Dow Jones futures rose slightly early Friday, along with S&P 500 futures and Nasdaq futures. Applied Materials and Ross Stores were key earnings movers.
The stock market rally had a mixed Thursday, with the Nasdaq and S&P 500 eking out slim gains despite earnings-related sell-offs from Cisco Systems, Palo Alto Networks and Alibaba. Leading stocks held up reasonably well, but small caps were big losers. Treasury yields retreated while crude oil futures tumbled.
Google parent Alphabet flashed a buy signal Thursday, while General Electric broke out. Novo Nordisk is setting up.
On the downside, Tesla stock fell back below a key level after Tesla CEO Elon Musk made a comment on X that many saw as anti-Semitic. Meanwhile, it was a tough day for EV stocks, including Li Auto, BYD and XPeng retreated.
NVO stock and Li Auto are on the IBD 50. Novo Nordisk was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures climbed 0.4% and Nasdaq 100 futures advanced 0.2%.
The 10-year Treasury yield edged lower to 4.4%.
Crude oil rose 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.
Key Earnings
AMAT stock sold off overnight, signaling a move below a buy point. Applied Materials earnings topped fiscal Q4 views, while Q1 guidance was above consensus at the midpoint. But the chip-equipment giant is under U.S. criminal investigation for reportedly evading China export curbs, according to a Reuters report released right at the market close. The chip-equipment giant dipped 0.4% to 154.81 on Thursday, just in range from a double-bottom base buy point of 148.40. Applied Materials broke out last week on strong October sales for Taiwan Semiconductor, a major customer.
ROST stock rose solidly after hours, signaling a move back above a buy point. Ross Stores earnings topped views and the off-price apparel chain gave solid Q4 guidance. Shares fell 3.1% on Thursday to 120.15, back below a 122.80 buy point from a flat base next to top of a saucer pattern. Ross Stores stock may have reacted to weak guidance from Walmart on Thursday and from off-price peer TJX Cos. early Wednesday.
Gap surged toward a 2023 high overnight after the apparel retail giant reported strong Q3 earnings, though its holiday guidance was more ho-hum than ho-ho.
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Stock Market Rally
The stock market rally traded modestly lower for much of Thursday, but the major indexes closed narrowly mixed.
The Dow Jones Industrial Average fell 0.1% in Thursday's stock market trading. The S&P 500 index and Nasdaq composite rose 0.1%.
While Cisco stock plunged 9.8%, fellow Dow Jones giant Walmart tumbled 8.1% and Palo Alto stock lost 5.4%, there wasn't much fallout. Arista Networks, CrowdStrike and Zscaler were little changed. Costco Wholesale did fall modestly, but came off lows after finding support near the buy point.
It certainly helps when Microsoft and Google stock climb nearly 2%.
Sliding Treasury yields provided some support for stocks. The 10-year Treasury yield fell 9 basis points to 4.44%, down 18 basis points so far this week.
Still, market breadth was weak, with losers easily outpacing winners.
The small-cap Russell 2000 slumped 1.5% after hitting resistance at the 200-day line on Wednesday. Regional banks were notable losers. So were smaller energy companies tumbling with oil prices. Still, the Russell 200 is up 4% so far this week.
U.S. crude oil prices tumbled 4.9% to $72.90 a barrel, the lowest close in four months.
A market pullback would be helpful, letting leading stocks forge handles or other entries after making big moves.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF edged higher. The VanEck Vectors Semiconductor ETF climbed 0.4%. AMAT stock is a notable SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 1.9% and ARK Genomics ETF retreated 2.2%. Tesla stock is a major holding across Ark Invest's ETFs. Cathie Wood's Ark owns a small stake in BYD stock.
SPDR S&P Metals & Mining ETF slipped 0.5%. SPDR S&P Homebuilders ETF lost a fraction. The Energy Select SPDR ETF gave up nearly 2% and the Health Care Select Sector SPDR Fund climbed 0.4%.
The Industrial Select Sector SPDR Fund was just above break-even. GE stock is a notable XLI component.
The Financial Select SPDR ETF rose 0.4%, but the SPDR S&P Regional Banking ETF gave up 1.3%.
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Stocks Near Buy Points
Google stock rose 1.7% to 136.93, clearing the 50-day line decisively and crossing a short trendline within a flat base. That offered an early entry. GOOGL stock has an official buy point of 141.22, according to MarketSmith.
Google lost a fraction overnight as The Information reported that it's delaying the release of its Gemini AI, its rival to OpenAI's ChatGPT, into early 2024.
GE stock climbed 2.3% to 118.94, crossing a 117.96 flat-base buy point. Volume was light, with little accumulation in recent weeks.
NVO stock popped 3.2% to 99.53, rebounding from the 50-day line and retaking the 21-day line. The weight-loss drug giant is on track to have a flat base at Friday's close. The official buy point will be 104. Investors could use a short, downward-sloping trendline as an early entry, around the 100 level.
Novo Nordisk stock edged up above 100 on Friday.
Elon Musk's X Factor
Late Wednesday, Elon Musk endorsed a post that Jews stoke hatred of white people and have supported allowing "hordes of minorities" into the U.S., echoing longstanding anti-Semitic tropes. Musk replied on X, his social site formerly known as Twitter, "You have said the actual truth."
Musk's comment was denounced by many as anti-Semitic, including by some long-term, high-profile Tesla bulls.
The concern for TSLA stock investors is that Musk tarnishes the Tesla brand, which is so intertwined with his own image. That could hurt demand and prices.
In a related note, IBM suspended advertising on X, following a report that the social site ran ads for IBM, Apple, Oracle and many others next to pro-Nazi posts.
Tesla Stock
Tesla stock fell 3.8% on Thursday to 233.59, tumbling back below the 50-day line. That followed a four-day, 15.6% run in above-average volume, bringing TSLA stock back above the 200-day and 50-day averages.
Tesla stock is working on the right side of a double-bottom base with a 278.98 buy point. A downward-sloping trendline, currently near 255, might offer an early entry.
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China EV Rivals
Li Auto stock reversed 4.1% to 38.87 on Thursday. That's after moving above a 40.14 early buy point from a too-low handle on Wednesday. The maker of extended-range EVs began presales of its first all-electric vehicle, the high-end MEGA minivan, on Friday.
LI stock rebounded early Friday, suggesting a move over the 40 level again.
China EV and battery giant BYD stock sank 1.7% to 31.76, back to around an aggressive entry. Investors should now look for a still-early entry at 32.76 or 32.80. BYD also had several announcements Friday, the start of an auto show.
XPeng slumped 6.7% to 16.23, backing off from near an aggressive entry and closing below the 50-day line. Shares reversed higher Wednesday despite XPeng's weaker-than-expected Q3 results. XPeng unveiled its own EV minivan, the X9, on Friday.
XPEV stock rose modestly before the open, pointing to a retaking of the 50-day line.
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What To Do Now
Leading stocks are generally hold well after big runs while the market pauses. Not a lot of stocks were flashing buy signals Thursday. A modest market pullback could create a number of buying opportunities, but it hasn't happened yet.
There's nothing wrong with largely standing pat with current exposure, which could be quite heavy. After working hard as the new market rally took shape, you can let your money work for you.
Definitely keep updating your watchlists, looking for emerging new leadership, stocks trying to forge handles and more.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
