Pinterest Stock, Nvidia Stock, Applied Materials Stock Are Big Earnings Movers As Stock Market Rally Gains Steam| Investor’s Business Daily

Dow Jones futures rose slightly late Thursday, along with S&P 500 futures and Nasdaq futures. The stock market rally continued for a third straight day, with the Nasdaq and S&P 500 index clearing a key level and growth stocks leading. Apple stock lagged, though. After the close, new IPO Pinterest (PINS), chip names Nvidia (NVDA) and Applied Materials (AMAT) and Chinese search giant Baidu (BIDU) reported earnings. Pinterest stock and Baidu stock sold off late while Nvidia stock and Applied Materials stock rose.


Dow Jones Futures Today

Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures were 0.1% above fair value. Nasdaq 100 futures climbed 0.2%. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Current Stock Market Rally Attempt

The current stock market rally attempt continued for a third straight session, with strong earnings from Dow Jones stocks Walmart (WMT) and Cisco Systems (CSCO) fueling gains. The major averages did close well off session highs. But the Nasdaq composite, S&P 500 index and small-cap Russell 2000 reclaimed their 50-day moving averages.

Just as impressive, growth stocks outperformed. Zscaler (ZS) hit a record high, Visa (V) continued a bullish rebound from its 50-day line while some new IPOs such as Zoom Video (ZM) are powering higher.

Apple Stock, Huawei Suppliers Hit

The iPhone maker hit resistance at its 200-day moving average and reversed lower, with Apple stock closing down 0.4% to 190.08. Apple stock had sold off sharply in the recent pullback, falling below its buy point, ultimately invalidating that entry. Thursday’s weak action just underscores how Apple stock has not been an elite stock in 2019.

Several top chipmakers and optical components makers retreated Thursday after President Donald Trump moved to limit Chinese firm Huawei Technologies’ access to U.S. technology. Xilinx (XLNX) fell 7.3%, Inphi (IPHI) 13% and Acacia Communications (ACIA) 5.8%.

Top ETFs

Among the best ETFs, the Innovator IBD Breakout Opportunities (BOUT) rose 1.2%, hitting its best level since last October. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 2%. The VanEck Vectors Semiconductor ETF (SMH) fell 1.4% reflecting weakness in Xilinx suppliers and other Huawei chip suppliers. SMH rose overnight on after-hours earnings gains from Applied Materials and Nvidia stock.

Pinterest Earnings

The Pinterest earnings report disappointed. Pinterest lost 32 cents per share adjusted in the first quarter, missing views for an 11-cent loss. Revenue ran up 54% to $201.9 million, just above estimates.

Pinterest revenue guidance also was a little light.

Pinterest stock tumbled 16% in late trade. Shares had jumped 7.8% to 30.86 in Thursday’s session. The Pinterest IPO priced at 19 a share a month ago and ran up to 35.29 on April 30.

Pinterest stock had set up in an IPO base with a 35.39 buy point.

Investors had no business buying Pinterest stock before earnings. Pinterest was not in a buy zone, it’s highly risky to buy before earnings and the stock market is still in a correction.

Nvidia Earnings

Nvidia earnings tumbled 57% to 88 cents a share while revenue sank 24% to $2.22 billion. Analysts expected Nvidia earnings of 82 cents a share with sales down to $2.25 billion.

Nvidia revenue guidance for the current quarter tilted slightly above analyst views. But Nvidia also made some cautious comments.

Nvidia stock rose 1.6% late after initially jumping 7%. Shares closed up 0.4% to 160.19. Nvidia stock has slumped in the past month after a modest recovery since Christmas. But the graphics and AI chipmaker is still well off its Oct. 2 peak of 292.76 amid multiple warnings about weaker demand.

Applied Materials Earnings

Applied Materials earnings fell 43% to 70 cents a share as sales retreated nearly 23% to $3.54 billion. Analysts expected Applied Materials earnings of 66 cents a share on sales of $3.48 billion.

The chip-gear giant’s earnings guidance for the current Q3 was generally above views.

Applied Materials stock popped 6% late. Shares rose 0.4% to 41.66 in Thursday’s session, holding above the 50-day line after retaking that level on Wednesday and finding support at their 200-day on Monday. Applied Materials stock has modestly outperformed the broader market since Christmas, but is still well off its March 2018 peak of 62.40.

Baidu Earnings

Baidu earnings plunged 80% to 41 cents a share, missing Q1 views by a penny. Revenue grew 8% to $3.59 billion. The Chinese search giant gave weak guidance for the current quarter.

Despite a new $1 billion stock buyback program, Baidu stock crashed 10% late. That signals a move to its worst level since 2015. The relative strength line for Baidu stock was already at a nine-year low.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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