Dow Jones Futures: Xilinx Stock, These Chip Stocks Are Bullish For Stock Market Rally

Dow Jones futures were little changed late Wednesday, along with S&P 500 futures and Nasdaq futures, after chip stocks Xilinx (XLNX), Lam Research (LRCX) and Texas Instruments (TXN) reported earnings late. Top-rated Xilinx stock soared, signaling a breakout, while Lam Research stock and Texas Instruments stock also rose. But those results also lifted other chip stocks, including Intel (INTC), Advanced Micro Devices (AMD), Applied Materials (AMAT) and Nvidia (NVDA) — ahead of Intel earnings Thursday night. That’s a good sign for the stock market rally, as semiconductors usually participate in successful uptrends.


Dow Jones Futures Today

Dow Jones futures edged below fair value. S&P 500 futures were down nearly 0.1%. Nasdaq 100 futures climbed 0.1%, with Nasdaq-listed big caps Lam Research, TI and Intel stock providing support. Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular stock market session.

Stock Market Rally Update

The stock market opened higher Wednesday, rebounding from Tuesday’s sell-off. The Dow Jones led the way, fueled by earnings-related gains in IBM (IBM), Procter & Gamble (PG) and United Technologies (UTX). But the major averages soon lost steam, all testing their 50-day moving averages again. But bulls regained control late in the day, with the Dow Jones closing up 0.7%, the S&P 500 index 0.2% and the Nasdaq composite 0.1%.

Xilinx Earnings Crush Views; Xilinx Stock Signals Breakout

Xilinx earnings soared 42% in the fiscal third quarter. Revenue leapt 34%, the fourth straight quarter of accelerating growth. The chipmaker also gave upbeat Q4 revenue guidance. Xilinx stock, a member of the IBD 50 and on the Leaderboard watch list, shot up 10% to 98.50 in late trading. That suggests Xilinx stock will clear a 95.28 cup base buy point at Thursday’s stock market open.

Texas Instruments Earnings, Lam Research Earnings

Texas Instruments earnings topped Q4 views, though the diversified chipmaker fell short on sales and gave mixed guidance. Lam Research earnings and sales beat fiscal Q2 estimates, while the chip gear giant also announced a $5 billion stock buyback. Texas Instruments stock rose 1.1% and Lam Research stock jumped 6.4%, though both are well off highs and possible buy points.

But the trio of chipmaker reports buoyed other semiconductors late. Intel stock rose 1.4%, AMD stock 0.9%, Nvidia stock 1.8% and equipment maker Applied Materials stock 3.7%.

Why Chip Stocks Matter To The Stock Market Rally

Semiconductors were stock market laggards in 2018, especially over the summer. That was a warning sign in what turned out to be a down year for Wall Street. Chip names often lead and almost always participate in a stock market rally.

Chip stocks collectively have a hefty market capitalization, especially in technology, So if chips are rolling, that’ll have a notable market impact. Further, semiconductors are in virtually every tech product, from the Apple (AAPL) iPhone to data centers, not to mention everything from your car to your home appliances. If chip stocks aren’t doing well, that could be a bad sign for their corporate customers. Notably, Apple chipmakers largely slumped in 2018, even as Apple stock hit record highs. Ultimately, Apple issued a pair of warnings that have pummeled the tech titan.

To stress once again, overnight action may not translate into daytime stock action. Intel earnings and guidance will be key for the chip sector as well.


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Originally posted 2019-09-19 23:31:44.


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