a climax top, but quickly right itself and go on another big move. Super Micro's AI servers are a big beneficiary of Nvidia and other AI chips. Still, there really isn't an entry for SMCI stock.
What To Do Now
Investors could have taken advantage of some buying opportunities, in the AI/tech space or not, especially if they had pared back exposure over the prior week or so. But there weren't a lot of enticing entries, and some names quickly ran out of reach.
There was nothing wrong with simply enjoying Thursday's gains in your portfolio without making new moves.
With the stock market rally already looking somewhat extended, investors will want to be cautious about new buys and adding too much exposure.
But you want to have your watchlists ready. Thursday morning was an example of the importance of being prepared and engaged.
Some more stocks were setting up Thursday so keep running screens. Make sure you're looking beyond the AI stocks sphere.
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