Stocks fell into the final trading session of April on Friday, despite some strong economic data. Earnings news drove a large share of the morning's action amid month-end profit taking and continued reaction to White House's massive spending initiatives. Amazon.com and Western Digital rallied on earnings. Meanwhile, Dow Jones stock Apple fell, hit by antitrust charges from the European Union.
XThe Dow Jones Industrial Average dropped almost 190 points, down 0.4% and running even with the S&P 500. The Nasdaq Composite trimmed its early losses to less than 0.1% on the stock market today, as biotechs Seagen (SGEN), Alexion Pharmaceuticals (ALXN) and Vertex Pharmaceuticals (VRTX) surged to the top of the list.
Amazon.com (AMZN) also helped buffer early losses, rising in a buy range after scoring a big first-quarter beat late Thursday.
W.W. Grainger (GWW) rallied 4.8%, to the top of the S&P 500, after a strong Q1 report. Shares are extended from a mid-March breakout.
Twitter (TWTR) and Skyworks dragged on the S&P 500. Twitter dropped 13% after a revenue miss and lackluster second-quarter sales guidance.
Logitech (LOGI) ran high on the IBD 50 list, rising 1.3% after closing out its fiscal year with big sales and earnings beats, and announcing a $1 billion share-buyback initiative. Logitech shares have pulled back to test support at their 10-week moving average, putting them back below a 109.73 buy point in a cup-with-handle base.
IBD 50 peer BioNTech (BNTX) vaulted 5.9% to a new high. The Germany-based biotech sought jointly with partner Pfizer (PFE) to expand permissions for their Covid-19 vaccine in Europe to include adolescents.
Steelmaker and IBD Leaderboard stock ArcelorMittal (MT) slumped 3.5% in premarket trade. Shares were possibly influenced by U.S. Steel's (X) earnings report late Thursday, which showed revenue just short of analyst expectations. U.S. Steel shares dropped 2.7%. Arcelor reports its first-quarter results next Thursday.
Dow Jones Stocks: Chevron, Apple Slip
Dow Jones stock Chevron (CVX) backed off 2.7%, after reporting mixed first-quarter results early Friday. Revenue rose 5%, topping expectations for a 2% decline. However, earnings shed 31%, well below analyst targets. Fellow oil giant Exxon Mobil (XOM) also reported first-quarter results, dropping 1.4% despite clearing revenue and earnings expectations.
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Apple (AAPL) fell 0.8%, threatening to extend its losing streak to a fourth day, despite a blowout earnings report late Wednesday. The European Commission issued a charge sheet Friday, accusing Apple of distorting competition through its control over distribution of music streaming apps. The action, which was widely anticipated, could lead to fines of as much as 10% of Apple's annual revenue and alterations to its Apps store practices.
In addition, a U.S. court case against Apple gets underway on Monday, in a suit filed by Fortnite video game maker Epic.
Apple stock broke out briefly on Thursday above a 135.63 buy point in a 14-week cup-with-handle base. Shares closed less than 2% below that entry on Thursday, and tracked toward their first weekly decline in six weeks.
March Consumer Spending, Incomes Soar
Personal incomes rebounded 21.1% in March, according to the Commerce Department, reversing February's 7.1% dive and topping projections for a 20.3% bounce. Personal Consumption Expenditures rose 4.2% vs. a 1% drop in February, beating expectations for a 4% gain.
The PCE price inflation gauge rose 0.5%, more than double February's 0.2% increase, but only nominally above forecasts for a 0.4% gain. Year over year, the PCE Price Index was up 2.3%, in line with estimates.
Economic conditions in the Midwest expanded at the much strong rate then expected in April, with the Institute For Supply Mangement's purchasing mangers index soaring to 72.1 for the month — the highest reading since December 1983. That doubled up on March's surprise jump to 66.3, and blew past economist forecasts for a downturn to 64.
Earnings News: Amazon, Atlassian, Newell Brands
E-commerce and cloud computing giant Amazon reported first-quarter earnings up 215%, well above views. Revenue vaulted 44% higher, and management boosted its second-quarter guidance to well above analyst targets.
AMZN stock opened to a 1.5% gain. Shares are in a buy range from a 3,436.03 handle buy point. The buy zone runs to 3,607.83. Investors also could use 3,552.35, just above the consolidation high, as another entry.
Collaboration software leader Atlassian (TEAM) rallied 3.3%. The Australia-based outfit preannounced stronger-than-forecast fiscal third-quarter revenue results late Thursday.
TEAM stock is fighting to hold support at its 10-week moving average, below a 241.14 buy point in a double-bottom base, but 245.03 may serve as a better entry now.
Newell Brands (NWL) jumped 1.3% after reporting a 40% surge in earnings per share and a 13% revenue gain. The stock on Thursday closed even with a 26.99 buy point in a seven-week cup base.
U.K.-based drug giant AstraZeneca (AZN) powered up more than 5%, after first-quarter earnings topped analyst views.
Other names climbing on earnings news included Five9 (FIVN), ZenDesk (ZEN) and Texas Roadhouse (TXRH).
Vital Signs: Copper, Oil Prices; Bond Yields
In oil prices, West Texas Intermediate slumped 2.3%, to below $64 a barrel. WTI climbed briefly on Thursday to its highest level since mid-March, above $65. Copper added 0.4% to trade just below $4.51 a pound, within 2% of the metal's record high at $4.58, set in January 2011. Copper and oil prices are important indicators of economic sentiment, and drive moves in mining and energy stocks.
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Bond yields eased slightly, with the 10-year yield at 1.63%. The 10-year settled at 1.64% Thursday, after a jump above 1.68%, according to CBOE data. Yields skirted pre-pandemic levels in late March, climbing to almost 1.76% — the highest level since January 2020. Yields had started 2020 at around 1.8%, down from about 2.7% a year earlier, then dipped in August to record lows around 0.5%.
April's Tally: Nasdaq, S&P 500, Dow Jones Stocks
The Dow Jones Industrial Average heads into the final session of April carrying a 3.3% gain for the month. The S&P 500 is up 6%. The Nasdaq has a 6.3% gain. The S&P 500 notched a record high close on Thursday. The Nasdaq briefly touched its first new high since Feb. 16.
Year to date, the S&P 500 has a 12.1% gain. The Dow industrials have advanced 11.3%. The Nasdaq Composite, still playing catch-up, has climbed 8.5% since Dec. 31.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Small caps lagged in April, with the Russell 2000 ahead 3.3%. The year is a different story. The Russell 2000 has a 16.3% gain since the start of the year, far outpacing blue chips and the big tech stocks.
Growth stocks have been a big winner in April. The Innovator IBD 50 ETF (FFTY) has rallied 7.6% so far for the month, after taking a big dive in March. The fund had a year-to-date gain of 15% at the end of Thursday's session.
The Nasdaq-tracking Invesco QQQ Trust (QQQ) continues to trade sideways, in a buy range above a 338.29 buy point. The leveraged ProShares Ultra QQQ (QLD), an IBD SwingTrader stock, remains in its buy zone, above an aggressive entry at 131.76.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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