Dow Jones Futures: Micron Says Revenue Growth ‘Close’; LULU Share jump on income, guidance

Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures. Micron technology (MU) and Lululemon Athletica (LULU) total overnight earnings.

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The attempt at a stock market rally had small losses on Tuesday, but the major indices held key levels. Megacaps such as apple (AAPL), Meta platforms (META), Microsoft (MSFT), Tesla (TSLA) and Google parent Alphabet ( GOOGL ) retreated on Tuesday, but looks generally healthy. Chip stocks fell, but came off lows.

Financial regulators testified Tuesday about the failures at Silicon Valley Bank and Signature Bank. Lawmakers criticized banks, regulators and each other, suggesting they won’t push new measures to support banks right now, such as broader deposit insurance.

First Republic Bank (FRC), among the most exposed regional banks, fell 2.3 percent. But FRC shares recovered well from lows during the day near the end. First Republic is no longer for sale, Fox Business reporter Charles Gasparino tweeted Tuesday afternoon, citing sources. It may be a sign of strength that the First Republic no longer needs a rescue. FRC shares fell nearly 12% on Monday, but are down 89% for the month.

Micron revenue

MU shares rose 1% overnight. The memory chip giant reported a bigger-than-expected loss and a 53% drop in revenue that also missed impressions. Micron took an inventory write-down of more than $1.4 billion and gave weak Q3 guidance. But CEO Sanjay Mehrotra said in the earnings report that “customer inventories have reduced in several end markets and we see a gradually better balance between supply and demand in the months ahead.” He added that the chipmaker is “close to a transition to sequential revenue growth.”

Chip investors have bet on a recovery when it is not yet clear that it is on the horizon. Micron tends to see the industry cycle turn early.

Micron stock closed down 0.85% at 59.28, but bounced back to hold its 50-day line. The MU share has a buy point of 64.44 from a bottom base. But investors can use 61.88 as an early entry from a possible handle.

Lululemon revenue

Lululemon’s revenue rose nearly 31% while revenue rose 30% to $2.8 billion. Both accelerated slightly from Q3. LULU shares were up 13% in late trading. The shares had closed up 1% at 320.32. Lululemon stock has recently reclaimed its 50-day and 200-day lines.

Progress software (PRGS) and egg producer Cal-Maine (CALM) also reported.

Cal-Maine climbed 2.5% on a 717% profit increase. PRGS stock fell nearly 5% on weak guidance.

The META stock is on the IBD Leaderboard and SwingTrader. Microsoft and Google shares are long-term IBD leaders.

The video embedded in the article discusses Tuesday’s market action and analyzes Microsoft stock, Shift4 Payments (FOUR) and Skyline Champion (HEAVEN).

Dow Jones Futures today

Dow Jones futures rose 0.3% relative to fair value. S&P 500 futures rose 0.4 percent. Nasdaq 100 futures rose 0.5 percent.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Attempt at a stock market rally

The attempted stock market rally fell slightly on Tuesday, with the major indexes paring losses in the mid-afternoon.

The Dow Jones Industrial Average closed down 0.1% in Tuesday’s trading. The S&P 500 index fell 0.2 percent. The Nasdaq composite fell 0.45 percent. The small-cap Russell 2000 fell less than 0.1%.

The US crude oil price rose 0.5 percent to $73.20 a barrel.

The 10-year government yield rose 4 basis points to 3.57%. The two-year government yield jumped 10 basis points to 4.06%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) lost 1.1%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) fell 0.1%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell 0.4%, with MSFT stock as a core holding. VanEck Vectors Semiconductor ETF ( SMH ) fell 0.7% but was well off intraday lows. The MU share is a large SMH holding.

Reflecting stocks with more speculative stories, the ARK Innovation ETF ( ARKK ) fell 1.5% and the ARK Genomics ETF ( ARKG ) fell 2.2%. TSLA stock is a large holding across Ark Invest’s ETFs.

The SPDR S&P Metals & Mining ETF ( XME ) rose 1.1% and the Global X US Infrastructure Development ETF ( PAVE ) rose 0.75%. US Global Jets (JETS) rose 0.9%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.6%. The Energy Select SPDR ETF (XLE) lost a fraction, and the Health Care Select Sector SPDR Fund (XLV) fell 0.6%

The Financial Select SPDR ETF (XLF) was just below break-even. The SPDR S&P Regional Banking ETF (KRE) fell 0.1 percent. FRC bearings are one of many KRE components.

Top five Chinese stocks to watch now

Megacap stocks

Apple shares and Microsoft both fell 0.4%, after the Dow tech giants fell more than 1% on Monday. Apple is just above a buy point while MSFT stock remains below the entry. Both stocks’ retreats have come in light volume.

Google shares fell 1.4% to 101.03 after falling 2.8% on Monday. Shares have fallen below the 200-day line. However, GOOGL stock now has a real handle. The purchase point for cup with handle is 106.69.

META shares fell 1.1% to 200.68 but are still holding above a buy point at 197.26, according to MarketSmith analysis.

Tesla shares fell 1.4% to 189.19% after paring Monday’s gain to 0.7%. Shares are holding the 50-day but below the 21-day and 10-week lines. TSLA stock is close to forging a bottom base with a potential buy point at 217.75.

Market rally analysis

The stock market rally attempt lost ground, but the overall picture did not change much. The Nasdaq is holding above its 21-day and 50-day moving averages.

The S&P 500 is still between 50 days and 200 days. The Dow Jones once again hit 21-day resistance, but held its 200-day line. It was also an indoor day after a relatively quiet Monday.

Megacap stocks such as Apple and Google are pulling back this week after propping up major indexes for much of March.

Chip stocks were notable losers. Nvidia (NVDA), which is strongly extended, had only a small decline, but many semiconductors trading around buy points lost 2%-4%.

The market width was so-so. Winners topped losers on the NYSE while trailing on the Nasdaq. In total, the winners just surpassed the departures.

The market rally attempt has still not had a follow-up day to confirm the uptrend.

Homebuilders look strong, along with some building materials and home-related retailers. Some software names work well, including MSFT stocks, but also several cybersecurity plays, among others. But market leadership is narrow.

Time the market with IBD’s ETF market strategy

What to do now

A market rally attempt is still ongoing, but has not made much progress. The stock market has shown choppy action for several weeks. Certain areas have done well, but the width has been poor.

If you get into the right stocks, there have been opportunities to make money. But many buying opportunities have failed. Some stocks make strong moves and then fall back. So the key is to stay nimble, take advantage of early entries and take profits quickly.

But the overall exposure should be light. And there is nothing wrong with being mostly or completely on the sidelines. Cash can be king, especially if it pays 4%.

Build your watchlists. Look for stocks near buy points, but also names that simply show relative strength.

Read The Big Picture every day to stay in sync with market direction and leading stocks and sectors.

Follow Ed Carson on Twitter at @IBD_ECarson for stock exchange updates and more.

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