Tech stocks were set for what could be a breakout bonanza Friday, spearheaded by Amazon.com (AMZN), Microsoft (MSFT) and Intel (INTC). Overall, futures traded in mixed territory after first-quarter GDP data was better-than-expected, while quarterly reports from blue chip energy stocks delivered some disappointments.
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Nasdaq 100 futures strengthened to 0.5% above fair value, although futures had backed well away from gains posted in extended trade after Thursday’s close. Futures for the Dow Jones industrial average slipped 0.2%. S&P 500 futures traded a fraction below fair value.
Exxon Mobil (XOM) and Chevron (CVX) exerted downward force on both the Dow industrials and the S&P 500, slipping 2% after reporting first-quarter results.
A big, 1.6% rebound for the Nasdaq on Thursday narrowed the index’s loss for the week to 0.4%. The Dow Jones industrials index hauls a 0.6% loss into Friday’s session, while the S&P 500 holds a slim 0.1% loss for the week. All three indexes are about 1 % below their 50-day moving averages.
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The Nasdaq 100 outpaced Thursday’s action by a wide margin, surging 2.1% as Facebook (FB), Amazon, Netflix (NFLX) and Alphabet (GOOGL) all scored big gains. That left the index down 0.3% for the week through Thursday, after diving as much as 3.3% to a mid-session low on Wednesday.
The message — it’s a volatile market — is reflected in IBD’s current Market Pulse market status indicator.
GDP Slows, But Above Forecasts; Inflation In Check
Preliminary first-quarter GDP growth estimates from the Commerce Department were positive, with growth of 2.3% coming in below the fourth-quarter’s 2.9% advance, but outpacing economist projections for a slowdown to 2% growth. The closely-watched price inflation number was also better-than-expected, with the GDP Price Index up 2%, below Q4’s 2.3% increase and countering expectations for an uptick to 2.4% growth.
Consumer spending met expectations for a 1.1% increase, although well below the prior quarters 4% surge.
Amazon, Intel Poised For Breakouts; Microsoft Gets Upgrade, Target Hike
Leading tech names Expedia (EXPE), Amazon, and Intel reported quarterly results late Thursday.
Expedia spiked 10.7% after reporting a narrower-than-expected first-quarter loss late Thursday, and a 15% rise in bookings, to $27.2 billion.
Amazon hurtled ahead 7%. The e-commerce giant’s first-quarter revenue topped analyst expectations, whereas earnings cleared targets by nearly 77%. The company also announced plans to raise the price of its Prime membership to $119, from $99. Chief Executive Jeff Bezos reported last week that Prime members numbered more than 100 million, worldwide. Amazon’s premarket advance set the IBD Leaderboard stock for a starting bell breakout above a 1617.64 buy point in a six-week cup base. There is also an earlier, alternate entry at 1568.62. The base is a very late-stage pattern. Premarket moves often do not carry over into regular trade.
Intel stormed ahead 5.3%, seizing an easy early lead among Dow Jones stocks. A strong first-quarter profit and sales beat, and raised full-year guidance helped dissuade concerns lingering over security weaknesses discovered in its chips early in the year. Intel’s premarket gain positioned the stock for a gap-up breakout at the open above a 53.88 buy point in a flat base. Premarket moves often do not carry over into regular trade.
Microsoft (MSFT) popped 3.6% higher, as JPMorgan upgraded the stock to overweight, from neutral, and boosted its price target to 110, from 94, after the company’s strong fiscal third-quarter report late Thursday. The stock ended Thursday 3.3% below a 97.24 buy point in a flat base.
IBD 50 listing SVB Financial Group (SIVB) rattled off a 5% premarket gain following a solid Q1 report late Thursday. The stock finished Thursday less than 6% below a 271.89 buy point in a cup base.
Exxon, Chevron Report Mixed Results
Exxon shares fell nearly 4% after reporting first-quarter earnigns stopped one penny short of analyst targets. Chevron was up 0.8% just ahead of the open, after its first quarter earnigns topped expectations by a wide margin, but revenue growth disappointed.
Phillips 66 (PSX) and Cabot Oil & Gas (COG) also reported, with TransCanada (TRP) set to report.ConocoPhillips (COP) set expectations for other oil producers high, after crushing first-quarter performance expectations in its report on Thursday.
Crude oil prices traded down 0.2% early Friday, with U.S. benchmark crude just above $68 — down 0.5% for the week, but above 6% higher vs. the March 29 settlement. Baker Hughes (BHGE) delivers its weekly rig count report at 1 p.m. ET.
The University of Michigan reports its April consumer sentiment estimates at 10 a.m. ET.
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