Dow Jones futures rose moderately after hours, along with S&P 500 futures and Nasdaq futures. FedEx (FDX) and Nike ( NKE ) Earnings is leading the charge.
The stock market rally ended modestly on Tuesday, snapping a four-day losing streak.
Meanwhile Appl ( AAPL ) flirted with cutting its bear market lower a day later Amazon.com (AMZN) did.
Tesla ( TSLA ) continued to sink. TSLA stock has now more than doubled its gains since its August 2020 stock split.
On the plus side, oilfield services play Schlumberger (SLB) Halliburton (HAL) and ProFrac ( ACDC ) is showing strength, with Schlumberger stock and ACDC stock highlighting early buy points on Tuesday.
A video embedded in the article discussed Tuesday’s market action and analyzed SLB stock, Halliburton and ProFreak.
Nike, FedEx earnings
Dow Jones giants Nike and FedEx reported earnings late Tuesday, also providing some sense of the holiday shopping season.
Nike’s earnings and sales are on top of expectations, but are up 43% from a year ago. Margins fell due to mark-ups. NKE stock rose 13% after hours, indicating a move above the 200-day line. Shares rose 0.2% to 103.21 on Tuesday.
FedEx’s earnings topped estimates, but revenue declined. FDX stock rose 5% in extended trading. Shares closed up 2.6% at 164.35, below the 50-day line.
Dow Jones futures today
Dow Jones futures rose 0.65% against fair value, with NKE stock suggesting a boost. S&P 500 futures advanced 0.55%. Nasdaq 100 futures rose 0.65%.
The 10-year Treasury yield rose 3 basis points to 3.71%.
Note that overnight action in Dow futures and elsewhere does not translate into actual trading in the next regular stock market session.
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Stock market rally
The stock market rally erased opening losses and closed slightly higher.
The Dow Jones Industrial Average rose 0.3% in stock market trading on Tuesday. The S&P 500 index rose 0.1%, with Tesla stock the index’s worst performer. The Nasdaq composite rose 1 point. The small-cap Russell 2000 advanced 0.5%.
Apple stock fell as low as 129.89, within 1% of June’s bear market low of 129.04. Shares fell 7 cents to close at 132.30. Amazon stock rose 0.3% after cutting Monday’s fresh bear lows.
US crude oil prices rose 1.2% to $76.09 a barrel. Natural gas prices fell 9% after falling more than 11% on Monday.
The 10-year Treasury yield rose 10 basis points to 3.68% after popping 10 basis points on Monday. The Bank of Japan was slightly muted on Tuesday, with Japan’s 10-year yield rising to 0.5%.
The 2-year yield, most closely tied to Fed policy, was essentially flat at 4.27%.
On Friday, investors will receive the November PCE inflation report, with economists expecting a significant decline in both headline and headline inflation.
Among growth ETFs, the iShares Expanded Tech Software Sector ETF ( IGV ) rose 0.5%. The VanEck Vector Semiconductor ETF ( SMH ) fell 0.6%.
Reflecting more speculative stocks, the ARK Innovation ETF ( ARKK ) fell 0.2%, hitting a new five-year low. The ARK Genomics ETF ( ARKG ) rose 0.8%. Tesla is a major holding within Ark Invest’s ETFs.
The SPDR S&P Metals and Mining ETF ( XME ) rose 2.6% and the Global X U.S. Infrastructure Development ETF ( PAVE ) rose 0.4%. The US Global Jets ETF ( JETS ) advanced 0.4%. The SPDR S&P Homebuilders ETF ( XHB ) dropped 0.55%. The Energy Select SPDR ETF (XLE) returned 1.5% and the Financial Select SPDR ETF (XLF) rose 0.4%. The Healthcare Select Sector SPDR Fund ( XLV ) closed partially lower.
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Stock close to purchase points
Oil services companies are rising, even with crude prices near one-year lows, perhaps in anticipation of stronger prices in 2023. Exxon Mobile (XOM) and Chevron (CVX) recently released their capital spending plans for the coming year, offering service companies like Halliburton, Schlumberger, ProFreak and more.
SLB stock rose 3.9% to 51.76, moving above its 50-day and 21-day moving averages and arguably breaking a steep downtrend, making a case for an early entry. Schlumberger stock is still in a valid buy zone from a deep cup base. SLB stock is set to make a new base later this week with a buy point of 56.14.
Oil services major Halliburton rose 3.8% to 37.42, above its 21-day line, still close to the 50-day line. HAL stock has a buy point of 40.09 with a 47% deep cup from a strong base, according to MarketSmith analysis. It does not have an obvious initial entry. The manuscript will be long enough to have its own base later this week.
ProFrac stock rose 6.9% to 23.23, above the 50-day and 21-day lines and breaking a recent downtrend, as did SLB stock. This can serve as a primary entry. ACDC stock should have a new consolidation with a 27.10 buy point later this week. ProFrac stock went public at 18 shares. It has had three bases since then, with Breakout not working for long.
Tesla stock fell 8.1% to 137.80, hitting another two-year low. Shares of the EV giant have fallen 67% from their November 2021 peak and 29% in December alone.
Tesla stock has now reversed its uptrend since the August 5-1 stock split of 2020. (TSLA stock also split 3-for-1 in August 2022.)
Tesla’s China sales slowed for a second straight week, according to weekly data. That’s despite the ongoing year-end incentive, which ends Jan. 1 with China’s EV subsidies.
Elon Musk’s Twitter saga raises concerns of significant damage to the Tesla brand. Many long-time bulls like TSLA Bull are increasingly critical of Musk.
Evercore and Daiwa Capital Markets cut their price targets on TSLA stock on Tuesday, both cited on Twitter. Oppenheimer downgraded Tesla on Monday.
Tesla stock failed to rally on Monday despite Elon Musk saying he would step down as CEO of Twitter after Twitter users voted on the issue.
Shares edged lower on Tuesday even as major indexes and many leading stocks tried to hold ground. Heavy selling over the past few weeks suggests that major institutions are buying or selling TSLA stock holdings.
Late on Tuesday, Musk said he would step down as Twitter’s chief once he found a successor and that he would run the software and server teams.
At some point Tesla stock may recover and go on another run, but that may be months or even years away.
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Market rally analysis
After a sharp selloff from the December 13 high, the stock market rally barely ended its losing streak.
The major indexes are oversold for a bounce and appear to be “turned” for a reason. They got one, though it wasn’t much.
The Dow Jones found support at the 50-day line, but other key indicators did not make any significant technical moves.
The stock market rally remains under pressure.
AAPL stock has come off near bear market lows, but that doesn’t mean it will continue to do so.
Many leading stocks have found support at key levels. But whether they will take hold and recover depends largely on the overall market.
Energy names may be a bit of an exception, given how they trade on crude oil or natural gas prices. Oil service companies like SLB stock and coal producers like Unit Energy are doing well now.
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what to do now
This is not a good time to buy stocks. While the major indexes held their ground and some top stocks did not fall, the market rally is still weak.
A retracement of the S&P 500’s 50-day line would appear to be a minimal sign of strength, with tests of the 200-day and December highs.
Even if the market recovers, Tesla’s continued decline on Tuesday shows that not all stocks will follow suit.
If you feel compelled to play this market, take pilot positions and be prepared to take quick profits and cut losses short.
Look for stocks to hold and find support at key levels. Stocks with strong relative strength during weak markets can be leaders in future developments.
Read the big picture daily to stay in tune with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.
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