Dow Jones Futures rise when Microsoft dives after Nasdaq falls, Tesla dives

Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures fell slightly, all reversing losses on Tuesday night as Microsoft shares and Google parent Alphabet (GOOGL) moved on revenue.


The stock market fell on Tuesday, with the Nasdaq breaking below its lowest levels in March Tesla (TSLA) plunged in response to CEO Elon Musk Twitter (TWTR) agreement.

Plus Microsoft (MSFT) and Google shares, General motors (GM), Edwards Lifesciences (YUCK), Visa (V) and Juniper Networks (JNPR) was among the many notable companies that reported late Tuesday. early Wednesday, General dynamics (DG) and Boeing (BA) is in print.

The Tesla stock and Microsoft are on the IBD Leaderboard. MSFT stock and Google are on the list of long-term leaders in IBD.

The video embedded in this article discusses Tuesday’s market sales and analyzes the Tesla stock, Waste management (WM) and Cheniere energy (LNG), another Leaderboard action.

Dow Jones Futures today

Dow Jones futures rose 0.5% relative to fair value. S&P 500 futures rose 0.3 percent. Nasdaq 100 futures rose 0.1 percent. Futures improved from their lowest level on Tuesday night as Microsoft shares rose and Google reduced its losses overnight. Microsoft is a Dow Jones, S&P 500 and Nasdaq giant. Visa is a Dow and S&P 500 component while Google stock is on the S&P 500 and Nasdaq.

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

Key income

Microsoft’s earnings topped third-quarter results due to strong cloud-related growth. Microsoft shares initially fell, but then rose 4.5% as the technological titan led to strong cloud growth. Shares fell 3.7% on Tuesday to 270.22, which matches the lowest March on 270 intraday.

Google revenue fell short while revenue was just a hair’s breadth below estimates. The Internet giant announced a $ 70 billion share buyback in Google. Google stock fell more than 2% overnight, even though it was outside the worst levels. Google fell 3.6% to 2,373 on Tuesday, at its 10-month low.

Edwards Lifesciences revenues were just above the impressions, while the manufacturer of medical products confirmed the guidance. The EW share slipped 5% in expanded trading. Shares fell around 3% to 116.27 on Tuesday. Edwards shares erupted last week, but fell back below a buy point on Friday.

GM revenues fell, but topped the list, while revenues came to light. GM stock rose modestly after hours. Shares fell 4.5% on Tuesday to 38.04, the lowest close since the end of 2020.

Visa earnings comfortably beat consensus Visa shares rose 5% in overnight action. The stock retreated 4.2% on Tuesday to 201.10, losing sight of the 50-day and 200-day lines.

Juniper revenues just missed, while revenues just exceeded targets. JNPR shares fell sharply in extended action. The stock fell almost 3% on Tuesday to 33.60, and fell back from the 50-day line. The Juniper stock had held up better than most technology stocks.

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

Stock exchange Tuesday

A one-day stock market rally quickly fell apart as the major indices sold out sharply. The Dow Jones Industrial Average fell 2.4% in Tuesday’s trading session. The S&P 500 index retreated 2.8%, with the Tesla stock and General Electric (GE) the biggest losers. The Nasdaq composite crumbled almost 4%. Small-cap Russell 2000 fell 3.15%.

The US crude oil price rose 3.2 percent to $ 101.70 a barrel.

The 10-year government interest rate fell 5 basis points to 2.77%.

Among the best ETFs, Innovator IBD 50 ETF (FFTY) rose 2.9%, while Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.7%. iShares Expanded Tech-Software Sector ETF (IGV) retreated 3.7%, with Microsoft shares as a major IGV item. VanEck Vectors Semiconductor ETF (SMH) slipped 4.3%.

