Dow Jones futures fell modestly early Wednesday, along with S&P 500 futures and Nasdaq futures, signaling a slim pause in the stock market rally that has run up strongly in the past two weeks. Apple (AAPL) and Dutch Bros (BROS) held above buy points after breaking out on Tuesday.
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Energy plays Callon Petroleum (CPE) and SolarEdge Technologies (SEDG) rose near buy points as crude oil prices continued to rebound from Tuesday’s intraday lows.
Russia-Ukraine News
Russia continues shelling vs. Kyiv, even after saying Tuesday it would dramatically reduce military operations near Ukraine’s capital. That follows significant Russian troop and equipment losses, with Ukraine’s military regaining territory in recent days. Some Russian units are reportedly leaving the area, but U.S. officials suspect they’ll be redeployed to the south and east, where Russia holds stronger positions.
After some positive signals on Tuesday, optimism faded over ongoing Russia-Ukraine talks. Russia said Wednesday that it sees no breakthrough so far. Still, Russia’s demands have eased considerably amid military setbacks.
Ukraine President Volodymyr Zelenskyy said Wednesday that Russia is sending in new troops.
Key Earnings, Corporate News
Micron Technology (MU), Lululemon Athletica (LULU) and BioNTech (BNTX) were overnight earnings winners. Micron reported strong results and guidance. Lululemon beat on EPS and announced a $1 billion buyback.
BioNTech earnings topped views, while the coronavirus vaccine maker also plans a two euro ($2.33) special dividend and 1.5 billion euro buyback. MU stock, LULU stock and BNTX stock all bounced in Wednesday’s premarket, but all are well off highs.
Upscale furniture chain RH (RH) and teen-focused discounter Five Below (FIVE) topped on earnings but missed on sales. Both fell early Wednesday, even as RH announced a three-for-1 split.
Crane Co. (CR) will split into two publicly traded companies. Crane Co. will keep the aerospace and electronics business as well as its process-flow technologies unit. The payment and merchandising technologies business will be spun off into Crane NXT. CR stock rose slightly in premarket trading. Crane shares have been trading around a 108.77 buy point for the past several sessions.
Dow Jones Futures Today
Dow Jones futures fell 0.3% vs. fair value. S&P 500 futures lost 0.3%. Nasdaq 100 futures retreated 0.6%.
U.S. crude oil prices rose more than 3%, topping $107 a barrel. Crude oil prices sank 1.6% to $104.24 on Tuesday, but slashed intraday losses below $100.
The 10-year Treasury yield was flat at 2.4%. The 10-year yield fell 8 basis points on Tuesday, briefly inverting below the two-year yield.
The ADP Employment Report estimated private payrolls rose by 455,000 in March vs. a revised 486,000 in February. That was slightly stronger than expected. The Labor Department releases its March employment report on Friday.
Remember that premarket action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally continues its remarkable advance since March 14.
The Dow Jones Industrial Average climbed 1% in Tuesday’s stock market trading. The S&P 500 index gained 1.2%. The Nasdaq composite leapt 1.8%. The small-cap Russell 2000 jumped 2.7%.
The Nasdaq, S&P 500 and Russell 2000 all rallied past their February short-term highs, with the Nasdaq closing in on its 200-day moving average. The Dow Jones climbed above the 35,000 mark to reclaim its 200-day Tuesday, now just below its February peak.
A market rally pause — over several days or more — would be normal and healthy at this point. That would let the major indexes catch their breath and leading stocks set up handles, pullbacks or other buying opportunities. Of course, the market is going to do what it’s going to do. Arguably the market rally was ready for a pullback for several straight sessions, and has continued powering higher.
Apple Stock
Apple stock lost a fraction early Wednesday. On Tuesday, Shares rose 1.9% to 178.96, clearing a 176.75 double-bottom buy point. That was AAPL stock’s 11 straight gain, so investors could choose to wait for a pullback or even a handle before taking a position. Of course, that pullback may not happen anytime soon. The relative strength line is at record highs again, reflecting Apple stock’s performance vs. the S&P 500 index. The RS line is the blue line in the charts provided.
BROS Stock
BROS stock edged higher Wednesday morning. On Tuesday, Dutch Bros stock shot up 12.4% to 62.77, breaking out past a 62.11 buy point from a cup-with-handle base within a larger consolidation. The Dutch Bros coffee chain is in the midst of a big expansion.
Callon Petroleum Stock
CPE stock added 1% early Wednesday. On Tuesday, Callon stock dipped 0.4% to 60.93, but after skidding to 57.10 intraday. The shale producer has an official buy point of 65.55. But investors could start a position in CPE stock above Monday’s high of 62.33. That would be above the vast majority of Callon’s trading, aside from a brief intraday spike on March 8. The Callon Petroleum stock chart does have a lot of “porcupine spikes,” with shares surging intraday and then closing well off highs.
SolarEdge Stock
SEDG stock rose nearly 2% before the open. Shares of the solar power products firm fell 2.6% to 324.50 on Tuesday, but closed well off highs. SolarEdge stock has a 335.67 cup-with-handle buy point. But shares tend to swing quite a bit on a daily basis.
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