Dow Jones futures rose modestly early Friday, along with S&P 500 futures and Nasdaq futures. The March jobs report looms as a key stock market test. Johnson & Johnson will buy Shockwave Medical.
The stock market rally started off strong Thursday on higher-than-expected jobless claims. But key indexes gave up solid gains in the afternoon, reversing lower on Mideast tensions.
Google parent Alphabet reportedly is mulling a bid for marketing software maker HubSpot. HubSpot stock broke out of a base, while Google remains in a buy zone. Salesforce.com reversed lower from an early entry on the Google-HubSpot news.
Several stocks flashed buy signals Thursday, but fell back with the market.
Tesla rebounded, paring weekly losses from disastrous delivery figures. But Tesla stock is below key levels.
Nvidia fell below a key level but is still trading within a recent range. Rival Advanced Micro Devices suffered major losses. Nvidia stock is on IBD Leaderboard and the IBD 50.
J&J To Buy Shockwave
Early Friday, Dow Jones giant Johnson & Johnson said it would acquire Shockwave Medical for $13.1 billion, or $335 a share. Both stocks rose slightly early Friday.
SWAV stock had surged 68% to 319.99 as of April 4 in 2024, with takeover speculation among the driving forces.
Jobs Report
The Labor Department will release the March jobs report at 8:30 a.m. ET. Economists expect nonfarm payrolls to rise by 200,000 after February's 275,000 gain. The jobless rate is seen holding at 3.9%. Average hourly earnings should rise by 0.3% vs. February, with the yearly gain cooling to 4.1% from 4.3%.
The employment data follows the rise in weekly jobless claims, but the overall economy trend has been strong in the U.S. along with improvement in China and Europe. Along with rising oil and commodity prices, that's raised concerns that inflation will not keep cooling.
Markets see a 69% chance of a Fed rate cut in June.
Dow Jones Futures Today
Dow Jones futures rose 0.25% vs. fair value. S&P 500 futures advanced 0.3% and Nasdaq 100 futures climbed 0.4%.
The 10-year Treasury yield rose slightly to 4.33%.
The jobs report will almost surely swing Dow Jones 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 gave up gains in the afternoon for a second straight session, with Wednesday's downside reversal much more emphatic.
Israeli Prime Minister Benjamin Netanyahu said Israel will be aggressive vs. Iran and its allies, declaring, "Those who harm us or plan to harm us, we will harm." That triggered a stock market reversal and another gain in crude oil futures. Netanyahu's statement came as President Joe Biden pushed hard for an Israeli cease-fire with Hamas.
The Dow Jones Industrial Average slumped 1.35% in Thursday's stock market trading, falling for a fourth straight session and undercutting the 50-day line for the first time since Nov. 2. Salesforce stock was the biggest Dow loser. The S&P 500 index declined 1.2%, closing below its 21-day line for the first time in three months.
The Nasdaq composite, up 1.2% intraday, closed down 1.4%, fractionally below the 10-week line for the first time since early November.
The small-cap Russell 2000 fell 1.1%, back below the 21-day line.
Strong mornings, weak closes aren't a great sign for the market. Still, the major indexes aren't far from highs. A slightly longer pause could be constructive.
A number of leading stocks teased buy signals once again but fell back. But one good market day could unleash a good crop of buying opportunities.
Friday's jobs report could provide that push — or send the major indexes and key stocks back below support levels
U.S. crude oil prices rose 1.4% to $86.59 a barrel, up 6.4% over the last five sessions to the highest price since late October.
The 10-year Treasury yield fell nearly 5 basis points to 4.31%, pulling back slightly for a second straight session after hitting a 2024 high of 4.43% Tuesday morning.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF fell 1.2%, reversing lower from the 50-day line. Salesforce is a major IGV component, with HubSpot a significant holding. The VanEck Vectors Semiconductor ETF slumped 2.7%, with Nvidia stock the dominant holding and AMD a key member.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 1.4% and ARK Genomics ETF was down 1.6%. Tesla stock is a major holding across Ark Invest, with Cathie Wood bulking up on shares in recent weeks.
The SPDR S&P Metals & Mining ETF retreated 1.6%. The SPDR S&P Homebuilders ETF stepped down 1.4%. The Energy Select SPDR ETF dipped less than 0.1% and the Health Care Select Sector SPDR Fund fell 1.4%.
The Industrial Select Sector SPDR Fund slipped 0.9%. The Financial Select SPDR ETF declined 1.1%.
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Google Stock
Google stock fell 2.8% to 150.53, largely on the market reversal. Shares dropped below a 152.15 handle buy point, cleared on Monday. The search giant is considering charging for premium AI search tools, according to the Financial Times. Meanwhile, Google is mulling a bid for HubSpot, according to Bloomberg.
HUBS stock jumped as high as 693.85 intraday, clearing a 660 flat-base buy point. The digital marketing software specialist closed up 4.9% to 657.68, just below that entry.
But buying a stock on takeover buzz carries a big risk if no deal happens.
Salesforce stock fell 3.3% to 294.76 following the Google-HubSpot report, undercutting the 50-day line and the low of its recent consolidation. Shares tried to rebounded but faded with the market. Shortly after the open, CRM stock hit 311.30, topping a short trendline. Salesforce is on track for a flat base after Friday's close.
Nvidia Stock
Nvidia stock fell 3.4% to 859.05, finishing below the 21-day moving average for the first time in three months. It was the lowest close since March 11. Still, the AI chip leader appears to be a few weeks into a possible base that started with an ugly March 8 downside reversal. That came a day after NVDA stock closed 41.9% above its 50-day line, the most extended it's been in 20 years. Nvidia closed Thursday just 8.3% above its 50-day line and 5% above its 10-week.
But while Nvidia and most AI chip stocks suffered modest losses, AMD had a nasty sell-off. Shares hit resistance at the 50-day line, then plunged 8.3% to 165.83. AMD stock has been lagging Nvidia, in particular since the March 8 reversal day.
Tesla Stock
Tesla stock rose 1.7% to 171.18, slashing intraday gains on the market reversal. Shares are down 2.7% for the week, but that's impressive given the EV giant's stunningly weak first-quarter deliveries report on Tuesday. Tesla is already cutting prices and offering new incentives in key markets to start Q2.
TSLA stock is still below its 10-week line, which has been a key resistance level in 2024.
Shares are down 31.1% in 2024, but Tesla stock hasn't gotten much cheaper on a forward price-to-earnings ratio.
What To Do Now
Once again, stocks showed strength in the morning then fizzled in the afternoon.
So far, the market rally is just pausing for a couple of weeks, showing normal action. A sideways market can be positive in the long run, but can be tricky at the time.
But investors who jumped on buying opportunities on Wednesday and Thursday morning likely are sitting on losses if they didn't cut those positions.
If the market reacts well to Friday's employment figures, then recent buys will look savvy and investors will get a number of fresh buying opportunities. A market sell-off on the jobs report could trigger sell signals, especially for newer positions.
So have your watchlists and your exit strategies ready.
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