Dow Jones futures rose modestly overnight, while S&P 500 futures and Nasdaq futures rose steadily as Facebook’s parent Meta Platforms (FB) has risen to strong revenue.
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The stock market tried to rebound on Wednesday along with the Dow Jones giants Microsoft (MSFT) at Visa (V) jump in profits while blue-chip Boeing (BA) fallen. But the Nasdaq wiped out a big intraday gain to close the flat as the Dow and S&P 500 released slim advances.
Tesla stock rose higher, but only recovered a sliver of the fall on Tuesday. Meanwhile, TWTR’s stock fell for the second consecutive day amid fears that Tesla CEO Elon Musk could leave the deal on Twitter.
Facebook reported earnings after the closure, along with fellow tech companies PayPal (PYPL), Service Today (NOW) and Qualcomm (QCOM), as well Ford Motor (F). But all of these former leaders are in significant collapse.
Meanwhile, pandemic stock winner Teladoc Health (TDOC) also reported. TDOC stock has round-triped its big gains in 2020.
Early Thursday, Eli Lilly (LLY) and giant Dow Jones Merck (MRK) is on tap, both also close to buy points. Dow stocks Worm (CAT) at McDonald’s (MCD) also before tomorrow, along with Twitter.
Meanwhile, Apple (AAPL) will come Thursday night. Apple stock rose higher on Wednesday but hit resistance at its 200-day moving average.
Tesla (TSLA) and Microsoft stock are on the IBD Leaderboard. Microsoft’s stock and NOW are in IBD Long-Term Leaders.
Dow Jones Futures Today
Dow Jones futures were up 0.4% compared to the fair value. S&P 500 futures climbed 0.7%. Nasdaq 100 futures jumped 1.3%.
Note that overnight action on Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Basic Revenues
Facebook revenues and daily active viewing are more than predictions as revenue emerges. FB stock rose 15% in overnight trade. Shares fell 3.3% to 174.95 on Wednesday, a two -year low, after parent Google Alphabet (GOOGL) missed revenues, in a bad sign for online advertising.
PayPal revenues were in line as revenue slightly exceeded targets. PYPL stock rose 3% on extended action. Shares fell 1.3% to 82.61 on Wednesday, just above the March 2020 coronavirus low.
ServiceNow’s revenues are easily defeated in views while revenue is also leading. NOW the stock jumped 7.2% overnight. ServiceNow stock rose 2.3% on Wednesday to 466.29, after hitting a 23-month low on Tuesday.
Qualcomm’s earnings topped forecasts and the company headed higher for the current quarter, allaying fears of slowing smartphone demand. QCOM stock fell 5% in extended trading. Qualcomm stock climbed 1.2% to 135.10 on Wednesday, after falling intraday to its worst level since October. Qualcomm’s earnings and guidance are also expecting signs for Apple’s earnings Thursday night.
Ford’s revenues were mostly ahead of views as the automaker reaffirmed year -round targets. Ford stock rose 2% in overnight action. Shares rose 0.5% to 14.78 on Wednesday afterwards General Motors (GM) that it sees solid production growth in 2022.
Teladoc reported a broader-than-expected loss and a surprise $ 6.6 billion impairment charge. The telehealth specialist also cut the guidance to 2022. TDOC stock fell 34% overnight, on target for a four -year low. Teladoc stock fell 3.1% on Wednesday to 55.99, compared to its February 2021 peak of 308.
The Stock Market Rally Test has begun
The stock market rose and fell on Wednesday, eventually closing with little change. The Dow Jones Industrial Average rose 0.2% in stock market trading on Wednesday. The S&P 500 index also climbed 0.2%. The Nasdaq composite closed with less than 2 points. The small-cap Russell 2000 sank 0.4% to its lowest point since December 2020.
The price of US crude rose 0.3% to $ 102.02 per barrel. Treasury’s 10-year yield rose 4 basis points to 2.82%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) earned 0.1% profit. The iShares Expanded Tech-Software Sector ETF (IGV) closed just above the break-even, with MSFT stock and ServiceNow both large holdings. VanEck Vectors Semiconductor ETF (SMH), with QCOM stock in SMH, fell 0.5%.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) dropped 2.2% and the ARK Genomics ETF (ARKG) was 0.65%. Both hit a 23-month intraday low. Tesla stock remains No. 1 holding in Ark Invest ETFs. TDOC stock is also a major Ark Invest holding, as fund manager Cathie Wood was added to the position recently. ARKK and ARKG crashed hard overnight.
The SPDR S&P Metals & Mining ETF (XME) was up 1.8% and the Global X US Infrastructure Development ETF (PAVE) was up 0.8%. The US Global Jets ETF (JETS) climbed 0.9%. The SPDR S&P Homebuilders ETF (XHB) was down 0.2%. The Energy Select SPDR ETF (XLE) fell 1.5% and the Financial Select SPDR ETF (XLF) fell 0.1%. The Health Care Select Sector SPDR Fund (XLV) lost 0.2%.
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Tesla Stock
TSLA stock rose 0.6% to 881.51 after plunging 12.1% on Tuesday, lowering the 50-day and 200-day lines. Shares rose 918 intraday but faded sharply, unable to close above their 200-day line on Wednesday.
Tuesday’s sell-off may have been triggered by concerns that CEO Elon Musk will sell TSLA stock to finance his Twitter buyout. But in the context of growth stocks, Tesla’s stock hasn’t fallen particularly sharply over the past few weeks.
Meanwhile, Twitter stock fell 2.1% to 48.64, further retreating from the $ 54.20 acquisition price. The market sees a small-but-not-small risk that Musk will move away from the deal, which triggered a massive TWTR stock sell-off. Musk has continued to make insulting comments about Twitter, and its staff and policies, since announcing the deal on Monday.
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Market Analysis
The stock market tried to rebound on Wednesday on Microsoft and Visa earnings, but gains faltered. The Dow Jones and S&P 500 technically started stock market rally attempts, but not the Nasdaq, which closed slightly lower.
Even in high sessions, major indices are still lower than their 10-day moving average, more than their 21-day or 50-day lines. If the Dow and S&P 500 can hold on to Wednesday’s lows, a follow-through day could occur next week to confirm a new market rally.
But until then, it was a market correction, with the Nasdaq in an absolute bear market.
The earnings season will remain furious over the next two weeks, with Apple stock leading on a big Thursday. Next week, the Federal Reserve is likely to raise interest rates by 50 basis points and agree to start cutting its balance sheet.
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What to do now
The action on Wednesday was certainly not inspiring. Even if the market closes in the highest sessions, it will not be significant on its own.
For now, investors should stay on the sidelines, with little or no exposure. But stay focused and build those watchlists.
Defense companies still look strong, while energy stocks are generally holding on to bases. Iron and manure tables hold basic levels. Travel stocks and REITs try to stay or build new buy points.
But as mining stocks have recently shown, even leading sectors can quickly collapse into weak markets.
Read The Big Picture daily to stay in sync with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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