Dow Jones futures turned slightly lower Wednesday night, along with S&P 500 futures and Nasdaq futures, as PayPal (PYPL), eBay (EBAY) and Apple (AAPL) chipmakers Qualcomm (QCOM) and Qorvo (QRVO) headlined earnings late Wednesday, while Apple Car buzz lifted the megacap.
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The stock market rally held onto strong gains from Monday and Tuesday. President Joe Biden signaled some willingness to compromise on the size of his stimulus bill and how many Americans would receive direct checks. Growth stocks didn’t fare well, but there were several new breakouts, including Pinduoduo (PDD), ZoomInfo Technologies (ZI), Dynatrace (DT) and Farfetch (FTCH).
Short-squeeze plays GME stock, AMC Entertainment (AMC), Express (EXPR) and Koss (KOSS) continued to trade heavily. GameStop (GME) rose 2.7% on Wednesday, AMC stock 15%, Express 5.3% and Koss 28%, but those were generally inside days after huge plunges Tuesday.
The Securities and Exchange Commission is probing social media and message boards for signs of fraud in the GME stock, AMC stock and other short-squeeze plays, Bloomberg reported.
GME stock fell 4% overnight.
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Key Overnight Movers
Apple stock, which fell last week after its results, rallied 2% overnight amid more reports that an Apple Car manufacturing deal is near with South Korea’s Hyundai-Kia. That would push AAPL stock close to reclaiming a 138.89 buy point.
Meanwhile, three big-cap techs were set to move past buy points, but only one was going the right way.
Apple iPhone and 5G chipmakers Qualcomm and Qorvo beat profit views. But Qualcomm missed on revenue while Qorvo narrowly beat. QCOM stock and Qorvo stock fell sharply, set to knife below buy points.
EBay earnings beat views while the outlook was upbeat. EBay stock spiked overnight, signaling a breakout.
PayPal earnings beat while guidance was in line. PYPL stock is set to hit a record high.
KLA earnings and guidance were strong. KLAC stock was little changed after selling into quarterly results.
Pinduoduo stock, Farfetch, ZoomInfo, Apple and PayPal are IBD Leaderboard stocks. PayPal stock is on IBD Long-Term Leaders. PYPL and Dynatrace stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures dipped 0.2%. Nasdaq 100 futures were 0.1% below fair value, reversing from modest gains.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Biden Stimulus Compromise
President Biden told House Democrats that a stimulus deal must include direct checks of $1,400, saying Americans were promised that amount. But, he’s open to those checks going to a fewer number of Americans. He’s also willing to accept a stimulus deal that’s below his $1.9 trillion proposal.
But is the Biden stimulus compromise fig leaf aimed at Republicans or moderate Democrats?
Ten Senate Republicans met with President Biden on their $600 billion stimulus plan, which would include $1,000 checks with tighter income limits. Stimulus talks are still ongoing with centrist GOP members even as congressional Democrats push ahead on a go-it-alone strategy via a budget reconciliation bill. However, with razor-thin majorities in the House and Senate, the Biden stimulus bill might have to be reduced substantially to pass Congress.
Coronavirus News
Coronavirus cases worldwide cumulatively reached 104.90 million. Covid-19 deaths topped 2.27 million.
Coronavirus cases in the U.S. have hit 27.15 million, with deaths above 461,000.
Stock Market Rally
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30722.61 | +35.13 | +0.11 |
| S&P 500 | (0S&P5) | 3830.08 | +3.77 | +0.10 |
| Nasdaq | (0NDQC ) | 13610.54 | -2.24 | -0.02 |
| Russell 2000 | (IWM) | 214.23 | +0.62 | +0.29 |
| IBD 50 | (FFTY) | 44.98 | -0.24 | -0.53 |
Last Update: 4:10 PM ET 2/3/2021 |
||||
The stock market rally had a quiet session, following two big gains and last week’s sell-off.
