Dow Jones futures rose solidly early Thursday, along with S&P 500 futures and Nasdaq futures, with Disney, Robinhood and chipmaker Impinj among the notable companies reporting earnings overnight.
The stock market rally pulled back Wednesday with Google parent Alphabet a big drag following its artificial intelligence event.
There's an AI market frenzy, with Microsoft touting its chatbot tech Tuesday while Baidu and Alibaba move ahead on their own chatbot projects.
But plenty of stocks gave up ground, especially techs.
Still, the market uptrend looks healthy, with the major indexes all having an inside day, trading within Tuesday's range.
Dow Jones giant Walt Disney and Robinhood reported late Wednesday. So did chipmakers Impinj, Monolithic Power and Axcelis Technologies, and semiconductor-equipment maker Advanced Energy Industries. Human resources software maker Ceridian HCM and buy-now-pay-later leader Affirm Holdings also had quarterly results.
DIS stock was a big earnings winners, while Robinhood, Ceridian, Impinj, Monolithic Power and ACLS stock also rose. AFRM stock plunged.
ACLS stock is on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.6% vs. fair value. Disney stock is a Dow Jones stock. S&P 500 futures advanced 0.7% and Nasdaq 100 futures jumped 1.1%.
The 10-year Treasury yield fell 7 basis points to 3.58%.
Crude oil futures fell slightly.
Copper prices, which have been sliding, rose 1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally gave up ground early on and kept sliding, closing not far from session lows.
The Dow Jones Industrial Average fell 0.6% in Wednesday's stock market trading. The S&P 500 index lost 1.1%. The Nasdaq composite retreated 1.7%. The small-cap Russell 2000 declined 1.5%.
U.S. crude oil prices rose 1.7% to $78.47 a barrel.
The 10-year Treasury yield dipped 2 basis points to 3.65%.
Google Dives On AI Event
Google tumbled Wednesday after showcasing its new Bard artificial intelligence chatbot. An ad demonstrating Bard offered an incorrect answer. More broadly, there's a sense that Microsoft is ahead of rivals such as Google, as well as China's Baidu and Alibaba. Microsoft on Tuesday said that it will integrate Prometheus, a specialized form of OpenAI's ChatGPT, into its Bing search service and Edge browser.
Meanwhile, a longtime Google executive, Clay Bavor, is leaving to start an AI firm with ex-Salesforce.com co-CEO Bret Taylor.
Google stock tumbled 7.7%, gapping below its 200-day line. On Tuesday, GOOGL stock popped 4.6%, hitting its best levels in nearly five months.
MSFT stock edged down 0.3% to 266.73, off intraday highs of 276.76. But that's after Tuesday's 4.2% advance.
Baidu gapped up 12.2% Tuesday as it confirmed it would open up its "Ernie" chatbot in March. BIDU stock sank 4.92% on Wednesday.
Alibaba stock slipped 0.4% as the internet giant said it's working on an AI chatbot as well.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF retreated 1.7%, while the Innovator IBD Breakout Opportunities ETF fell 0.6%. The iShares Expanded Tech-Software Sector ETF shed 0.8%, with Microsoft stock a top holding. The VanEck Vectors Semiconductor ETF gave up nearly 2%.
The SPDR S&P Metals & Mining ETF fell back 2.65% and the Global X U.S. Infrastructure Development ETF ceded 0.8%. U.S. Global Jets ETF descended just 0.2%. SPDR S&P Homebuilders ETF stepped down 1.4%. The Energy Select SPDR ETF gave up 0.9% and the Financial Select SPDR ETF dropped 0.6%. The Health Care Select Sector SPDR Fund dipped 0.3%.
Reflecting more-speculative story stocks, ARK Innovation ETF retreated 2.9% and ARK Genomics ETF skidded 4%.
Five Best Chinese Stocks To Watch Now
Key Earnings
Disney earnings topped while Disney+ subscriptions fell for the first time ever following a price hike, but less than feared. The media and entertainment giant will cut 7,000 jobs. DIS stock leapt 6% in premarket trade. Shares edged up 0.1% to 111.78 on Wednesday, working on a cup base with a 126.58 buy point.
Robinhood reported a wider-than-expected loss while revenue also fell short. HOOD stock rose 4% in extended trade. Shares tilted down 0.8% at 10.47 on Wednesday. Robinhood stock has a 12.86 cup-shape bottoming base buy point, according to MarketSmith analysis.
SPECIAL REPORT: Best Online Brokers 2023
Impinj earnings topped views and the company guided Q1 revenue higher. PI stock rose slightly after hours, signaling a move back toward a buy point. The tracking-chip play fell 3% to 125.08 on Wednesday. Impinj stock broke out of a cup base on Jan. 18, but has been trading around the 129.12 buy point since then, finding support at the 50-day line Tuesday morning.
Monolithic Power earnings topped views, while revenue came in a whisper light. It guided in line for current-quarter revenue. MPWR stock popped overnight. Shares fell 1% to 463 on Wednesday.
Axcelis earnings topped views, and the company offered bullish guidance. ACLS stock rose 2% in extended action. Shares dropped 1% on Wednesday to 117.57, still near a record high. Axcelis stock is extended from a cup-with-handle base that wasn't definitively cleared until early January.
Advanced Energy earnings topped views. AEIS stock edged lower in extended trading. Shares dipped 0.4% on Wednesday to 97.25, in range from a 96.42 cup-with-handle buy point.
Ceridian late Wednesday reported a smaller-than-expected loss while revenue topped. CDAY stock rose in extended trade, moving above a buy area. Shares rose 3 cents to 74.63 on Wednesday, holding a 73.14 buy point.
Affirm missed views and guided low. The BNPL specialist also will cut 19% of its staff. AFRM stock plunged 18% early Thursday. Shares already tumbled 6.9% on Wednesday. After more than doubling from late December to early February, Affirm stock has fallen back hard from the 200-day line.
Market Rally Analysis
The stock market rally retreated Wednesday, giving up much of the prior day's gains.
Google's sell-off, along with fellow megacaps Amazon.com and Meta Platforms, weighed on the S&P 500 and Nasdaq. But there were plenty of tech losers on Wednesday.
So far the market rally is pulling back in a healthy fashion after big gains.
Volume was once again light on the downside. The major indexes are still trading in the range of the past several days, holding above key levels.
Wednesday was an inside day for the key indexes, all trading above or around their 10-day moving average.
That's offering a chance for many leading stocks to form handles or pull back to key moving averages. Still other stocks can show relative strength by continuing to move higher.
Time The Market With IBD's ETF Market Strategy
What To Do Now
This pullback looks modest and normal right now. Ideally, the market rally pauses or edges lower for a few more days or weeks, then takes off, triggering a slew of new buying opportunities.
So you should be building up your watchlists, tracking the wide array of intriguing setups.
But the pullback could intensify, especially for specific sectors and stocks. So you likely want to see some renewed strength before adding more exposure.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
