Dow Jones futures rose modestly late Wednesday along with S&P 500 futures and Nasdaq futures with Snowflake stock and other software earnings in focus overnight. The stock market rally suffered a bearish reversal Wednesday after the CDC confirmed the first U.S. case of the omicron Covid variant, in California.
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The major indexes opened by bouncing above or from key levels, only to break moving averages on the downside. Decliners beat advancers easily after a promising start for market breadth.
Bottom line: The stock market rally is under increasing pressure. Investors should take a more defensive stance.
Megacap techs Apple (AAPL), Microsoft (MSFT) and Google parent Alphabet (GOOGL) led the morning rally, but even they gave up gains to close fractionally lower. Chipmakers started strong with Ambarella (AMBA) skyrocketing on earnings. But several breakouts faltered with the afternoon sell-off.
Meanwhile, ugly action continued for software stocks. Salesforce.com (CRM) dived on weak forecasts. Zscaler (ZS), the clear cybersecurity leader in recent weeks, reversed lower despite strong results and guidance.
After the close, several software makers released earnings, including Snowflake (SNOW), CrowdStrike (CRWD), Okta (OKTA), Synopsys (SNPS) and Veeva Systems (VEEV). Chipmaker Semtech (SMTC) and teen-focused discounter Five Below (FIVE) also reported.
SNOW stock jumped overnight after Snowflake reported revenue and guidance. CRWD stock and Okta rose modestly on strong earnings and guidance. But all three software stocks had tumbled in recent days and weeks. Veeva stock retreated following results, after selling off in recent weeks.
SNPS stock was little changed after strong earnings and guidance, but in-line revenue. Synopsys stock fell 1.4% in Wednesday’s session, just below a buy point. FIVE stock rebounded overnight on earnings, but after tumbling below its 50-day and 200-day line. SMTC stock edged higher after narrowly topping views and guiding in-line.
Microsoft and Google stock are on IBD Leaderboard. NXPI stock is on SwingTrader. Microsoft stock, Google and Synopsys are on IBD Long-Term Leaders. Google, Microsoft and ZS stock are on IBD 50. UCTT stock was Wednesday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures climbed 0.4% vs. fair value. S&P 500 futures rose 0.35% and Nasdaq 100 futures advanced 0.4%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Omicron Variant Case In U.S.
While it’s no surprise, the omicron Covid variant has reached the U.S. The CDC announced that an omicron case in California has been found. The patient returned on Nov. 22 from South Africa, where the omicron variant was first detected, and tested positive on Nov. 29. The World Health Organization said on Wednesday that omicron has been reported…
Read More: Dow Jones Futures: Market Rally Suffers Bearish Reversal On U.S.