Dow futures rose early Wednesday, along with futures for the S&P 500 and Nasdaq futures, supported by… Nike (from f fedex (FDX) Earnings top fees.
The stock market rally snapped a four-day losing streak. Perhaps Wednesday will provide more of a bounce. However, the S&P 500 and the Nasdaq are still below the 50-day moving average.
while, an Apple (AAPL) dealt a bear market decline on Tuesday, one day later Amazon.com (AMZN) did.
Tesla (TSLA) extended its decline, Tuesday, paring all its gains since the August 2020 stock split. Tesla stock rose early Wednesday after Elon Musk again vowed to find a new Twitter CEO. Tesla is said to be eyeing new layoffs.
On the plus side, oilfield services are playing out Schlumberger (SLB), Halliburton (HAL) f ProFrac (ACDC) is showing strength, as Schlumberger and ACDC shares flashed early buying points on Tuesday.
The video embedded in the article discussed Tuesday’s market action and analyzed SLB, Halliburton, and ProFrac stocks.
Nike, FedEx earnings
Dow Jones giants Nike and FedEx reported earnings late Tuesday and also offered some reasoning about the holiday shopping season.
Nike’s earnings and sales topped Views, but inventories jumped 43% over the previous year. Margins fell due to write-downs. NKE stock is up 11% in pre-market trading, indicating a return above the 200-day line. Shares rose 0.2 percent to 103.21 on Tuesday.
FedEx earnings outpaced Views, but revenue fell. FDX stock rose 4% in extended trade. The shares closed down 2.6% at 164.35, below the 50-day line.
Dow jones futures today
Dow Jones futures rose 0.6% against fair value, with NKE stock supported. S&P 500 futures rose 0.4%. Nasdaq 100 futures rose 0.2%.
Crude oil futures rose 2%.
The 10-year Treasury yield rose 1 basis point, to 3.69%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock market rise
The stock market rally erased opening losses and closed slightly higher.
The Dow Jones Industrial Average rose 0.3% in stock market trading Tuesday. The S&P 500 rose 0.1%, with Tesla stock being the worst performer in the index. The Nasdaq Composite Index rose by 1 point. Russell 2000 Small Capital advanced 0.5%.
Apple stock fell to a low of 129.89, within 1% of its June bear market low of 129.04. Stocks rebounded, falling 7 cents to 132.30. Amazon stock rose 0.3% after briefly trimming Monday’s low.
US crude oil prices rose 1.2% to $76.09 a barrel. Natural gas prices fell 9% after falling more than 11% on Monday.
The 10-year Treasury yield rose 10 basis points to 3.68%, after jumping 10 basis points on Monday. The Bank of Japan on Tuesday turned slightly hawkish, allowing Japan’s 10-year yield to rise to 0.5%.
The two-year yield, most closely related to Fed policy, was essentially flat at 4.27%.
On Friday, investors will receive the personal consumption expenditures inflation report for November, with economists expecting another notable drop in headline and core inflation.
Exchange Traded Funds
Among ETFs, the iShares Expanded Tech-Software ETF (IGV) was up 0.5%. The VanEck Vectors Semiconductor Index (SMH) fell 0.6%.
Mirroring speculative stock stories, the ARK Innovation ETF (ARKK) fell 0.2%, hitting a five-year low. The ARK Genomics ETF (ARKG) rose 0.8%. Tesla is a major holding via Ark Invest ETFs.
The SPDR S&P Metals & Mining ETF (XME) was up 2.6% while the US ETF Global X Infrastructure Development (PAVE) was up 0.4%. US Global Gates Corporation (JETS) advanced 0.4%. The SPDR S&P Homebuilders ETF (XHB) lost 0.55%. The Energy Select SPDR ETF (XLE) rebounded 1.5% and the Financial Select SPDR ETF (XLF) rose 0.4%. The Healthcare Sector SPDR Fund (XLV) closed partially lower.
