Dow Jones futures were little changed early Wednesday, while S&P 500 futures and Nasdaq futures rose slightly. ELF Beauty, Chipotle Mexican Grill and Snap headlined key earnings late.
The stock market rally saw slim to modest gains Tuesday, with the Nasdaq rallying to close fractionally higher.
Palantir Technologies, BellRing Brands and Varonis Systems flashed buy signals after earnings, but with very different moves. PLTR stock gapped up powerfully while Veronis jumped but then pared gains. BRBR stock wavered around a buy point.
ELF Beauty, Chipotle, Snap, Amgen, Fortinet, Tenable, Ford Motor, Azek and Enphase Energy were among the notable earnings reports.
Cybersecurity stocks Fortinet and Tenable were big winners overnight, signaling possible buys, while Azek gapped out of a buy zone. Ford jumped, signaling an aggressive entry above its 200-day line.
CMG stock rose modestly and ELF rose solidly while Amgen was little changed. All are extended. ENPH stock surged but has been in a long downtrend.
Snap stock cratered overnight on weak revenue and guidance. The Snapchat parent had touched a trendline entry just before Tuesday's close.
Early Wednesday, Uber Technologies turned modestly lower despite strong earnings amid mixed guidance. Alibaba slightly beat views and announced a $25 billion stock buyback, but shares reversed solidly lower. Hilton Worldwide edged lower on earnings guidance. Uber and HLT stock are significantly extended. Alibaba is trying to rebound from a long slide.
Meanwhile, Walt Disney's ESPN, Fox and Warner Bros. Discovery will launch a joint sports streaming service this year. Disney, which reports Wednesday night, fell slightly. Fox and WBD stock rose modestly.
ELF Beauty and UBER stock are on IBD Leaderboard. ELF stock is on the IBD 50. FTNT stock is on the IBD Big Cap 20. The video embedded in the article reviewed Tuesday's market action and analyzes PLTR stock, BellRing Brands and Varonis.
Dow Jones Futures Today
Dow Jones futures were just above fair value, with DIS stock a slight drag. S&P 500 futures climbed 0.15% and Nasdaq 100 futures rose 0.3%.
The 10-year Treasury yield rose a few basis points to 4.13%.
Crude oil futures climbed slightly.
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 Dow Jones Industrial Average rose 0.4% in Tuesday's stock market trading. The S&P 500 index climbed 0.2%. The Nasdaq composite edged up less than 0.1% after trading lower for most of the session. The small-cap Russell 2000 climbed 0.85%, retaking its 50-day line.
The Invesco S&P 500 Equal Weight ETF rose 0.6%. The First Trust Nasdaq 100 Equal Weighted Index ETF edged up 0.2%.
Market breadth was strong Tuesday, but generally has been weak in 2024.
Also, the number of buying opportunities has dwindled, with many leading stocks extended. Some stocks setting up have earnings in the near term, such as Expedia and Affirm Holdings. The recent breakouts or buy signals that have worked have often been powerful earnings gap-ups, while many others quickly undercut the entry.
With the market pausing for a couple days, the Nasdaq is 4.9% above its 50-day line and no longer extended.
U.S. crude oil prices rose 0.7% to $73.31 a barrel.
The 10-year Treasury yield fell 7 basis points to 4.09% after soaring in the prior two sessions.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF dipped 0.2%; Fortinet, Palantir and VRNS stock are all IGV members. The VanEck Vectors Semiconductor ETF fell 1.1% as Nvidia and AMD retreated.
Reflecting stocks with more speculative stories, the ARK Innovation ETF popped 3.3% and ARK Genomics gained 3.8%.
The SPDR S&P Metals & Mining ETF edged up 0.1%, and the Global X U.S. Infrastructure Development ETF added 0.6%. U.S. Global Jets ascended 3.35%. SPDR S&P Homebuilders and Energy Select SPDR both edged up 0.3%.
The Health Care Select Sector SPDR Fund climbed 1.1%, and the Industrial Select Sector SPDR Fund advanced 0.9%
The Financial Select SPDR ETF edged up 0.2%. The SPDR S&P Regional Banking ETF slumped 1.3%.
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Stocks Flashing Buy Signals
Palantir stock skyrocketed 31% to 21.87, gapping above the 50-day line and other resistance areas, including a 21.85 consolidation buy point of 21.85. At this point, investors may want to wait to see if PLTR stock can hold the gains for a few days. Late Monday, Palantir reported Q4 earnings doubled while sales growth accelerated for a second quarter, to 20%. Commercial growth boomed, with the AI play bullish on 2024 as well.
BellRing Brands stock got as high as high as 58.50 and as low as 55.76 before settling down 1.3% to 56.84. The maker of protein shakes and nutrition bars cleared a 57 flat-base buy point on Monday, but is now just below that level. Late Monday, BellRings reported a 30% EPS gain with revenue up 19%, beating views.
Varonis gapped as high as 50.60, closing up 6.7% to 48.60. VRNS did rebound off its 10-week line and cleared several weeks of sideways action. Investors could buy here, but perhaps could wait to see if the database software play can pause and then move higher. Late Monday, Varonis reported a 29% EPS gain with revenue up 8%.
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Market Rally Analysis
The market rally is still in good shape. However, breadth has been an issue in 2024. Buying opportunities have been limited recently, with a fair number of those struggling.
A number of stocks setting up have earnings due. While Palantir, Varonis and perhaps Fortinet are big earnings gap-up buying opportunities, Snap stock shows the risk of buying just before earnings.
So investors should be cautious about adding exposure. Do so incrementally, or simply hold your current exposure.
Whether you take partial profits in some big winners depends on investing style, your conviction in the stock, the size of your holding and more.
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