Stock Futures Climb; Chip Stocks Lead Nasdaq, S&P 500, Dow Jones - Investor's Business Daily

Stock futures hustled to early gains Wednesday, with chip stocks leading, while some top trade-sensitive Dow Jones stocks lagged.

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Nasdaq 100 futures led the early gains, swinging 0.6% above fair value. Dow futures and S&P 500 futures hammered out advances of 0.4% apiece. (For updates on this story and other market coverage, visit the Stock Market Today.)

Chip stocks shifted firmly higher, with ST Microelectronics (STM) scoring a big premarket move, and Advanced Micro Devices (AMD) and Cypress Semiconductor (CY) poised for possible breakouts. Intel (INTC) climbed more than 1% to lead the Dow Jones industrials.

Caterpillar (CAT) and Boeing (BA) dropped to the bottom of the Dow.

Amazon.com (AMZN) and Intel were both rising within buy ranges. Micron Technologies (MU) led the Nasdaq 100. AMD topped the S&P 500. Dave & Buster's Entertainment (DAVE) soared after reporting fourth-quarter results late Tuesday. Boot Barn Holdings (BOOT) appeared set to retake a buy point, lodging a 5% surge in premarket trade.

Dow Jones, S&P 500 Near Fresh Highs

The Dow Jones Industrial Average ended Tuesday's session 2.9% below its October high, holding firmly above the 26,000 level. The S&P 500 is 2.5% below its peak from September, maintaining support above the 2,800 mark. The Nasdaq is 3.6% off its August high. All of the index's 2018 peaks occurred in concert with tariff- or sanction-related policy announcements.

For more detailed analysis of the current stock market and its confirmed uptrend, study the Big Picture.

Chip Stocks: Intel, Advanced Micro Get Buy Ratings

Chip stock Intel jumped 1.3% ahead of the open, after Nomura initiated coverage on the stock with a buy rating. The note placed a price target for the stock at 65, almost 20% above Tuesday's closing price.

Intel remains in a buy range, after topping a 54.20 buy point in a cup-with-handle base in mid-March. Shares remain in buy range through 56.91.

Advanced Micro Devices sparked 4.5% higher. Nomura also initiated coverage on the stock with a buy rating and a 33 price target. AMD stock ended Tuesday 5% below a potential buy point at 28.21, in a possible six-month cup-with-handle base. The base is 53% deep, which adds some risk to any potential breakout.

Stock Futures: Amazon, Netflix Advance

Amazon.com paced the FANG stock tech leaders in early action with a 0.8% gain. The IBD Leaderboard stock ended Tuesday at the very top of a buy range above a 1,736.51 buy point. The buy range runs through 1823.33.

Netflix climbed 0.7%, possibly receiving a boost from Tuesday's news that the Justice Department had warned the Academy of Motion Picture Arts and Sciences that barring content from streaming services such as Netflix could violate antitrust laws.

Netflix, an IBD Leaderboard watch list stock, ended Tuesday 1% below a 371.59 buy point in a cup-with-handle base.

Hiring Slows, Mortgage Action Surges

U.S. non-farm private sector employers added 129,000 workers in March, according to ADP's National Employment Report. That was down from 183,000 new hires in February, and well below forecasts for a decrease to 165,000 new jobs. Service sector employers added 135,000 new workers, while employment among goods producers decreased by 6,000. Education and health posted the largest increase: 56,000 new jobs.

Mortgage application activity spiked for a second straight week as mortgage rates posted their biggest one-week drop in a decade, according to the Mortgage Bankers Association. Mortgage application volume swelled 18.6% vs. the prior week and was up 28% over year-ago levels. Refinance applications soared 39% week-over-week, and 58% above year-ago activity.

Mortgage-related ETFs VanEck Vectors Mortgage REIT Income (MORT) and UBS ETRACS Monthly Pay 2xLeveraged Mortgage REIT (MORL) were unchanged in premarket trade.

Researcher Markit is scheduled to release its March services sector purchasing managers index at 9:45 a.m. ET. The Institute for Supply Management's non-manufacturing index is due out at 10 a.m. ET.

U.S.-China Trade War Final Push?

Chinese Vice Premier Liu He meets with Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in Washington, D.C., today, as negotiations push to close what appear to be last-mile gaps in a restructured U.S.-China trade relationship.

Trade optimism sent China's markets higher, with both the Shanghai Composite and Hong Kong's Hang Seng Index taking better-than 1% gains. Japan followed suit, with Tokyo's Nikkei 225 jumping 1%.

China-facing ETFs traded generally higher on U.S. markets. The Direxion Daily CSI 300 China A Share Bull 2X (CHAU) and Direxion Daily FTSE China Bull 3X (YINN) each swept 3.1% higher in premarket trade. The iShares MSCI China (MCHI) was unchanged.

Prime Minister Shakes Up Brexit Talks

Prime Minister Theresa May abandoned her effort to muster support for her existing Brexit proposal, offering to compromise with opposition Labour leaders and to implement any deal that was agreed to by a majority of lawmakers. The shift in stance points to a much "softer" Brexit plan than had been favored by May's Conservative party, and points to a less severe change than many Brexiteers had hoped for in the U.K.'s relationship to the European Union.

May plans to request a short delay to the U.K.'s already extended deadline for exit from the trade bloc, currently set for April 12. Europe's markets were mixed on May's strategy, with London's FTSE 100 trading a fraction in the red near midday. Frankfurt's DAX sprung 1% higher and the CAC-40 in Paris gained 0.6%.

Boot Barn Set To Stomp Buy Point

Boot Barn saddled up to retake a buy point, and gained nearly 5% ahead of the open. The stock blew past a 29.88 flat base buy point in weak trade Monday. It reversed back below the entry during Tuesday's session. The buy range runs through 31.37. It's important to remember that not all premarket moves carry over into regular trade.

According to IBD Stock Checkup, the footwear chain has a very strong 96 IBD Composite Rating. The Composite Rating is a blend of key fundamental and technical metrics to help investors gauge the strengths of a company's stock.

Oil Prices Inch Up Ahead Of Data

Oil prices chalked up narrow gains ahead of Energy Information Administration weekly supplies data due out at 10:30 a.m. ET. West Texas Intermediate crept a fraction higher to $62.62 a barrel. Brent crude gained 0.4% to $69.64. WTI is at its highest level since the first week of November.

Oil-focused ETFs Citigroup Global Markets VelocityShares 3x Long (UWT) was down 0.1%, the United States Oil Fund (USO) added 0.2%, in early trade.

Follow Alan R. Elliott on Twitter @IBD_Aelliott

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2019-04-03 13:05:56Z
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