Dow Jones futures fell early Friday, along with S&P 500 futures and Nasdaq futures, even with JPMorgan, Wells Fargo and Citigroup earnings topping views. The stock market rally had a rough Thursday, as highly valued growth stocks such as Tesla, Roblox and ServiceNow led the retreat.
The Nasdaq tumbled to its worst close since October while the S&P 500 slid below key support.
Taiwan Semiconductor (TSM) broke out Thursday on strong earnings and guidance. TSM stock gapped up 5.3% to 139.19, clearing an 11-month cup-with-handle base with a 135.60 buy point, according to MarketSmith analysis. But shares closed at session lows. Chip-equipment makers Applied Materials (AMAT), Lam Research (LRCX) and ASML (ASML) rallied on TSM’s strong capital spending plan, but they erased gains or reversed lower
Growth stocks struggled overall, especially highly valued unprofitable names or those with triple-digit price-earnings ratios, including Tesla (TSLA), Roblox (RBLX), ServiceNow (NOW) and Datadog (DDOG), along with many ARK-style stocks.
Tesla fell 6.75% on Thursday, back below its 50-day line. RBLX stock tumbled 10%, back below its 200-day line. NOW stock plunged 9.1% to its lowest level since June. DDOG stock skidded 7.65% to its worst close since late August.
Boeing (BA), Caterpillar (CAT) and Honeywell (HON) tried to keep the Dow Jones positive. BA stock and Honeywell reclaimed their 200-day lines and broke trend lines intraday, briefly flashing aggressive entries before pulling back. CAT stock popped after pausing for a few days following a gap above the 200-day line.
Dow Jones component JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) reported better-than-expected fourth-quarter earnings early Friday, kicking off bank earnings as financials have stood tall in the new year.
JPM stock fell nearly 4% before the open. Shares are below a traditional flat-base buy point. Wells Fargo, slightly extended, rose 2%. Citigroup, still trying to recover, lost almost 4%.
Tesla and Nvidia stock are on IBD Leaderboard. AMAT stock is on SwingTrader. ASML stock and ServiceNow are on IBD Long-Term …….