Stock futures defended uneven gains Thursday amid mixed earnings news and economic data, which included sharp spikes in housing starts and mid-Atlantic region manufacturing activity. ASML Holdings and Taiwan Semiconductor stirred up the chip sector. Paccar and Ford jumped on autonomous/electric vehicle news. Bitcoin slumped, but PayPal Holdings jumped toward a buy point. Apple traded high on the Dow Jones today, after an analyst hiked the stock’s price target ahead of its first-quarter report.


Nasdaq 100 futures led, gaining 0.5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} with ASML Holdings (ASML) and Paccar (PCAR) leading in early trade. Dow Jones futures climbed 0.2{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}, and S&P 500 futures rose 0.25{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} above fair value. Small caps traded alongside the Nasdaq, with Russell 2000 futures up 0.5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}.

Airlines traded near the bottom of the S&P 500 and the Nasdaq. United Airlines (UAL) led the declines, down nearly 2{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} after undercutting analysts’ fourth-quarter expectations and providing weak Q1 guidance. DuPont (DD) dropped to the bottom of the S&P 500 on a downgrade to neutral, from buy, from Bank of America.

In other earnings news, Kinder Morgan (KMI) rose 3{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}, and Keycorp (KEY) added 2{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} after earnings reports. Contract manufacturer Plexus (PLXS) gained 2.9{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} after a fiscal first-quarter earnings beat and a positive outlook from management.

Netflix (NFLX) pulled back 0.9{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}, after it scored a breakout with an earnings-fueled 16.9{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} gain on Wednesday. Netflix was Wednesday’s IBD Stock Of The Day.

Chip stocks were in motion, after posting a soft session on Wednesday. ASML Holdings punched up 4.7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} to lead the Nasdaq after reporting a powerful fourth-quarter performance late Wednesday. New Street Research upgraded the stock’s European shares to buy, from neutral. ASML stock has climbed in 10 of the past 11 weeks, and is up 37{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} since clearing a double-bottom base buy point at 401.25 in early November.

Taiwan Semiconductor (TSM) topped both the IBD 50 and IBD Leaderboard lists in premarket trade. The stock rose 3.5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} in early trade. Shares are in a profit-taking zone, up more than 20{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} since clearing a 107.94 three-weeks tight buy point earlier this month.

The iShares PHLX Semiconductor ETF (SOXX) gained 0.8{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} in premarket trade.

Jobless Claims Near Highs; Housing Starts, Philly Fed Index Spike

First-time applications for unemployment support rose to 900,000 in hte week ended Jan. 16, the Department of Labor reported. That was above the 890,000 claims projected by economists, but well below the prior week’s jump to 965,000 claims, a five-month high.

Homebuilder stocks got an early boost, as December housing starts soared to an annualized rate of 1.669 million. That was far above November’s 1.547 million pace, as well as economist projections for a narrow increase, to 1.558 million starts.

Building permits, an indicator of upcoming activity, accelerated to an ananualized rate of 1.709 million, vs. a rate of 1.639 million permits for November, and trouncing expectations for 1.709 million.

The Philadelphia Federal Reserve’s January Manufacturing Business Outlook Survey spiked to a reading of 26.5 for January. That was nearly triple December’s final reading of 9.1, blowing past economist expectations for a reading of 11. “Indicators for general activity, new orders, and shipments increased notably this month and remained positive for the eighth consecutive month,” the report said.

Dow Jones Today: Apple Price Target, Travelers Earnings

Microsoft (MSFT), Apple (AAPL) and (CRM) were the top gainers among the Dow industrials on Wednesday. Apple stepped up to an early lead on Thursday, up 1.4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} on the Dow Jones today after Morgan Stanley hoisted its price target on the stock to 152, from 144. The report projected above-consensus quarterly performance on both the revenue and earnings lines. Apple is due to report its fiscal first-quarter results next Wednesday.

