Dow Jones Futures Rise: Market Rally Extends Momentum as Apple Pops, Amazon Soars on Profits

Dow Jones futures rose overnight, along with S&P 500 futures and especially Nasdaq futures, with Apple (AAPL) and Amazon.co.uk (AMZN) headlining another wave of overnight gains.




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The stock market rally showed strength on Thursday, brushing aside a post-Fed pullback and weak earnings to edge higher.

Key overnight wins

Besides Apple and Amazon, First Solar (FSLR), Intel (INTC) and Year (ROKU) were notable reports.

Apple stock edged higher overnight on better-than-expected fiscal third-quarter results and upbeat commentary.

Amazon shares surged in extended trading. The e-commerce and cloud computing giant leads in revenue views.

FSLR stock rose slightly overnight after First Solar easily beat EPS views and also topped sales. Shares soared 15% on Thursday as Congress made progress on legislation that includes solar and green power incentives.

Intel stock plunged into prolonged action after the struggling chip giant missed second-quarter views and slashed estimates for the full year.

Roku stock slumped late after the streaming platform reported a bigger-than-expected loss and fell short of revenue, citing a “significant downturn” in advertising. Streaming hours watched were down slightly from the first quarter. Roku also fell sharply in the third quarter. Roku’s stock is expected to plunge to its worst levels since the March 2020 coronavirus low.

Early Friday, Exxon Mobil (XOM), Chevron (CLC), Astra Zeneca (AZN) and AbbVie (ABBV) are available. AZN and AbbVie stocks are not far from the highs. XOM stock and Dow Jones giant Chevron are beginning to rebound from a pullback.

Dow Jones Futures Today

Dow Jones futures were up less than 0.1% from fair value. S&P 500 futures rose 0.6%. Nasdaq 100 futures jumped 1.3%. Apple and Intel stocks are components of the Dow Jones, S&P 500 and Nasdaq.

Remember that overnight action on futures contracts on Dow and elsewhere does not necessarily translate into actual trading in the next regular trading session.


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Stock market rally

The stock market rally fell shortly after the open, but quickly strengthened, with major indexes advancing solidly.

US GDP fell at an annual rate of 0.9%, the second consecutive quarter of slightly declining economic activity. However, consumer spending remained positive. The data further softens the Fed’s rate hike forecast without signaling a massive meltdown.

A new push for a tax and spending bill that includes green provisions has lifted solar stocks and other green energy plays.

The Dow Jones Industrial Average jumped 1% in stock trading Thursday. The S&P 500 index rebounded 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, then maybe a quarter-point move in December.

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Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rebounded 1.75%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1.9%. ETF VanEck Vectors Semiconductor (SMH) rose 1.2%, with Intel stock a notable holding.

The SPDR S&P Metals & Mining ETF (XME) rose 0.75% and the Global X US Infrastructure Development ETF (PAVE) jumped 2.7%. The US Global Jets ETF (JETS) edged up 0.5%. The SPDR S&P Homebuilders ETF (XHB) jumped 2.1%. ETF Energy Select SPDR (XLE) gained 0.6%, with Exxon and CVX shares both being huge constituents. The Financial Select SPDR ETF (XLF) rose 0.7%. The SPDR healthcare sector fund (XLV) rose 0.6%.

Reflecting more speculative stocks, ARK Innovation ETF (ARKK) fell 0.4% and ARK Genomics ETF (ARKG) fell 1.3%. Roku stock is a notable holding of ARKK.


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Apple revenue

Apple’s earnings fell 8%, but slightly exceeded views. Sales climbed 2% to $82.96 billion, slightly beating fiscal Q3 views. The iPhone giant expects revenue growth to accelerate despite “pockets of sweetness”.

Apple stock rose 3% overnight, signaling a possible move above the 200-day line.

The shares edged up 0.4% to 157.35 in regular trading on Wednesday. AAPL stock has rallied strongly since hitting a 52-week low on June 16. The relative strength line is just at new highs. The RS line, the blue line in the charts provided, tracks a stock’s performance against the S&P 500 Index.

Amazon Earnings

Amazon’s earnings were a bit confusing, with a net loss of $2 billion clouded by various particular factors. But revenue soared 7% to $121.2 billion, topping views as Amazon Web Services revenue growth accelerated to 33%.

Amazon also generated bullish revenue in the third quarter.

AMZN stock climbed 14% in extended action, signaling a move towards its 200-day line. The shares rose 1.1% to 122.28 on Thursday. Amazon stock recently regained its 50-day line.

Market rally analysis

The stock market rally retreated on Thursday morning, with the Nasdaq down more than 1% intraday. But the major indices quickly got rid of that and went up. The Nasdaq moved above last week’s highs, after the Dow Jones and S&P did on Wednesday.

A pullback would not have come as a surprise as the second-day reaction to the Fed meeting after Wednesday’s big spike, and with major indices at some key technical levels. Low income or advice from Metaplatforms (META), Qualcomm (QCOM) and others also offered a reason for a retreat.

So Thursday’s market action definitely showed strength.

The early June highs are the market’s next hurdle. A market break for a few days or even weeks wouldn’t be bad. This would allow some stocks to form handles and the moving averages to catch up.

Hershey (HSY) flirted with an early buy point on earnings as rollin (ROL) broke powerfully in a second day of earnings reaction. Carlisle (CSL) deviated from an earnings basis as Quantum Services (PWR) broke as part of the green power surge, but both are somewhat extended from their 50-day lines.

Pfizer (PFE) fell after earnings, but rebounded from lows, not far from a trendline. Vertex Pharmaceuticals (VRTX), in 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, as a massive week of news is almost over. Investors should take advantage of this by adding exposure. But do it carefully. There is always the risk of individual jerks or the market encountering 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 tune with market direction and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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