Dow Jones Futures: Tesla, Growth Stocks Lead to Market Sales; JPMorgan headlines bank revenue

Dow Jones futures changed little overnight, along with S&P 500 futures and Nasdaq futures, with JPMorgan and other bank revenues at a loss. The stock market had a tough Thursday, when highly valued growth stocks such as Tesla, Roblox and ServiceNow led the retreat.

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Nasdaq fell to the worst industry since October while the S&P 500 plummeted under key support.

Taiwan semiconductor (TSM) broke out on Thursday on strong earnings and guidance. The TSM stock rose 5.3% to 139.19, and managed an 11-month cup-with-handle base with a buy point of 135.60, according to MarketSmith analysis. But the shares closed at the bottom. Manufacture of chip equipment Materials used (AMAT), Lam Research (LRCX) and ASML (ASML) gathered on TSM’s strong investment plan, but they deleted gains or reversed lower

Growth stocks struggled in general, especially highly valued unprofitable names or those with three-digit price-income ratios, including Tesla (TSLA), Roblox (RBLX), ServiceNow (NOW) and data dog (DDOG), along with many ARK-style stocks.

Tesla fell 6.75% on Thursday, back below the 50-day limit. RBLX shares fell 10%, back below the 200-day limit. NOW shares plunged 9.1% to their lowest level since June. The DDOG share slipped 7.65% to the worst industry since the end of August.

Boeing (BA), larva (CAT) and Honeywell (SHE) tried to keep the Dow Jones positive. The BA stock and Honeywell took back their 200-day lines and broke trend lines during the day, flashing briefly with aggressive entries before retiring. The CAT stock jumped after a break for a few days after a gap above the 200-day limit.

Bank income

Dow Jones component JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) reports earnings for the fourth quarter early on Friday, kicking off bank revenues as finances have been high in the new year.

The JPM stock is still active from the 50-day line. Wells Fargo is slightly extended while Citigroup is trying to recover.

Tesla and Nvidia shares are on the IBD Leaderboard. The AMAT stock is on SwingTrader. ASML shares and ServiceNow are on IBD Long Term Managers. The Tesla stock and AMAT are at IBD 50.

The video embedded in this article discusses Thursday’s market sales and analyzes the TSM stock, Simon Property Group (SPG) and JPMorgan.

Dow Jones Futures today

Dow Jones futures increased relative to fair value. S&P 500 futures and Nasdaq 100 futures were flat.

The 10-year government interest rate rose 2 basis points to 1.73%.

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

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

Stock market rally

The rise in the share price opened higher, was mixed, and then turned into a growth-driven sale to close almost downturns.

The Dow Jones Industrial Average fell 0.5% in Thursday’s trading after being up for much of the session. The S&P 500 index fell 1.4%, with ServiceNow performing the worst. The Nasdaq composite slipped 2.5%. Small-cap Russell 2000 lost 0.8%.

The 10-year government interest rate fell for the third day in a row to 1.71% on Thursday. Fed Governor Lael Brainard, who spoke at his confirmation hearing to become Fed deputy chief, said inflation was her top priority. This is the latest proof that even dove-like Fed members are now in favor of tightening monetary policy.

Crude oil futures fell 0.6% to $ 82.12 a barrel while natural gas prices fell after rising in the previous session.

Important ETFs

Among the best ETFs, Innovator IBD 50 ETF (FFTY) fell 1.3%, while Innovator IBD Breakout Opportunities ETF (BOUT) lost 0.7%. iShares Expanded Tech-Software Sector ETF (IGV) fell 4.2%. Both NOW stock and Datadog are IGV stocks. VanEck Vectors Semiconductor ETF (SMH) fell 1.7%, with TSM shares, AMAT, LRCX and ASML all notable components.

The SPDR S&P Metals & Mining ETF (XME) retreated 1.6% and the Global X US Infrastructure Development ETF (PAVE) declined 0.3%. The US Global Jets ETF (JETS) climbed 2.2%, with Delta Air Lines (DAL) earnings and guidance that lifts the airlines. SPDR S&P Homebuilders ETF (XHB) fell 0.4%. Energy Select SPDR ETF (XLE) decreased 0.5%. Financial Select SPDR ETF (XLF) gave up 0.3%, with JPM shares, Wells Fargo and Citigroup all notable holdings. Health Care Select Sector SPDR Fund (XLV) gave up 1.55%

ARK Innovation ETF (ARKK) reflected more speculative history stocks, falling 5.4% to a new low of 18 months and ARK Genomics ETF (ARKG) fell 4.4% to a low of 19 months. The Tesla share is still the top holding across ARK Invest’s ETFs. ARKK also owns some RBLX shares.

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Market Rally Analysis

The rise in equities is facing its first test since the decline from Monday’s lowest levels, and it is not going well so far. After meeting resistance on its 10-day lines on Wednesday, the major averages struggled on Thursday.

The Nasdaq composite led to sales, falling to a three-month low just above the 200-day moving average.

The S&P 500 slipped below its 21-day and 50-day lines. The Dow Jones rose during the morning, but as the broad market sold out, the blue-chip index also turned lower. Still, the S&P 500 and Dow Jones are just a few strong days away from record highs.

Russell 2000 also lost ground, falling further from its 50-day and 200-day lines.

Losers beat the winners a little on the NYSE, but led decisively on the Nasdaq.

Software and highly valued growth stocks still look terrible. Tesla shares fell sharply, but at least they stay close to the 50-day line within a base. Software executives such as DDOG and ServiceNow have fallen well below the moving average.

Some stock stocks hold up well, but are subject to reversals during the day just as they begin to build momentum. Meanwhile, great leaders such as Nvidia (NVDA) is back close to the last lowest levels. Marvell technology (MRVL), which had stayed above its 50-day line, fell 7.4% to undermine that key level.

In addition to energy and financial stocks, manufacturing companies such as Boeing, Caterpillar and Honeywell are showing signs of life. Chemical manufacturers like Ashland (ASH) sets up.

Ford Motor (F) and other traditional car manufacturers such as Toyota (TM) and Stellantis (STLA) works well. The same is true of shipping companies, with the notable exception of most trucking companies.

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What to do now

A mixed, choppy stock market rise is treacherous. Real economic sectors have held up reasonably well. But a sale of growth stocks can drag down the entire market. That’s what happened on Thursday. Or investors can rotate back to growth and out of the economy or energy.

As MarketSmith product trainer Harold Morris said on Thursday’s IBD Live, position size is key in this volatile, uncertain market. The same goes for buying close to the 50-day line in most cases. Do not bet too big on specific stocks or broad sectors, and look for early listings.

There is also nothing wrong with keeping everything or most in cash, and waiting for real market power. Nasdaq is stuck below its 21-day and 50-day lines, along with many stocks. It is not a hospitable environment.

When bulls and bears are fighting for market dominance, it makes a lot of sense to stay away.

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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