Dow Jones futures tilted higher Thursday morning, along with S&P 500 futures and Nasdaq futures, with Tesla (TSLA) rival Nio (NIO) headlining overnight earnings reports. Growth once again lagged in Wednesday’s stock market rally, while recovery plays led amid a tame inflation report and the White House seeing coronavirus cases “leveling off.”
The Dow Jones and S&P 500 hit fresh all-time highs, with steel, materials, industrial, financial and some retail. The Nasdaq composite retreated modestly, paring losses even as Treasury yields dipped following a cooler-than-expected consumer price index. But many growth stocks suffered bigger losses, including chip and software names such as Applied Materials (AMAT) and CrowdStrike (CRWD), with those charts starting to look more damaged.
Amid tentative signs of a peak in new Covid cases, coronavirus vaccine makers Moderna (MRNA) and BioNTech (BNTX) sold off hard. Supplier Maravai LifeSciences (MRVI) erased a big post-earnings gain. Other Covid plays, such as Zoom Video (ZM) and DocuSign (DOCU), also retreated, while better news on the virus may have weighed on highly valued software names generally.
On the plus side, a few recent IPOs surged Wednesday on earnings, including Upstart Holdings (UPST), Doximity (DOCS) and Unity Software (U).
But for the most part, growth took a back seat while recovery plays drove the advance.
Housing-related retailers RH (RH) and Home Depot (HD) cleared buy points, with builder Lennar (LEN) arguably actionable. Shipping-related Textainer (TGH) and industrial play Crane (CR) broke out, while trucking operator Old Dominion (ODFL) flirted with a buy point. Capital One (COF) and Five Below (FIVE) extended their recent breakouts.
Bottom line: Sector rotation is alive and well in the stock market rally. Investors need to adjust their portfolios and watchlists, but not upend their holdings either.
After the close, Nio stock, eBay (EBAY), high-end music speaker maker Sonos (SONO) and U.S. cannabis …….