Dow Jones futures were little changed early Friday, along with S&P 500 futures and Nasdaq futures. Apple and Amazon.com headlined a huge night of earnings, with the July jobs report on tap before the open.
After Wednesday's sell-off, the stock market rally pared modest morning declines to finish only slightly lower Thursday, even as Treasury yields kept spiking higher.
It was another day of big earnings winners and losers. That continued overnight.
In addition to Apple stock and Amazon, software plays Cloudflare, DigitalOcean, Fortinet, Atlassian, Appian and Dropbox reported Thursday night.
So did online travel stocks Airbnb and Booking Holdings, as well as DraftKings, Coinbase Global, Floor & Decor and Gilead Sciences.
Microchip Technology, Universal Display, Square parent Block, Progyny, TransMedics Group, 10X Genomics and Monster Beverage also released quarterly financials.
Cathie Wood's ARK Invest has significant holdings of COIN stock, DraftKings and Block.
Winners: Amazon stock was a big winner. DKNG stock jumped on its first-ever adjusted profit. BKNG stock, OLED and TEAM shot up as well. DBX, BKNG, NET and PGNY rose.
Losers: Fortinet, TransMedics and DOCN stock sold off, with Floor & Decor tumbling. MCHP, SQ, TXG, COIN, APPN and MNST fell. Apple stock declined modestly.
Some of the winning stocks could be actionable Friday, including Amazon.
The strong results of Amazon, Atlassian and Cloudflare also buoyed software makers MongoDB, Snowflake and Datadog. The Fortinet results and guidance, including delayed deals, sent cybersecurity plays lower, notably Palo Alto Networks.
Apple and Amazon earnings are discussed in more detail below.
DKNG stock is on IBD Leaderboard. FTNT stock is on IBD Long-Term Leaders. DOCN stock, Fortinet, Microchip and TransMedics are on the IBD 50.
Jobs Report
Economists expect the July jobs report to show nonfarm payrolls rose by 200,000 after June's increase of 209,000. The jobless rate should hold at 3.6%. Average hourly earnings are forecast to climb 4.2% vs. a year earlier, down from June's 4.4%.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures edged higher. Nasdaq 100 futures rose 0.1%. Apple stock is a Dow Jones, S&P 500 and Nasdaq component. AMZN stock is part of the S&P 500 and Nasdaq.
The 10-year Treasury yield held at 4.19%.
Crude oil futures edged higher while copper prices sank more than 1%.
The jobs report, due out at 8:30 a.m. ET, is sure to swing Dow futures and Treasury yields.
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 opened lower, extending Wednesday's tech-led sell-off as Treasury yields kept running. But the indexes pared losses, briefly turning positive before closing off slightly.
The Dow Jones Industrial Average fell 0.2% in Thursday's stock market trading. The S&P 500 index declined 0.25%. The Nasdaq composite dipped 0.1%. The small-cap Russell 2000 lost 0.3%.
The 10-year Treasury yield leapt 11 basis points to 4.19%, up 23 basis points in three days. The 10-year yield hit fresh nine-month highs and isn't far from the long-term peak of 4.33% set last October.
U.S. crude oil prices jumped 2.6% to $81.55 a barrel, with Saudi Arabia again extending voluntary production cuts.
The market rally is still "uptrend under pressure" following Wednesday.
While the indexes held up, there were a lot of big moves for individual stocks, especially on earnings. While MercadoLibre and Clorox were among the big winners, there were plenty of losers. Some losers, like HubSpot, beat views but didn't raise full-year guidance enough.
Overall, chip and software sectors are at key levels, much like the major indexes.
Industrials and housing-related stocks still look strong, while transports, energy and financial areas are coming on.
Travel plays came under more pressure, as Expedia and Hyatt Hotels became the latest to give disappointing results.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF declined 0.6%. The iShares Expanded Tech-Software Sector ETF retreated 0.7%, with FTNT stock a member. The VanEck Vectors Semiconductor ETF slipped 0.3%.
Reflecting stocks with more speculative stories, the ARK Innovation ETF fell 1.1% and ARK Genomics slumped 3.55%. DKNG stock, Coinbase and Square-parent Block are top-10 holdings across ARK Invest's ETFs. Cathie Wood's also owns some MercadoLibre and TXG stock.
The SPDR S&P Metals & Mining ETF edged down 0.2%. The U.S. Global Jets ETF descended 2.4%. SPDR S&P Homebuilders gave up 1.1%, with FND stock a key component. The Energy Select SPDR ETF rose 1%, and the Health Care Select Sector SPDR Fund fell 0.5%.
The Industrial Select Sector SPDR Fund retreated 0.6%. The Financial Select SPDR ETF edged up 0.1%. The SPDR S&P Regional Banking ETF climbed 0.9%.
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Apple Earnings
Apple earnings beat views with revenue down 1%, just matching forecasts and falling for the third straight quarter vs. a year earlier. Services revenue buoyed results, but iPhone revenue declined again. The Dow tech tech signaled another quarter of declining sales..
Apple stock fell more than 2% in premarket trade. AAPL stock dipped 0.7% to 191.17 on Thursday, closing below its 21-day line for the first time in nearly five months.
Amazon Earnings
Amazon earnings and revenue beat views, with Amazon Web Services up 12%. The e-commerce and cloud-computing giant also gave bullish guidance. CFO Brian Olsavsky said that AI will be at "at the heart of what we do."
AMZN stock jumped nearly 9% to 140 in overnight action. Amazon stock edged up 0.55% on Thursday to 128.91, holding the 50-day line but stopping just short of its 21-day.
A bullish move from the 50-day line could offer a buying opportunity for Amazon, with the July 31 high of 133.87 as a possible trigger point. Investors also could view the recent pause as a handle going back nearly a year. That buy point is 136.65, but 133.87 would been an early entry.
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What To Do Now
The market rally is under pressure, though it was nice to see the indexes resist further selling, at least for a day. This may be a long-needed pause that lets leading stocks forge real bases or pullbacks to the 50-day line, and then go on a sustained run. But right now, it's time to be more defensive.
If the Nasdaq retreated to the 50-day line, a relatively modest move, many tech leaders could fall another 5%, 10% or more. While some stocks may be holding up well so far, sometimes leaders will stay strong, until they break.
You might trim your exposure by pruning recent or add-on buys that have faded or soured, as well as partial profits on some longer-term holdings.
While a few stocks are flashing buy signals, mostly on earnings, it's not a great time to add exposure. It's better to plan for the next clear uptrend. So build up your watchlists. The market pullback and earnings season mean there could more turnover in your lists.
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