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Stocks near buy points
Oil service companies are rebounding, even as crude prices are near a one-year low, perhaps in anticipation of higher prices in 2023. Exxon Mobil (XOM) f chevron (CVX) recently released its capital spending plans for the coming year, indicating strong demand for service companies such as Halliburton, Schlumberger, ProFrac, and more.
SLB rose 3.9% to 51.76, moving back above the 50-day and 21-day moving averages and it can be said to have broken a narrow downward sloping trend line, making early entry possible. Schlumberger stock has returned to buy territory from a deep cup bottom still in effect. SLB stock is set to have a new base of 56.14 buy points after this week.
Fellow oil services giant Halliburton rebounded above the 21-day line, up 3.8% to 37.42, and is still close to the 50-day line. HAL stock has 40.09 a buy from a deep cup base of 47%, according to MarketSmith analysis. It has no clear early entry. The handle will be long enough to be its own base after this week.
ProFrac stock jumped 6.9% to 23.23, back above the 50-day and 21-day lines and breaking out of the recent downtrend, like SLB stock. It can serve as an early entry. ACDC should have a new consolidation with 27.10 buy points after this week. ProFrac’s IPO is at 18 shares. He’s had three bases since then, with the hacks not working for quite a while.
Tesla stock fell 8.1% to 137.80, hitting a two-year low. Shares of the electric car giant are down 67% from their November 2021 peak and 29% in December alone.
Tesla stock has now edged its lead since the August 2020 stock split 5-to-1. (TSLA stock split 3-to-1 in August 2022 as well.)
Tesla China sales slowed for the second week in a row, according to weekly registration data. This is despite ever-increasing year-end incentives, which are set to expire on January 1 along with China’s subsidies for electric vehicles.
Elon Musk’s Twitter saga raises fears of major damage to the Tesla brand. Several prominent long-term TSLA bulls are increasingly critical of Musk.
Evercore and Daiwa Capital Markets on Tuesday cut price targets for TSLA shares, citing Twitter. Oppenheimer downgraded Tesla on Monday.
Tesla stock failed to rally on Monday despite Elon Musk saying he would step down as CEO of Twitter after polling Twitter users on the issue.
Stocks continued to fall on Tuesday even as major indices and many blue chips tried to take a stand. The massive sell-off of the past several weeks indicates that large institutions are unloading or reducing holdings of TSLA stock.
Late Tuesday, Musk said he would step down as head of Twitter once he finds a successor and that he would run the software and servers teams.
Electric is reporting, citing sources, that Tesla is implementing a hiring freeze and a new wave of layoffs will begin in early 2023.
Tesla stock rose slightly early Wednesday.
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Market rally analysis
After a sharp sell-off from the December 13 highs, the stock market rally ended its losing streak, just barely.
Major indices were looking oversold and arguably “due” for a bounce. They did get one, though it wasn’t much.
The Dow Jones found support at the 50-day line, but the other major indicators did not make any significant technical moves.
The stock market rally is still under pressure.
AAPL stock has rebounded from market lows, but that doesn’t mean it will continue to do so.
Many blue chips found support at key levels. But whether they hold up and come back strong depends largely on the market as a whole.
Energy names could be a partial exception, given how they trade on underlying crude oil or natural gas prices. Oil service companies like SLP, equity and coal producers like Consolidated Energy, they’re doing better now.
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What are you doing now
This is not the time to buy stocks. While the major indices have held their ground and some major stocks have not collapsed, the market rally remains weak.
The S&P 500’s recovery of the 50-day line would seem to be a minimal sign of strength, with testing of the 200-day and December peaks much larger.
Even if the market rebounds, Tesla’s continued crash on Tuesday shows that not all stocks will follow.
If you feel compelled to play this market, take test trades and be ready to take quick profits and cut losses.
Keep looking for stocks that are holding and find support at key levels. Stocks with strong relative strength during weak markets can be leaders in the next advance.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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