ARK Innovation ETF (ARKK) reflected more speculative history stocks, falling 6.75% and ARK Genomics ETF (ARKG) 6%. Both reached their lowest levels since April 2020. The relative strengths of ARKK and ARKG are at their lowest point in almost five years, which means that investors would have been better off holding the S&P 500. The Tesla stock is the No. 1 holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) lost 1.75% and Global X US Infrastructure Development ETF (PAVE) fell 2.2%. US Global Jets ETF (JETS) fell 4.2%. SPDR S&P Homebuilders ETF (XHB) fell 2.3%. Energy Select SPDR ETF (XLE) rose 0.1% and Financial Select SPDR ETF (XLF) fell 2.5%. Health Care Select Sector SPDR Fund (XLV) declined 1.8%

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Tesla shares

Shares of Tesla plunged 12.2% on Tuesday to 876.42, falling below the 50-day moving average and even the 200-day high.

Investors seem worried that CEO Elon Musk will sell a significant portion of his TSLA shareholding to pay for his Twitter deal. Musk is financing the $ 44 billion Twitter takeover with $ 12.5 billion backed by some of his TSLA shares, as well as an additional $ 21 billion in funding that he is personally guaranteed, but which offers few details. Twitter shares fell 3.9% to 49.68 on Tuesday, creating a larger gap from the takeover price of $ 54.20.

The Tesla stock had traded around the 1000 mark for the past two weeks, which was encouraging. But in a market correction, stocks will sometimes hold for a few days or even a few weeks before suddenly breaking hard.

The Tesla stock still looks better than other EV and car stocks and all megacaps with the possible exception of apple (AAPL). But that does not say much.

The stock has not returned to mid-March levels, but has returned all or almost all gains since the TSLA stock slipped past its 200-day and 50-day lines.

Technically, the TSLA stock still has a buying point of 1,152.97 cups with handles, according to MarketSmith analysis. But the chart does not look right. It would be better if Tesla’s handle developed into a separate base.

The Ford F-150 Lightning manufacturing event on Tuesday signals further US competition for Tesla, which will not start making its Cybertruck until at least next year. In the meantime, Tesla will almost certainly lose its EV crown when it comes to vehicles sold in the second quarter to BYD (BYDDF), although the Chinese electric car and battery giant will do so via electric cars and hybrids combined.

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Market analysis

Nasdaq, the S&P 500 and finally the Dow Jones fell below Monday’s lowest levels by day, ending their one-day rally attempt. The Nasdaq fell its low point on March 14 to its worst level in 13 months. The others are approaching their lowest in 2022. The Dow Jones did not fall below Monday’s lowest level, so the attempt at a stock market rally is still pending.

The large indices are raging with extensive damage across the market and do not seem to be signaling a bottom yet.

The CBOE volatility index, linked to the S&P 500 index, jumped to its highest point since mid-March, but the VIX is still good compared to the February highs. However, the CBOE Nasdaq Market Volatility Index is nearing its peak in late February / early March.

As Microsoft shares fall and Google falls overnight, fears may begin to rise, especially with the large indices falling as Tesla and Apple move below their 200-day limits.

Energy stocks tried to bounce back Tuesday as crude oil prices returned to $ 100 a barrel. The fertilizer games will find important support ahead of earnings next week. Health insurance companies and pharmacies remain OK, although a number of drug stocks will report over the next few days. Defense stocks seem to find support not far from purchase points.

Waste Management flashed buy signals on its strong results, while Waste connections (WCN) hovers around a point of purchase.

But in most cases, even the strong groups have had a lower trend in the last couple of weeks.

Time market with IBD’s ETF market strategy

What to do now

The stock market is in a correction, and has not shown any real signs that the bleeding will stop soon. Investors should keep their exposure to a minimum or be completely cash-strapped.

Tuesday’s big sale after Monday’s return shows why investors should not jump on the first rise in a correction. This is a time to look for stocks that hold and have strong or rising RS lines. But as the sudden fall of the Tesla stock showed, resilient names and sectors can suddenly break down. This is a time to build watch lists, not make new purchases.

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

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


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