Dow Jones futures fell slightly late Wednesday, along with S&P 500 futures and Nasdaq futures. Dow Jones tech giant Cisco Systems (CSCO) reported better-than-expected earnings and guidance, while also hiking its dividend and buyback. Cisco stock rose in late trade, signaling a move above a buy point. HubSpot (HUBS) retreated after the top software stock announced plans for a share offering. Meanwhile, the current stock market rally is facing another test, as the Nasdaq composite hit resistance at the 200-day line Wednesday.
Dow Jones Futures Today
Dow Jones futures fell a fraction vs. fair value. S&P 500 futures and Nasdaq 100 futures also edged lower. Cisco stock is a member of the Dow, S&P 500 and Nasdaq. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Current Stock Market Rally
The current stock market rally has run up powerfully since Christmas. On Tuesday, the major averages peeked out above a mini-consolidation as the S&P 500 index topped its 200-day line. On Wednesday, the Nasdaq got to that line but backed off, closing up less than 0.1%. The S&P 500 index advanced 0.3% and the Dow Jones 0.5%.
Meanwhile, two days of high-level China trade talks begin in Beijing on Thursday. Chinese President Xi Jinping is set to meet with U.S. representatives on Friday.
Growth stocks, which outperformed for several days, had an unremarkable session Wednesday. When the stock market is moving sideways or pulling back, top stocks likely won’t progress and could pull back. Keep that in mind as you manage your individual holdings and overall portfolio.
It’s Valentine’s Day on Thursday, but when it comes to the stock market, invest with your head, not your heart.
Cisco earnings rose 16% to 73 cents a share in fiscal Q2, while revenue grew 4% to $12.45 billion. That ended two quarters of accelerating Cisco earnings growth and four quarters of decelerating sales growth. But analysts had expected Cisco earnings of 72 cents on sales of $12.41 billion.
Cisco sees Q3 EPS of 76-78 cents, with sales up 4%-6%. That’s largely above the consensus for Cisco earnings of 76 cents and a 3% revenue gain.
The networking giant, which is expanding into services and software, hiked its dividend to 35 cents a share. Cisco also added $15 billion to its share buyback program, for a total current authorization of $24 billion.
Cisco stock rose 3.9% to 49.36 in late trade. That signals a move to just above a 49.24 buy point from a double-bottom base. The relative strength line, which tracks a stock’s performance vs. the S&P 500 index, hit a high on Dec. 13 but since then has pulled back slightly.
HubSpot Stock Offering
HubSpot stock fell 2.5% to 167.57 in late trading. The software company plans to sell 1.7 million shares. That comes after HubSpot was one of five top-rated software stocks reporting earnings late Tuesday. HubSpot earnings and sales crushed views, while Q1 guidance was in line. On Wednesday, shares rose as high as 180 and fell as low as 167.72, closing down 0.1% at 171.87.
HubSpot stock is extended from a 158.76 handle buy point.
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