Dow Jones futures edged lower Wednesday night, along with S&P 500 futures and Nasdaq futures. The stock market rally held near recent highs while small caps reclaimed a key level. Salesforce stock and Snowflake (SNOW) were among the notable earnings reports overnight.
XThe major indexes rose slightly but the S&P 500 and Nasdaq hit fresh all-time highs while the Dow Jones nudged closer to record levels. The small-cap Russell 2000 reclaimed its 50-day moving average for the first time on July 12. Infrastructure plays, financials, housing, chips and cybersecurity were solid performers.
The stock market rally is acting well with Fed chief Jerome Powell due to give a big speech. Powell speaks at the (this year) virtual Jackson Hole monetary conference at 10 a.m. ET on Friday. He could drop hints about the Fed scaling back asset purchases, but many analysts expect him to leave most or all of that "taper talk" for the September Fed meeting.
Salesforce.com (CRM), Snowflake, Autodesk (ADSK), Box (BOX), NetApp (NTAP), Zuora (ZUO) and Williams-Sonoma (WSM) reported earnings late Wednesday.
CRM stock rose modestly late after closing in a buy zone. SNOW stock jumped. ADSK stock and Box retreated after closing around buy points. NTAP stock is signaling a breakout. WSM stock and Zuora surged higher, also flirting with buy points.
Early Thursday, Chinese EV maker Xpeng Motors (XPEV) reports, along with Burlington Stores (BURL), Dollar Tree (DLTR), Dollar General (DG) and Abercrombie & Fitch (ANF). XPEV stock and Abercrombie & Fitch are close to possible early entries. BURL stock and Dollar General are in buy zones. Dollar Tree is starting to bounce back.
Late Wednesday, Microsoft (MSFT) and Google parent Alphabet (GOOGL) pledged to spend several billion dollars on cybersecurity, as many other corporate giants committed to major initiatives. That followed a White House cybersecurity summit with President Joe Biden in the wake of several high-profile ransomware attacks this year. Cybersecurity software stocks, already up solidly this week on Palo Alto (PANW) earnings and more, rose slightly overnight.
The video embedded in this article analyzes Quanta Services (PWR), Wells Fargo (WFC) and the Global X U.S. Infrastructure Development ETF (PAVE).
Dow Jones Futures Today
Dow Jones futures were just below fair value. CRM stock is a Dow Jones component. S&P 500 futures dipped 0.1% and Nasdaq 100 futures fell 0.1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Stock Market Rally
The stock market rally had slim gains on the major indexes, extending a winning streak to five days on the S&P 500 and Nasdaq.
The Dow Jones Industrial Average edged up 0.1% in Wednesday's stock market trading. The S&P 500 index rose 0.2%. The Nasdaq composite climbed 0.15%. The small-cap Russell 2000 rose 0.4%.
The 10-year Treasury yield popped 5 basis points to 1.34%, reclaiming its 200-day and 50-day lines. The 10-year Treasury yield, like the stock market rally, has been making gains in recent days heading into Friday's Powell speech.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.7%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.6%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.2%, with CRM stock and Autodesk top holdings. The VanEck Vectors Semiconductor ETF (SMH) climbed 1.1%.
SPDR S&P Metals & Mining ETF (XME) retreated 0.8% but the PAVE ETF gained 0.6%. U.S. Global Jets ETF (JETS) advanced 0.85%. SPDR S&P Homebuilders ETF (XHB) rose 1.2%. The Energy Select SPDR ETF (XLE) climbed 0.8% and the Financial Select SPDR ETF (XLF) 1.2%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) closed just below break-even. ARK Genomics ETF (ARKG) edged up 0.1%.
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Salesforce Earnings
Salesforce earnings were better than expected. The business software giant also hiked guidance after closing its Slack acquisition.
CRM stock rose 2% to about 266 in extended trade. Salesforce stock edged up 0.5% to 260.85 on Wednesday. Shares are in buy range from a 253.60 saucer-with-handle entry. The buy zone runs to 266.28. Investors also could use 271.02 as an alternate buy point for CRM stock
Snowflake Earnings
Snowflake lost slightly less than expected as revenue more than doubled once again. Management was upbeat on guidance.
SNOW stock popped 4% overnight after initially moving between modest gains and losses. Shares advanced 0.85% to 283.76 on Wednesday. Snowflake stock has rallied from a record low of 184.71 on May 13, but doesn't currently have a reasonable entry.
Autodesk Earnings
Autodesk earnings topped views while sales were in line. Guidance was roughly in line.
ADSK stock slumped 7% in extended action. Shares nudged up 0.35% to 342.27 on Wednesday. Autodesk stock closed slightly extended from a 321.23 buy point, according to MarketSmith analysis. But it's in danger of falling below the buy point.
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Box Earnings
Box earnings narrowly topped views. Guidance was in line to slightly above views.
Box stock fell 3% in overnight trade. Shares dipped 0.9% on Wednesday to 25.64. Box stock has a cup-with-handle base with a 26.58 buy point.
NetApp Earnings
NetApp earnings comfortably beat. The data storage giant guided slightly higher on current-quarter EPS.
NetApp stock climbed 3% to 85 in late trade. Shares rose 1.8% on Wednesday to 82.27. NTAP stock has a handle buy point of 83.60 on a double-bottom base.
Williams-Sonoma Earnings
Williams-Sonoma earnings easily beat views and the company guided higher. The upscale housewares and furniture retailer also hiked its dividend 20% and announced a $1.25 billion buyback.
WSM stock vaulted 13% to 193 overnight, briefly topping a 194.79 buy point. Shares rose 0.7% to 170.74 on Wednesday, closing near session lows. But that followed Tuesday's 4.6% gain for Williams-Sonoma stock.
Zuora Earnings
Zuora reported a slim loss that was in line with views, while revenue topped forecasts.
ZUO stock leapt 14% in extended trade to 18.61. Shares dipped 0.1% on Wednesday to 16.35. ZUO stock has a double-bottom buy point of 18.12, but could have a slightly lower trend-line entry.
Market Rally Analysis
The stock market rally had another positive session, with the S&P 500 and Nasdaq at record highs and the Russell 2000 back above its 50-day line.
While Apple (AAPL) and some tech titans retreated or held steady Wednesday, many growth names continued to advance. With leading stocks from several other sectors making gains while small caps mount a comeback, the depth and breadth of the market rally has improved significantly from Thursday's lows.
It wouldn't be surprising for the major indexes to have a down session ahead of or in the wake of Fed chief Powell's speech Friday morning, even if he ends saying nothing unexpected.
The latest bulls vs. bears reading of newsletter writers showed bulls fell to 50%, while 18.5% are bearish. That's the lowest bull reading since late May. That certainly indicates the market rally could rise quite a bit on growing enthusiasm before bullish sentiment gets excessive.
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What To Do Now
The market rally continues to offer new buys while rewarding investors holding a wide variety of stocks and sectors.
Use your watchlists to spot early entries and make buys as close as possible to buy points.
If you own a highflying IPO or other leading stock that's surged in the past week or two, congratulations. Now what? In this choppy market rally, there's a heightened chance of some sort of pullback. Do you hold for really big gains, take partial profits or cash out? That can depend on your investing style, the size of your position, the character of the stock and your conviction in that holding. There's not a "right" or "wrong" answer. It's why selling winning stocks is as much an art as a science.
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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