Dow Jones futures rose late Friday, along with S&P 500 futures and Nasdaq futures, fueled by Dow Jones giants Nike (NKE) and JPMorgan Chase (JPM). Meanwhile, Tesla stock remained volatile late amid continued heavy trading as it enters the S&P 500 index. The FDA is expected to give emergency approval to the Moderna coronavirus vaccine.
The stock market rally fell modestly Friday as stimulus deal talks faced some objections and the trillion-dollar giants Apple stock, Amazon.com (AMZN) and Google parent Alphabet (GOOGL) all fell more than 1%, while Microsoft (MSFT) lost a fraction. Intel (INTC) tumbled on a new threat to its chip business. However, the major indexes slashed losses into the close. Leading stocks generally held up well, notably cybersecurity names such as CrowdStrike (CRWD) and Zscaler (ZS). Meanwhile, the major indexes all rose for the week, hitting record highs.
Nike earnings were better than expected for the athletic apparel and shoe giant. Nike stock jumped late.
The Federal Reserve gave passing grades to major financial firms in the latest bank stress tests. More importantly, the Fed said JPMorgan Chase, Goldman Sachs (GS), Citigroup (C), Bank of America (BAC) and others could resume buybacks, but not raise dividends. JPMorgan and several others announced plans to resume share repurchases. JPMorgan stock jumped late Friday, along with Citigroup, Bank of America and other banks.
Tesla (TSLA) fell nearly 3% in late trade. But during Friday’s regular session, TSLA stock rallied 6% to 685, hitting yet another record high. Volume was huge, especially in the final minutes, as index funds bought up shares ahead of Tesla stock joining the S&P 500 index before Monday’s open. After a 70% surge over the past month on the S&P 500 announcement, how will Tesla stock react?
Apple, Microsoft, Intel, Nike, JPMorgan and Goldman are all on the Dow Jones Industrial Average and S&P 500 index, with AAPL, MSFT and INTC also Nasdaq components.
Dow Jones Futures Today
Dow Jones futures climbed 0.6% vs. fair value and S&P 500 futures advanced 0.4%, buoyed by Nike, JPMorgan and other banking giants. Nasdaq 100 futures climbed 0.1%, not benefiting from banks and with Tesla stock giving up some regular session gains.
Dow futures are now closed and will resume trading Sunday evening. However, ETFs tracking the major indexes remained active, indicating a 0.4% gain for the Dow, 0.25% for the S&P 500 and 0.25% for the Nasdaq 100.
The FDA is expected to give emergency use approval to the Moderna coronavirus vaccine Friday night, or Saturday morning at the latest. Moderna coronavirus vaccine shipments would begin almost immediately, with vaccinations starting early next week. Pfizer coronavirus vaccine jabs began Monday, with Vice President Mike Pence and congressional leaders getting their first shots Friday.
Moderna (MRNA) fell 2.6% on Friday.
Coronavirus cases worldwide reached 75.93 million. Covid-19 deaths topped 1.67 million.
Coronavirus cases in the U.S. have hit 17.84 million, with deaths above 320,000.
Stock Market Rally
U.S. Stock Market Today Overview
Last Update: 4:10 PM ET 12/18/2020
The stock market rally had a down day according to the major indexes, but they slashed losses in the final minutes.
The Dow Jones Industrial Average lost 0.4% in Friday’s stock market trading. The S&P 500 index dipped 0.35%. The Nasdaq composite lost less than 0.1%.
For the week, the Dow Jones climbed 0.5%, the S&P 500 1.3% and the Nasdaq just over 3%.
A stimulus deal is close, but faces some sticking points. With the economic recovery stalling amid coronavirus restrictions and the Jan. 5 Georgia Senate runoffs looming, there are strong reasons to reach a stimulus deal. Lawmakers also would like to get out of town for the holidays. But they looked set to work through the weekend.
Tech Giants Retreat
Intel tumbled 6.3% on a report that Microsoft is working on its own in-house chips for PCs and servers. That comes as Apple has already started using its own chips for Mac computers, with the prospect of more.
Apple stock fell 1.6% to 126.65, still above a 125.49 early entry. If shares can consolidate for a few days, Apple could form a handle with a proper buy point. Google stock fell 1.2% to 1,720.03, back below a 1,726.20 buy point. Shares fell 2.7% for the week, but settled just above their 10-week line. Amazon stock sank 1.1% on Friday but gained 2.7% for the week, holding its 50-day and 10-week lines. Microsoft stock pared its Friday loss to 0.4%, up 2.5% for the week.
Growth stocks overall had a strong week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.7%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 1.3%, capping weekly gains of 5.2% and 4.1%, respectively. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.4% on Friday and 5.6% for the week. The VanEck Vectors Semiconductor ETF (SMH) dipped 0.3% on Friday with a 2.2% weekly gain.
The ETFMG Prime Cyber Security ETFHACK spiked 4% on Friday and 7.5% for the week, as SolarWinds hacking attack compromised more government agencies and companies such as Microsoft. That’s highlighting the need for better cybersecurity, and pushing up cybersecurity stocks. CrowdStrike stock leapt 16% for the week, with Zscaler stock and Okta (OKTA) up 7.7%. SailPoint (SAIL) raced 14% higher and Palo Alto Networks (PANW) 15%.
Nike earnings per share unexpectedly rose 11% to 78 cents in its fiscal Q2. Sales advanced 9% to $11.24 billion after two down quarters. Digital sales surged 84%, up from 82% in Q1 and 75% in the quarter before that.
Nike stock popped 5% late Friday. Shares closed down 2.3% to 137.28 on Friday after hitting a record high intraday.
Bank Stress Tests
The Federal Reserve gave JPMorgan and other banking giants clearance to resume stock buybacks next year, but will continue to cap dividends for now. The Fed suspended buybacks and dividend hikes in June to preserve capital as the coronavirus pandemic and shutdowns slammed the economy.
With economic prospects improving, especially after coronavirus vaccinations reach the bulk of the U.S. population, the Fed is less concerned about banks’ financial health.
JPMorgan said it will buy back $30 billion in stock, a taste of what to expect in the coming days.
JPMorgan stock rose 5% late Friday, signaling a possible breakout from a handle in a consolidation going back to the start of the year. Goldman Sachs and Bank of America stock rallied 5%, with Citigroup up 6%.
Positive Pause For Stock Market Rally?
The Nasdaq composite, which reversed from a record high Friday, is still 7.2% above its 50-day moving average. That’s not extended per se, but close to being so.
So Friday’s retreat in the major indexes, with growth stocks doing well, is fairly positive. Tech titans like Amazon stock can trudge along, trying to keep bullish sentiment and the major indexes in check. Meanwhile, growth stocks can power ahead.
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