Dow Jones futures rose slightly Wednesday evening, along with S&P 500 futures and Nasdaq futures, as the earnings parade marches on. Qualcomm (QCOM), Qorvo (QRVO), PayPal (PYPL), Sprouts Farmers Market (SFM) and O’Reilly Automotive (ORLY) are signaling buying opportunities overnight after reporting late.
The coronavirus stock market rally had a strong Wednesday, as the major indexes jogged while leaders ran. Stocks rallied on earnings reports and Fed chief Jerome Powell hinting at new asset purchases. Investors took in stride an antitrust hearing featuring the CEOs of Apple (AAPL), Amazon.com (AMZN), Facebook (FB) and Google parent Alphabet (GOOGL).
Apple stock, Amazon stock, Facebook stock and Google stock all rose more than 1% Wednesday. The stock market spotlight will continue on these tech titans with all four reporting earnings late Thursday.
In extended trade PayPal stock rose on strong earnings after clearing a short consolidation Wednesday. Aggressive investors could buy PYPL stock now. Qorvo stock gapped higher on earnings, signaling a move beyond a buy point. Fellow chipmaker Qualcomm, whose stock closed just in buy range, is set to spike higher on strong earnings and a licensing deal with Huawei. Sprouts stock and O’Reilly Auto stock, which also closed just above proper buy points, are set to pop on blowout earnings.
PayPal stock, Apple stock and Amazon stock are on IBD Leaderboard. PYPL stock is on the IBD Long-Term Leaders list. GOOGL stock is on the Long-Term Leaders watchlist. PYPL stock, Sprouts stock and Facebook stock are on the IBD 50 list.
Dow Jones Futures Today
Dow Jones futures were just above fair value. S&P 500 futures advanced 0.1%. Nasdaq 100 futures rose 0.3%, with PayPal, Qualcomm and other earnings winners lifting tech futures.
Coronavirus cases worldwide have reached 17.13 million. Covid-19 deaths have topped 668,000.
Coronavirus cases in the U.S. have climbed to 4.55 million, with deaths above 153,000.
IBD Covid Heat Map data show Covid-19 cases are now falling in many Sunbelt hot spots, but infections are rising in many other states.
Coronavirus Stock Market Rally
The coronavirus stock market rally had a strong session, building momentum in contrast to Tuesday’s afternoon sell-off.
The major indexes opened higher on strong earnings, then added to gains as Fed chief Jerome Powell raised hopes that the central bank would announce new asset purchases at the next policy meeting in September. The lack of bombshells at the Big Tech antitrust hearing also may have helped.
The Dow Jones Industrial Average climbed 0.6% in Wednesday’s stock market trading. The S&P 500 index rallied 1.2%. The Nasdaq composite added 1.35%, but is still firmly in the middle of its recent trading range.
Meanwhile, leading stocks had a strong day, with many surging on positive earnings.
Shopify (SHOP), Monolithic Power (MPWR), AMD (AMD) and Wingstop (WING) were among the big earnings winners, but many leaders delivered strong or solid gains without earnings, including Chipotle (CMG) and DocuSign (DOCU).
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.6%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 1.95%. The VanEck Vectors Semiconductor ETF (SMH) leapt 2.5%, hitting a fresh high. QCOM stock is a top 10 holding.
Apple, Amazon, Facebook, Google Earnings
The CEOs of Apple, Amazon, Facebook and Google appeared to emerge from Wednesday’s antitrust hearing largely unscathed, though questions continued into the evening. But antitrust concerns will loom over Big Tech for the foreseeable future. The Justice Department and FTC are probing Big Tech companies. Many Democrats want major restrictions on internet giants. Europe has been happy to levy fines and impose sanctions on U.S. tech giants.
Right now investors are going to be looking at Thursday’s earnings reports and guidance from Apple and the FANG trio. Those four stocks boast a combined market cap of nearly $5 trillion, with Apple stock and Amazon stock both over $1.5 trillion. So their post-earnings reaction will be key for Friday’s stock market trend.
Apple stock found support above its 10-week moving average, while AMZN stock and GOOGL stock pulled back to their 21-day lines. FB stock is hitting resistance just below its 50-day and 10-week lines. All have been consolidating for a couple of weeks. Can they form new bases? That’ll depend on their reaction to earnings as well as the overall course of the coronavirus stock market rally.
Stock Market Rally Has Great Day
Wednesday’s stock market rally action was about perfect, especially given the barrage of headlines. The coronavirus market rally can’t continue at its April-June pace, but a slower pace could be sustainable. A modest overall uptrend would be a great environment for leading stocks, which could run higher with less risk of the market overheating and reversing sharply.
But, the stock market rally is going to do what it’s going to do. And even if the market acts well, individual stocks will have their own paths. While it’s easy to cheer the winners, some stocks are big earnings losers. So decide ahead of earnings what you are going to do with various holdings.
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.
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