Ahead of earnings, Apple stock presents a challenge to investors. Shares are holding above an alternative entry at 125.49. But Apple also dropped more than 7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} after briefly clearing on Dec. 29 a standard buy point at 138.08. That drop triggered the automatic sell rule. The stock has now formed a handle with a new buy point at 138.89, supplanting the prior 138.08 entry.

Insurance giant Travelers (TRV) also traded at the top of the Dow, up 1.7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}, despite a mixed fourth-quarter report.

Bitcoin Slide Continues, PayPal Jumps On Upgrade

Bitcoin continued its pullback, trading almost 5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} lower early Thursday near $32,700, according to CoinDesk. The leading cryptocurrency had hit highs above $41,500 on Jan. 8.

Among Bitcoin-related stocks, Marathon Patent Group (MARA) dropped more than 7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. MicroStrategy (MSTR) posted a 4.6{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} loss.

IBD Live: A New Tool For Daily Stock Market Analysis

PayPal Holdings (PYPL), an IBD Leaderboard stock, gained 1.4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} following a late-day upgrade on Wednesday. BTIG upgraded the stock to buy, from hold, and gave it a 300 price target. The note cited an accelerated shift to digital payments due to the coronavirus pandemic, and said the company’s growth outlook improved sharply when it began handling cryptocurrencies in October.

PayPal stock has been toggling over and under an alternative buy point at 244.35, after a bounce off support at its 21-day exponential moving average.

Paccar, Ford Get EV/Autonomous Vehicle Boosts

Heavy truck maker Paccar swung more than 5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} higher in premarket action, topping the S&P 500. The maker of Kenworth, Peterbuilt and other leading truck brands jumped 4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} on Wednesday, then retreated to finish with a factional gain. The company on Wednesday announced a partnership with startup Aurora Innovation to develop a line of autonomous heavy trucks. Paccar said the project aimed to develop and test self-driving versions of certain Peterbilt and Kenworth truck models.

Paccar stock has shaped an 11-week flat base with a 95.92 buy point, according to IBD MarketSmith chart analysis. The stock carries a weak 23 Composite Rating from IBD.

Ford Motor (F) climbed 3{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} Thursday. Ford owns a minority stake in electrical vehicle start-up Rivian. Rivian, which expects to release its first model later this year, took in $2.7 billion in fresh investment financing on Tuesday.

Ford shares cleared a flat base buy point at 9.60 on Jan. 12. Wednesday’s 8.4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} gain left the stock extended 13{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} above the buy point.

Among other EV makers, Tesla (TSLA) gained 0.4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} in early trade. China-based Xpeng (XPEV) gained 2.6{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} early Thursday. The stock is narrowing the gap to a potential buy point at 74.59. But shares reversed sharply out of early gains on Wednesday, leaving the stock down 2.6{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}.

China-based EV peer Nio (NIO) gained 0.4{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. Li Auto (LI) added 0.9{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. Li Auto stock is in a seven-week cup base. Tesla, an IBD Leaderboard stock, has been showing recent signs of climax top behavior.

Stock Market Uptrend: Some Mixed Messages

The stock market’s confirmed uptrend delivered a mixed message on Wednesday. Netflix helped revive the flagging FANG stock tech leaders, and the Nasdaq, S&P 500 and Dow industrials all rallied to record highs. The session’s advance shook off three distribution days for the Nasdaq, one for the S&P 500. That left the overall market in a more upwardly mobile stance.

However, the gain left the Nasdaq 6{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} above its 50-day moving average, hinting that the index might be due for some consolidation to allow its moving averages to catch up.

For more detailed analysis of the current stock market and its status, study the Big Picture.

The takeaway message for investors, is mind the market status: a confirmed uptrend. The market continues to give a greenlight to new or follow-on buys of leading stocks passing valid buy points. Pay close attention to sell signals, but don’t get nervous and shaken out too easily. Even if the Nasdaq does pause for some consolidation, signals at this stage point only to a touchback to nearby support.

Find Alan R. Elliott on Twitter @IBD_Aelliott


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Dow Jones Today, Futures Up; Jobless Claims Hold Above 900K; PayPal, Apple Get Analyst Boosts| Investor’s Business Daily