Dow Jones futures were little changed late Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a mixed session Tuesday, as Micron Technology (MU) and chips led a growth retreat. But the Dow Jones and S&P 500 hit all-time highs, with steel, financial, retail and housing-related stocks faring well as the Senate passed a bipartisan infrastructure bill.
Cryptocurrency exchange Coinbase (COIN), gaming development software Unity Software (U), AI lending platform Upstart Holdings (UPST), online food ordering play Olo (OLO), sports streaming and would-be-gambling operator FuboTV (TV), Covid vaccine component supplier Maravai LifeSciences (MRVI) were just some of the recent IPOs reporting earnings late Tuesday.
Coinbase stock, Unity, Upstart, FuboTV, Oolo and Maravai all beat views. UPST stock surged up the right side of a base, signaling a definitive clearing of resistance from the past several weeks. Fubo soared overnight after closing just above its 50-day and 200-day lines. MRVI stock rose sharply after pulling back from recent highs.
DRAM-amine For Growth Stocks
A report predicting weak DRAM pricing hit Micron stock, which sank 5.4%. Memory-exposed chip-equipment makers Applied Materials (AMAT) and Lam Research (LRCX) also were hit, losing 2.8% and 3.8%, respectively. Chip stocks came under pressure generally.
The chip retreat appeared to be a catalyst for growth names to erase gains or turn lower. Another factor: Treasury yields rose for a sixth straight session.
Steel, Infrastructure Stocks Jump
Meanwhile, rebounding crude oil prices, a continued winning streak for Treasury yields and the Senate approving a $1.2 trillion infrastructure bill gave real economy stocks a boost. Nucor (NUE) surged nearly 10% Tuesday, ArcelorMittal (MT) rose 3% and Steel Dynamics (STLD) gained 6%. NUE stock, MT stock and STLD stock already were actionable in recent days, but are looking somewhat extended now. SPDR S&P Metals & Mining ETF (XME) broke a downtrend in a handle while VanEck Vectors Steel ETF SLX cleared a handle buy point.
Capital One (COF) rose 2.7% to 170.67, breaking past a 168.10 flat-base buy point, according to MarketSmith analysis. Wells Fargo (WFC) and Goldman Sachs (GS) extended breakouts, both still in buy range.
Lennar (LEN) is on the edge of breaking the downtrend of a handle, briefly flashing an early entry before settling for a 1.5% gain to 105.29. The official LEN stock handle entry is 108.06. Home Depot (HD) and RH (RH) are also showing positive action.
As for discount retail, Target (TGT) moved past a three-weeks-tight entry. Burlington Stores (BURL) blasted above a cup-with-handle base, after spending over a week just above or below the buy point. Several other discounters showed bullish action.
Dow Jones Futures Today
Dow Jones futures were roughly unchanged vs. fair value. S&P 500 futures fell slightly and Nasdaq 100 futures edged higher.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. Recent IPOs reporting earnings, such as Upstart and Olo, are especially prone to volatile action and reversals.
Stock Market Rally
The stock market rally opened higher, but the Nasdaq soon turned negative as Micron stock sold off on DRAM pricing news.
The Dow Jones Industrial Average rose 0.5% in Tuesday’s stock market trading. The S&P 500 index eked out a 0.1% gain. The Nasdaq composite sank 0.5%. The small-cap Russell 2000 edged up 0.2%.
U.S. crude oil futures rose 2.7%. The 10-year Treasury yield rose 3 basis points to 1.34%, up from an intraday low of 1.13% on Aug. 4.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) sank 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) sank 1.2%. The VanEck Vectors Semiconductor ETF (SMH) slid 1.3%. Micron stock, AMAT and LRCX are all notable SMH components.
The Metals & Mining ETF XME popped 4% and the infrastructure ETF PAVE climbed 2.2%. U.S. Global Jets ETF (JETS) ascended 1.85%. SPDR S&P Homebuilders ETF (XHB) advanced 1.25%. The Energy Select SPDR ETF (XLE) rose 1.8% and the Financial Select SPDR ETF (XLF) just over 1%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 2.6% and ARK Genomics ETF (ARKG) 3%. ARKK fell just below its 200-day line and is near its 50-day. ARKG undercut its 50-day line.
Market Rally Analysis
Growth stocks struggled in Wednesday’s stock market rally. Micron stock and DRAM pricing may have been a trigger, along with rising Treasury yields, for taking profits in a wide variety of growth names.
But the Nasdaq composite, as well as the IGV and chip ETFs, are still close to record highs.
On the upside, steelmakers like Nucor stock surged Tuesday, with several definitive breakouts. With MLM stock and other materials plays clearing breakouts, it’s clear that the Senate infrastructure bill buoyed many real world names. Financials like COF stock were strong amid rising Treasury yields, while housing-related fared well despite rising yields.
What To Do Now
Growth stocks still look to be in decent shape overall. Perhaps a few recent buys or adds are having some trouble, but that area of the market doesn’t look especially damaged. The past few days have shown the value of being diversified. If you owned, say, ArcelorMittal, Wells Fargo, Burlington Stores and Lennar stock, Tuesday could have been a neutral or positive session for your portfolio, offsetting losses in various growth names.
There’s nothing wrong with a lot of sitting. If you have various stocks that are up nicely over the past few months, you don’t have to take a lot of action.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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