The Dow Jones Industrial Average edged up 0.1% in Wednesday’s stock market trading. The S&P 500 index rose 0.1%. The Nasdaq composite faded to close just below break-even, despite a strong boost from Alphabet‘s (GOOGL) Google.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) lost 0.5%, weighed down by some chip names, while the Innovator IBD Breakout Opportunities ETF (BOUT) edged up 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 0.5%. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.9%, with Qualcomm and Qorvo stock among the drags. Not surprisingly, SMH traded lower overnight as Qorvo and QCOM stock tanked.
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Breakouts
Pinduoduo stock jumped 6.1% to 193.11, retaking a 187.80 ascending base buy point. The 5% chase zone runs to 197.19. The relative strength line for PDD stock hit a record high, a bullish sign. The RS line tracks a stock’s performance vs. the S&P 500 index.
ZoomInfo stock popped 6.8% to 54.58, clearing a cup base with a 53.18 buy point, according to MarketSmith chart analysis. ZI stock, which came public last June, hit an all-time closing high. ZoomInfo’s RS line is just below a high.
Dynatrace stock surged 14% to 50.12, jumping to top a 48.95 buy point, with a 48.30 entry. The catalyst was strong Dynatrace earnings and guidance early Wednesday. DT stock briefly broke out in late January, but failed after a few days. Dynatrace was Wednesday’s IBD Stock Of The Day.
Farfetch stock popped 6.5% to 67, above a 65.64 buy point from a short consolidation. FTCH stock rebounded from its 10-week line this week, offering an early entry.
PayPal Earnings
PayPal earnings rose 29% to $1.08, with revenue up 23% to $6.12 billion. Analysts expected PayPal earnings of $1 a share on revenue of $6.09 billion.
The digital payments leader also gave in-line 2021 revenue guidance.
PayPal stock jumped 6% overnight, signaling a record high. Shares rose 1.1% to 251.90 on Wednesday, continuing a rebound from the 10-week line.
Qualcomm Earnings
Qualcomm earnings jumped 119% to $2.17 a share, as sales shot up 63% to $8.23 billion. Analysts forecast Qualcomm earnings of $2.10 a share on $8.27 billion in revenue.
Qualcomm stock tumbled 7% in overnight trading. Shares fell 1.5% to 162.30 on Wednesday. QCOM stock looks set to plunge below a 161.17 flat-base buy point after reclaiming that entry last week. It’s also likely to undercut its 50-day line.
Qorvo Earnings
Qorvo earnings leapt 66% to $3.08 a share, with revenue up 27% to $1.09 billion. Analysts expected Qorvo earnings of $2.68 on revenue of $1.07 billion.
The iPhone and 5G chipmaker also guided higher. But along with the narrow sales beat — and perhaps Qualcomm’s sales miss — that apparently wasn’t enough to satisfy investors.
Qorvo stock sank 7% in extended trade. Shares fell 1.9% to 175.95 on Wednesday. Like fellow Apple chipmaker Qualcomm, QRVO stock is set to plunge below a 171 buy point after reclaiming that entry earlier this week. The 50-day line also looks in jeopardy.
KLA Earnings
KLA earnings rose 22% to $3.24 a share as sales grew 9% to $1.65 billion. Analysts expected KLA earnings of $3.19 a share on sales of $1.6 billion.
The chip-equipment maker also guided higher.
KLA stock was little changed overnight. Shares fell 4.2% on Wednesday to 286.30, down below its 21-day line.
EBay Earnings
EBay earnings rose 6% to 86 cents as revenue popped 28% to $2.9 billion. Analysts expected eBay earnings of 83 cents on $2.71 billion in revenue.
The e-commerce giant also guided up on Q1.
Shares of eBay leapt 11% in extended trade. It rose 1.2% to 58.04 on Wednesday. EBay stock is set to surge past a 59.16 buy point from an uneven double-bottom base. EBay stock also should clear a handle entry of 60.65.
Stock Market Rally Analysis
After last week’s pullback and the Monday-Tuesday rebound, Wednesday’s quiet day for the major indexes was constructive. Though growth stocks didn’t have a great day, especially chips, there were some breakouts. The Nasdaq is 6.2% above its 50-day line, down slightly from Tuesday’s 6.5%. That’s still extended, but not egregiously so.
Investors don’t need to be defensive, but be careful about adding a lot of net exposure.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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