Salesforce Hits Buy; Micron, Intel Back Chip Stocks

Dow Jones futures rose overnight, along with S&P 500 futures and Nasdaq futures. (CRM) jumped on strong earnings released late Tuesday, signaling a move back above a buy point at Wenesday’s open. Meanwhile, even as the Dow Jones, S&P 500 index and Nasdaq composite suffered significant losses Tuesday, the critical semiconductor sector held up well. Micron Technology (MU) rallied, briefly breaking out past a buy point. Intel (INTC) and Nvidia (NVDA) barely fell, holding solidly in buy range.


Dow Jones Futures Today

Dow Jones futures climbed 0.35% vs. fair value. S&P 500 futures and Nasdaq 100 futures rose 0.2%.

Salesforce earnings rose 85% per share vs. a year earlier, much better than expected. Revenue grew 25% to $3.01 billion. Salesforce stock rose 4.7% late to 132.80. That signals a move back above a 128.97 flat-base buy point initially cleared on May 10.

Dow Jones Led Tuesday Sell-Off

With tumbling bond yields and other bad news slamming bank stocks, falling crude prices hitting energy stocks and Disney (DIS) facing a pair of negative headlines, it’s no wonder that the Dow Jones fell hardest Tuesday, losing 1.6%. The Dow Jones also undercut its 50-day moving average slightly. The S&P 500 index lost 1.2%, while the Nasdaq composite slipped just 0.5%.

Micron, Intel, Nvidia Are Chip Standouts

Micron Technology was the clear sector standout, rising 2.1% to 62.62. Intraday, Micron stock hit 63.98, clearing a 63.52 cup-base buy point. Shares have skyrocketed 36% so far in May. The month has included a 15% spike last week on raised guidance, a $10 billion stock buyback and the release of a flash memory chip with Intel. Micron’s relative strength line, which tracks a stock’s performance vs. the S&P 500 index, hit a new high.

Intel dipped 0.2% to 55.32, but the world’s largest chipmaker is still holding above a flat-base entry of 53.88. Intel’s chart is extremely messy, which is not great news. But its RS line continues to march higher, hitting a new peak Tuesday.

Nvidia slid 0.3% to 248.59, comfortably above a 239.35 buy point from a shallow double-bottom base.

Why Chips Matter

Semiconductors are a key part of the major stock market indexes, especially the Nasdaq composite. But chips are in so many products, from new cars to the Apple (AAPL) iPhone. If chip stocks and chipmakers are faring well, that’s a good sign for other tech sectors.

Bottom line: It’s very hard for the stock market to have a sustained advance without the active participation of the chip sector.


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Originally posted 2019-09-19 23:15:15.


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