Stock futures wrestled in mixed trade Tuesday as tech stocks angled higher, while the Dow and Russell 2000 threatened to end their seven-day advances. Futu Holdings, Zedge and marijuana stock New Age Beverage shot higher on earnings. Starbucks rose as it prepared to welcome a new chairman. And an analyst price target hike lifted Apple to the top of the Dow Jones today.
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Nasdaq 100 futures climbed 0.6% above fair value, and S&P 500 futures traded up a fraction on the stock market today. Dow Jones futures lagged less than 0.1% below their break-even line. Russell 2000 futures also dipped a fraction into the red.
Commodities-linked stocks weighed on early trade, with TechnipFMC (FTI) at the bottom of the S&P 500, and Chevron (CVX) down hardest on the Dow. Oil stocks posted seven of the 10 heaviest early declines on the S&P 500.
On the Nasdaq 100, Fox (FOX) rallied 2.9%, following Bloomberg’s report late Monday that Fox’s streaming service Tubi planned to begin financing original content. Acquired by Fox for $440 million a year ago, Tubi in September reported 33 million users. Fox shares are extended from a January breakout.
Starbucks (SBUX) climbed 1.7% in early trade, leading the Nasdaq 100 and S&P 500, as Ariel Investments President and Co-Chief Executive Mellody Hobson prepares to take over the company’s chairman of the board seat on Wednesday. BTIG upgraded the stock to buy, from neutral, with a price target at 130. Starbucks stock is in a buy range, above a flat base buy point at 107.85.
China, Chips Stocks Rise; Futu, Zedge Leap, FuelCell Dives, On Earnings
A number of China-based names were in motion, as U.S. Secretary of State Antony Blinken prepared to meet with China’s top diplomat Yang Jiechi in Alaska on Thursday. Futu Holdings (FUTU) jumped more than 8% as analysts dug into its fourth-quarter report. 360 DigitTech (QFIN) popped 5.5%, leading the IBD 50 list. Pinduoduo (PDD) gained 4.6%.
Smartphone personalization app developer Zedge (ZDGE) rallied 21% in premarket trade. The company topped fiscal second-quarter targets late Monday, and reported 141 million unique users downloaded 2.1 billion items during 2020. Zedge shares were extended at the end of trade Monday, after a rebound from 10-week support.
Chip stocks picked up in early trade after taking a nice bounce on Monday. Advanced Micro Devices (AMD) climbed 1.3% in early trade. ON Semiconductors (ON) gained 1.6% and Micron Technology (MU) added 1.7%, while IBD Leaderboard stock Nvidia (NVDA) advanced 1.3%. The iShares PHLX Semiconductor ETF (SOXX) ticked up 1.1% in premarket trade.
Alternative energy leader FuelCell Energy (FCEL) dived 13% after missing analyst earnings targets in its fiscal first-quarter report.
Dow Jones Today: Apple Gains On Price Target Hike
Apple (AAPL) shares moved up 0.9%, leading the Dow Jones today. Evercore ISI raised the stock’s price target to 175 from 163, with an outperform rating. Apple stock is rising after notching three weeks of very tight closes, a classic sign of a consolidation low mark. That floor also touched back for a test of support at the stock’s 40-week moving average. The pullback did not dig deep enough to undercut Apple’s prior base, so the chart did not reset its base count.
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Microsoft (MSFT) also remains in its buy range, weaving over and under support at its 21-day exponential moving average, above a 232.96 buy point. Shares rose 0.3% early Tuesday.
Bond Yields Steady, Fed Meeting To Begin
Bond yields flattened, with the 10-year yield down 1 basis point to 1.60%. Yields had jumped to a 52-week high above 1.63% on Sunday, and a quick rise from lows around 0.50% in August raised inflation worries. Despite the rapid advance, yields remain in a healthy range, after starting 2020 at around 1.8%, which was down from about 2.7% a year earlier.
The Federal Open Market Committee swings into its two-day meeting this morning, with a policy announcement due Wednesday afternoon. Retail sales and import/export data for February are due out from the Commerce Department before the market opens. Industrial production, business inventories and the National Association of Home Builders’ Housing Market Index are due out after the start of regular trade.
Coronavirus Update: Vaccinations Near 110 Million
The seven-day average for new Covid-19 cases reported daily in the U.S. edged up to 55,423 on Monday. That was a slight uptick from Sunday, but down more than 78% from the peak of 255,572 reached on Jan. 11, according to Worldometer.
New cases reported worldwide have been ticking higher. New cases reported, averaged across the prior seven days, increased to 428,862 on Monday. That was up from 361,901 on Feb. 20, and below the high of 745,985 new cases recorded on Jan. 11.
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Deaths also continued lower in the U.S., with the seven-day average dropping to 1,282 on Sunday – the lowest level since Nov. 17. U.S. deaths hit a high of 3,447 on Jan. 26. Worldwide, the seven-day average for deaths reported daily declined to 8,482 on Monday, down from a high of 14,462 on Jan. 26.
The Centers for Disease Control and Prevention reports the count of vaccine doses distributed so far rose on Monday to 135.85 million. Some 109 million doses have been administered, with 11.5% of the total population fully vaccinated.
Bitcoin Eases, PayPal Seeks Support
Bitcoin backed off to trade below $56,000 on Tuesday, according to CoinDesk. The cryptocurrency had climbed to a record high above $61,500 on Saturday.
Among Bitcoin-related stocks, Marathon Patent Group (MARA) rebounded 2.7%, while MicroStrategy (MSTR) traded down 0.5%.
IBD Leaderboard stock PayPal Holdings (PYPL) advanced 0.8%, still looking to retake support at its 10-week moving average. PayPal stock has been influenced by Bitcoin price swings since October, when the company launched a cryptocurrency trading service that deals in Bitcoin.
Russell, Dow Jones Today: Aiming For Day Eight
The Russell 2000 and the Dow Jones today are looking at a possible eighth-straight daily advance, which would mark the longest rally for both indexes since September 2019. The Dow is up 6.5% so far for March. The Russell has a 7.2% gain, and is working on its sixth-straight monthly advance. Both indexes are knocking off record highs.
The S&P 500 now has a five-day rally under its belt and is also picking off new highs after a rebound from support at its 10-week moving average. The Nasdaq continues to struggle vs. resistance at its 50-day/10-week line. It is pulled back a modest 5% from its Feb. 16 high, and showing a 2.1% gain so far for March.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Growth stocks are to some degree shadowing the Nasdaq. The IBD 50 Index is also attempting to retake support at its 50-day/10-week line, pulled back a little more than 8% from its mid-February high. The Innovator IBD 50 ETF (FFTY) is fairing slightly better than the IBD 50 Index, up 3.9% for March, back above support at its 10-week line and only 4% off its February record.
Good to keep in mind that, while the Nasdaq struggles to retake support, it is trading more than 49% above where it was at this time a year ago. The Dow is up 39% and the S&P 500 is 38.5% above its March 15, 2020 close. Meanwhile, the Russell 2000 has logged an 88% gain over the past 12 months.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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