Stock futures sketched out tentative gains Thursday, ahead of a busy morning of economic news. Earnings fueled some dramatic premarket action, as railroad CSX, Crocs, OneMain Holdings and others rallied. Floor & Decor and Bill.com were in buy ranges. And a price target hike lifted Microsoft on the Dow Jones today, ahead of its earnings report on Tuesday.
Dow Jones futures eked out a 0.1% advance and S&P 500 futures also traded 0.1% above fair value, looking to extend the market’s bullish two-day bounce. Nasdaq 100 futures crept a fraction higher, while futures for the Russell 2000 small cap gauge edged up almost 0.2%.
Reactions to earnings were central to Thursday’s premarket action. Railroad CSX (CSX) led both the Nasdaq 100 and the S&P 500, rallying 3.8% on its Q2 results. Chipmaker Texas Instruments (TXN) traded at the bottom of both indexes, down 4.5% — despite a healthy second-quarter beat, and robust Q3 guidance.
Also on the Nasdaq, IBD 50 and Leaderboard stock ASML Holdings (ASML) gained 1.5%, aiming to extend its rebound from 10-week support to a third day.
Wednesday Stock of The Day Floor & Decor (FND) starts the day in a buy zone, above a cup-with-handle base buy point at 109.95. The same is true for IBD 50 Stock To Watch Bill.com (BILL), which is less than 5% above a cup-with-handle buy point at 192.99.
Weekly jobless claims and the Chicago Federal Reserve’s National Activity Index are due out at 8:30 a.m. ET. June existing home sales from the National Association of Realtors, and the Conference Board’s leading economic indicators, are set for release at 10 a.m. ET.
Dow Jones Today: Dow Earnings, Microsoft Target Hike
Specialty chemicals maker Dow (DOW) led the Dow Jones today, up 1% as its second-quarter revenue and earnings easily rolled past analyst targets. CEO Jim Fitterling projected “earnings momentum from additional improvements in consumer spending, international travel and industrial production,” and as the economic recovery broadens around the world.
Microsoft (MSFT) climbed 0.9%, as Citi raised the stock’s price target to 378, from 310, ahead of the company’s fiscal fourth-quarter report, due on Tuesday. The IBD Leaderboard listing is extended after clearing a cup base in June.
Earnings News: Crocs, OneMain, Chart Industries
In earnings news, Tri Pointe Homes (TPH) rallied 5.4% and Resources Connection (RGP) surged 6.3%. NetGear (NTGR), Texas Instruments (TXN) and D.R. Horton (DHI) were taking hard hits following their quarterly results.
Consumer lender OneMain Holdings (OMF) jumped more than 8% higher on a big earnings beat. The move set shares up for a possible breakaway gap buying opportunity, as the stock clears a brief consolidation. OneMain holds a best-possible Composite Rating of 99 from IBD.
Energy equipment manufacturer Chart Industries (GTLS) rose 1.7% after scoring a narrow second-quarter earnings beat and raising guidance. The stock finished Wednesday 6% below a 167.49 buy point in a 12-week cup base.
Global Stock Markets
Lights were green across worldwide markets Thursday. Hong Kong’s Hang Seng Index jumped 1.8%, snapping a three-day slide even as widespread floods killed at least 25 and displaced an estimated 1.2 million persons in central China. In Japan, markets are closed Thursday and Friday.
Stocks moved higher for a second day in Europe. Near midday, London’s FTSE 100 edged up 0.2%. The CAC-40 in Paris and Frankfurt’s DAX each traded 0.8% higher.
Vital Signs: Oil Prices, Bond Yields, Bitcoin
Oil prices continued to bounce Thursday morning, with U.S. benchmark West Texas Intermediate up 1.2% to $71.13 a barrel. That puts oil’s loss for the week right around 2%, up from a 9% decline, as prices resist adding a third week to their slide.
Prices dived Monday, after the Organization of Petroleum Exporting Countries and partners led by Russia, typically called OPEC+, agreed Sunday to a strategy to return production to pre-pandemic levels by 2022. Prices on July 6 reached $76.98, their highest level since October 2014.
Bonds eased, sending yields higher as they look to extend a two-day rebound. The 10-year yield rose to 1.31% early Thursday, after settling at 1.28% on Wednesday. Yields on Tuesday briefly fell to their lowest level since Feb. 2, then rose to retake support at their 200-day moving average on Wednesday.
Bitcoin traded almost 2% higher, above $31,850, after dipping to $29,327 on Tuesday. The cryptocurrency had traded above $36,000 in late June, and touched a record high near $65,000 in April. Bitcoin prices appeared to receive some uplift after Tesla CEO Elon Musk, Twitter (TWTR) CEO Jack Dorsey and ARK Invest’s Cathie Wood spoke about Bitcoin and cryptocurrencies at the Bitcoin event “The B Word.”
S&P 500, Nasdaq, Dow Jones Today
On Wednesday, the S&P 500 added a strong second day to its rebound from 50-day support. That left the index up 0.7% so far for the week, tracking toward its sixth straight monthly gain, up 16% year to date and less than 1% from its record high set July 14.
The Nasdaq Composite also has a two-day bounce under its belt, though its pullback stopped well short of a test of 50-day support. The index is now back above its 21-day line, up 1.4% for the week and a little more than 1% off its July 13 record.
For more detailed analysis of the current stock market and its status, study the Big Picture.
As for the Dow Jones today, the blue chip index has recovered support at its 50-day and 21-day moving averages. It has a 0.3% gain for the week, and it is also only about 1% off its record high. But the Dow set its record in mid-May, and the chart shows the index now in its 11th week of consolidation.
That consolidation occurred as bond yields fell in nine of the past 10 weeks. Or that White House efforts to push through an infrastructure spending plan stalled in the first week of June.
That placed financials and many materials-related stocks under pressure. But the two-day revival in leading stocks and small caps shows investors overcoming concerns over possible economic impact from rising coronavirus infections.
Wednesday Big Picture market commentary noted airlines, hotels, casinos, restaurants and travel booking industry groups climbed more than 3% during the session. And the yield on the 10-year Treasury note rose 8 basis points to 1.28% Wednesday afternoon. That showed capital exiting safe-havens at least briefly, amid the bond market’s two-month rally.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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