S&P 500 Futures Tumble As Sell-Off Continues; Broadcom Seen Hiking Qualcomm Bid | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Dow industrials and Nasdaq 100 retreated Sunday night, suggesting selling pressure will carry over to Monday. Broadcom (AVGO) is poised to raise its bid for fellow Apple (AAPL) iPhone chip supplier Qualcomm (QCOM) to $120 billion, Reuters reported.

X Stocks sold off Friday, led by Apple, Alphabet (GOOGL) and Chevron (CVX). That capped the worst weekly losses in two years for the S&P 500 index, Nasdaq composite and Dow Jones industrial average.

After Thursday’s wild action, IBD changed its market outlook to uptrend under pressure for the first time since mid-August.

S&P 500 index futures fell 0.6% vs. fair value in heavy trading. Nasdaq 100 futures slid 0.3%. Dow futures lost 0.7% against fair value, or about 175 points.But those were off session lows: Dow futures were down about 300 points vs. fair value at one point. Asian markets were down hard in Monday intraday trade.

In this environment, you should be cautious about making ne4 purchases. Instead, consider taking at least partial profits in winning stocks and quick to cut losses short. And you should be close attention to the action of the major averages and leading stocks.

Last week was the first weekly loss in 2018 for the major averages. Was that just a blip or something more serious? The stock market has risen solidly for several months, with only minor pullbacks. You could argue that the market is “due” for a correction, but that doesn’t mean it has to be now.

IBD’S TAKE:As an investor, don’t try to guess what the market is going to do. Instead, listen to what the market is saying right now by following the major averages and leading stocks. Read IBD’s The Big Picture every market day.

Stocks that have not been true leaders, such as Apple, are being exposed. Others, like Alibaba (BABA) and Chevron, that had recently looked strong, have tumbled below buy points. A few, like Amazon (AMZN), have kept rallying to new highs.


Broadcom’s expected $120 billion bid would raise its per-share offer to $80-$82, Reuters said, up from the current $70 a share. Broadcom aims to push Qualcomm to negotiate. It’s mounting an effort to replace the entire board of Qualcomm at the latter’s March 9 shareholder meeting.

Broadcom also plans to offer a higher breakup fee in the event that regulators block a deal.

Broadcom last week reported strong preliminary revenue earnings and upbeat sales guidance, giving the stock a brief lift on Wednesday. But shares fell back to their lowest levels since late September on Friday, as iPhone chipmakers fell on Apple’s weak handset sales and current-quarter guidance, as well a big iPhone chip contract win for Qorvo (QRVO) at the expense of Broadcom didn’t help.

Qualcomm topped fiscal Q1 earnings views but gave weak guidance. The chipmaker, which faces regulatory fines and curbs over its royalty and licensing terms around the world, has a related dispute with Apple. Qualcomm also is trying to close a $47 billion takeover of NXP Semiconductors (NXPI). But it’s struggled to do so as top NXP Semi investors want a higher price.

Qualcomm stock, which skyrocketed in November on the initial $103 billion takeover bid from Broadcom, closed below its 50-day line on Friday at 66.07.

You can view Qualcomm as being in a flat base or in a huge cup-with-handle pattern going back to late 2016. Either way, the buy point is 69.38.

Bristol-Myers Squibb

Bristol-Myers Squibb reports fourth-quarter earnings early Monday. Analysts polled by Zacks Investment Research had called for adjusted profit of 67 cents and revenue of $5.306 billion. A year earlier, Bristol-Myers earned 63 cents a share on sales of $5.243 billion.

Bristol-Myers has a lot of hopes and some disappointments with immuno-oncology drug Opdivo. Rivals incude Merck (MRK), via Keytruda, and AstraZeneca (AZN) and ierts Imfinzi.

Merck and AstraZeneca both reported fourth-quarter earnings on Friday. Shares fell 2.2% as Merck sales came in light. AstraZeneca rose 2.2% to 35.90, back above a 35.70 buy point.

Bristol-Myers shares closed Friday at 63.48, within a flat base with a 66.20 buy point. The relative strength line, which tracks a stock’s performance vs. the S&P 500 index, has been lagging for several months, and really since mid-2016.


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Originally posted 2018-02-05 09:45:34.


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