Dow Jones Today, Futures Rally On Apple, Facebook, Caterpillar Earnings; Q1 GDP, Weekly Jobless Claims Due

Stock futures set up for a strong start Thursday as markets responded to Wednesday’s address by President Joe Biden, and positive earnings from Apple, Facebook and Qualcomm set the early mood. Facebook led the Nasdaq, Apple led the Dow Jones today, with Caterpillar also rising following a strong Q1 report.


Dow Jones futures traded 0.5% higher, while S&P 500 futures jumped 0.7% above fair value. Nasdaq 100 futures rallied 1.1% on the stock market today, as Qualcomm (QCOM), Align Technology (ALGN) and Skyworks Solutions (SWKS) packed the top of the index, behind Facebook (FB).

Small caps also climbed, with Russell 2000 futures rallying 0.9%.

Align Technology lined up for an early breakout, up 4.4% after ending Wednesday just below a 627.62 buy point in a 12-week cup-with-handle base.

Skyworks was in a buy range, above 195.92 buy point in a nine-week cup base.

STMicroelectronics (STM) surged more than 5% after a tight first-quarter earnings beat, and raising its Q2 guidance. The move set shares up for a breakout past a 40.18 buy point in a cup-with-handle base.

On the downside, Aspen Technologies (AZPN), eBay (EBAY), ServiceNow (NOW) and Teledoc (TDOC) took hard early hits. Ford Motor (F) dropped almost 4%, after slashing its production targets due to the industry’s shortage of chips. (AMZN) leads another heavy-duty roster of earnings report in Thursday’s afterhours session, along with Twitter (TWTR), Gilead Sciences (GILD), U.S. Steel (X), KLA (KLAC) and MicroStrategy (MSTR).

Dow Jones Today: Apple, CAT, Merck

Apple (AAPL) climbed 2.8% to lead the Dow Jones today, after reporting a 119% surge in earnings and a 54% revenue increase in its fiscal second quarter. The premarket gain pointed to a starting bell breakout past a 135.63 buy point in a 14-week cup-with-handle base. The buy range would run to 142.41.

Caterpillar (CAT) was not far behind, rallying 1.6% after earnings soared an unexpected 79% and revenue rose at better than three times the forecast pace in its first quarter.

CAT stock is poised nicely along support at its 21-day exponential moving average, ending Wednesday about 2% below a 237.88 buy point in a seven-week flat base.

Drug giant Merck (MRK) also reported early Thursday, with the stock slipping 1.8% after both earnings and revenue stopped well short of analyst targets.

On Deck: Q1 GDP, Jobless Claims

Two bits of early economic news could affect trade on Thursday. The Commerce Department releases its first-quarter gross domestic product growth assessment, and the Labor Department delivers weekly unemployment claims data. Both releases are set for 8:30 a.m. ET.

March pending home sales numbers are due from the National Association of Realtors at 10 a.m. ET.

Biden’s Speech

The Federal Reserve kept out of the news cycle ahead of President Joe Biden’s first speech to a joint session of Congress. The Fed’s policy announcement Wednesday offered investors no new news, and Chairman Jerome Powell’s press conference offered no real tweaks to prior Fed policy and perspective.

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Stock futures upshifted after President Joe Biden pitched to Congress his American Families Plan, another massive step in economic reinvestment, proposing $1.8 trillion in new spending on education, child care and paid leave.

The program would come on top of the administration’s earlier proposed $2.3 trillion infrastructure package. The combination amounts to an “ambitious effort to redefine the government’s role in shaping the economy,” according to the Wall Street Journal. They also call for some hefty hikes in taxes paid by wealthy individuals and corporations. What the proposals will look like after grinding through an evenly divided Senate remains far from clear.

Facebook Earnings

Facebook earnings jumped 93% in the first quarter, as revenue spiked 48%. It marked the company’s third straight quarter of accelerating sales growth, and the best top-line growth in years.

FB stock leapt 7% in premarket trade. Facebook stock closed Wednesday in a buy range above a 299.81 handle entry on a consolidation begun in September. FB  appears likely to be extended from that buy point on Thursday, but investors could use 315.98 as an alternate entry.

Dow Jones Today: Financials, Big Tech Lead

Reports from Caterpillar and Merck on the Dow Jones today, and from Chevron on Friday, leave 70% of the 30 Dow’s blue chips accounted for, in the first quarter of one of the most critical years in the history of the U.S. economy.

Among companies that have so far reported, nearly all have traded lower in the current week. Amgen (AMGN) has been the biggest loser, down 7.9% through Wednesday. 3M (MMM) fell 3.1%.

Apple appears on track to move higher following its blowout Q2 report. Five other companies have gained ground this week. American Express (AXP) is at the head of that pack, rallying 5.6% since Monday.

That scored a breakout for the stock, past a 150.55 buy point in what IBD MarketSmith analysis plots as a cup-with-handle base. The stock remains in a buy range through 158.08.

For more detailed analysis of the current stock market and its status, study the Big Picture.

Visa (V), Goldman Sachs (GS) and JPMorgan (JPM) have also moved higher this week. Visa remains in a buy range through 239.75. Goldman Sachs is less than 3% below a cup base buy point at 356.95. JPMorgan is attempting to build a base.

For the month, (CRM) leads the Dow, rising 11.8% as it attempts to turn up from a pullback begun in August. The stock is working on its fifth straight weekly advance, and tracking toward its fourth consecutive close back above support at both its 10-week and 40-week moving averages.

Visa, Apple and Microsoft (MSFT) are also leading the Dow in April. Success or failure of a breakout from Apple could set the mood among big tech investors. Apple’s prior breakout, in January, quickly fizzled. The stock’s last really successful breakout occurred almost exactly a year ago.

Find Alan R. Elliott on Twitter @IBD_Aelliott


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