Equity futures fell early Tuesday as rising commodity prices fueled fears about inflation, even though company reports largely reflect economic recovery. Oil and copper prices were trading near their highs. Vaccine news pushed IBD 50 BioNTech shares higher, while Under Armor and Gartner’s earnings surged near their point of purchase. Tech giants Apple, Microsoft and Salesforce.com detained the Dow Jones today.
Dow Jones futures fell 0.5% after the index continued to hold above 34,000 on Monday. S&P 500 futures were down 0.6%. Nasdaq 100 Futures dropped 0.9% as ASML Holding (ASML) and Incite (INCY) moved down to the bottom of the list.
Gartner (This and Under the armor (UA) topped the S&P 500, rallying 9% and 3.6%, respectively, on news of earnings. CVS Health (CVS) was the main driving force, climbing 2.7% after well above analyst expectations in the first quarter. CVS closed Monday above a double-bottomed base buy point of 75.49, in a buy range of 79.26.
Energy stocks were on the move as oil prices climbed to a 2-1 / 2-year high and fuel cell stocks were hit hard. Fuel cell leader Ballard Power Systems (BLDP) reported shortfalls in first-quarter sales and profits late Monday night. Ballard shares dropped 9% in premarket. Plug Power (PLUG), which reported Thursday, fell 3.2%. Fuel cell (FCEL) lost 1.7%.
Eight of the top 15 profitable companies on the S&P 500 list are oil stocks. Marathon oil (MRO) and Occidental Petroleum (OXY) took over the group.
Fertilizer manufacturer Mosaic (MOS) fell 5% to the bottom of the S&P 500, despite reports of strong first-quarter results and a positive global fertilizer outlook.
Chain stores Kroger (KR) fell by 3%, while the competitor Albertsons (ACI) lost 2% in early trading. Goldman Sachs downgraded Albertsons to Neutral from Buy and Kroger from Neutral to Sell. The report says the economic recovery signals a return to pre-pandemic nutritional trends and encourages consumers to eat away from home more often.
Dow Jones Today: Chevron Up, Apple Down
Chevron (CVX) jumped 1% to take over the Dow Jones today. On the IBD SwingTrader listing, Direxion Daily Energy Bull 2X (ERX) shares jumped 2.4% premarket.
Apple (AAPL) lowered the Dow Jones to 1.1% as the company approaches its second day of defense against allegations of monopoly conduct in an Oakland, California court. Tim Sweeney, CEO of Epic Games, the plaintiff in the case, said Apple made more profits from selling software on its App Store than the developers themselves.
The case, which will last three weeks, could affect the way Apple and other companies deal with the sale and distribution of their applications.
Apple shares rose 0.8% on Monday after testing the 21-day exponential moving average. The stock is 2% below its buy point of 135.63 on a 14-week cup and handle base.
Profit: Gartner, Under Armor, Chegg
Tech researcher Gartner increased growth by 2% after reporting a third straight quarter of revenue acceleration and its first revenue growth since the first quarter of 2020. The stock ended Monday above a buy point of 1,898.83 off the base handle cup, in a buy range that runs to 199.43.
Digital Education Leaders Chegg (CHGG) gained more than 5% despite analysts failing to hit their first quarter earnings target and pushing second quarter revenue below consensus. Chegg shares fell 8.1% on Monday, breaking support at the 200-day moving average.
Under Armor fell 4% after reporting the biggest jump in profit in two years and first-quarter positive revenue growth since Q4 2019. The stock closed less than 3% below the 20.41 buying point on Monday, according to IBD MarketSmith analysis, as a six-week flat bottom.
Bitcoin Sways, Ethereum Exceeded $ 3300
Bitcoin’s roller coaster fell to $ 55,292 late Monday night, according to CoinDesk, and then surged to over $ 56,400 early Tuesday. On April 14, the cryptocurrency climbed to a record high above $ 64,800, beating Coinbase Global (COIN) IPO. Bitcoin fell about 3% in April but has continued to rise more than 100% since December 31 after the start of the year just above $ 29,000.
Competing cryptocurrency Ethereum is up more than 7% to surpass $ 3,300. Ethereum surpassed the $ 3,000 level for the first time late Sunday night.
Vital Signs: Oil, Copper, Bond Yields
West Texas Intermediate crude jumped 1.8% to surpass $ 63 a barrel, the highest price since March 15. The price of WTI crude oil rose to $ 67.98 on March 8, the highest level since October 2018.
Copper prices fell 0.3%, holding above $ 4.51 a pound. Prices have risen 28% since December 31 to hit a February high of $ 4.30 and just below the record high of $ 4.54 set in February 2011.
ETF strategy in the stock market and how to invest in the current uptrend
Bond yields continued to fluctuate along the 50-day moving average support level. The 10-year bond yields topped 1.62% after closing just above 1.60% on Tuesday, according to the CBOE. At the end of March, yields surpassed pre-pandemic levels, rising to nearly 1.76%, their highest level since January 2020.
Biotech, Pfizer Vaccine News
BioNTech (BNTX) topped IBD 50 for a second day, up 2.9%. The German biotech company announced that its Covid-19 vaccine, developed in conjunction with Pfizer (PFE) has been set to obtain FDA approval for those 12 to 15 years of age. Authorization can take place as early as the beginning of next week. Pfizer shares gained 1.5% in early trading.
BioNTech shares rallied, surpassing six-week gains and climbing nearly 59% from a breakout of 14% in April.
Dow Jones Today: UnitedHealth, Goldman Rally
Today’s four-week Dow Jones index shows UnitedHealth Group (UNH) and Goldman Sachs (GS) have the most profit, while Intel (INTC) and Boeing (BA) recorded the strongest drop in the past four weeks.
UnitedHealth is up 10% from its mid-March breakout. Goldman Sachs is up more than 8% in the past four weeks, within 2% of its fixed base buy point of 356.95. On Monday, IBD analyzed the charts of Goldman Sachs and Apple in the section “Stocks near the buy zone”.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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