Dow Jones futures were squarely lower late Monday, along with S&P 500 futures and Nasdaq futures, ahead of a busy week of key earnings results, amid crashing oil prices late Monday. Tech giants Advanced Micro Devices and Alphabet prepare to report their results late Tuesday. Meanwhile, the coronavirus stock market uptrend continued Monday with strong gains as the U.S. economy makes plans to reopen.
XEarnings season continues this week with highly anticipated results from tech giants Advanced Micro Devices (AMD) and Alphabet (GOOGL). Dow Jones stocks Caterpillar (CAT), Merck (MRK) and Pfizer (PFE) will report earnings ahead of the stock market open Tuesday. Meanwhile, Amazon (AMZN), Apple (AAPL), Microsoft (MSFT) and Tesla (TSLA) are set to report throughout the week. Tesla stock surged above a new buy point Monday, ending the session in buy range.
Dow Jones Futures: Plunging Oil Prices
Late Monday — at around 10 p.m. ET — Dow Jones futures were down 0.5%, while S&P 500 futures also slid 0.5%. Nasdaq 100 futures dropped 0.45% vs. fair value after Monday's stock market close. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Meanwhile, oil prices continued their wild swings on storage concerns. Late Monday, June West Texas Intermediate (WTI) oil futures plunged 14% to $11 a barrel. During Monday's normal trading session, WTI oil futures crashed nearly 25% to about $12.93 a barrel.
Among exchange traded funds, Innovator IBD 50 (FFTY) gained 1.7% Monday. The ETF of top growth stocks remains about 19% off its 52-week high.
The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF moved up 0.8% to close at 215.56. Meanwhile, the SPDR S&P 500 ETF (SPY) rose 1.4% to 287.05.
On Monday, the Dow Jones Industrial Average jumped more than 350 points, or 1.5%. The S&P 500 advanced 1.5%, while the Nasdaq followed up with a gain of 1.1%.
Within the current stock market rally, the tech-heavy Nasdaq is down just 2.7% year-to-date through Monday's close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 10.9% and 15.5%, respectively, through April 27.
Coronavirus News: U.S. Covid-19 Cases Top 1 Million
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases rose above one million late Monday. Despite the rising total, the daily number of new cases remains steady amid the increase in testing.
Confirmed Covid-19 cases worldwide climbed above 3 million, with more than 210,000 virus-related deaths. With the daily number of new cases slowing, investors are turning attention to the economic impact of the coronavirus outbreak and the possibility of the country reopening for business.
On Sunday, New York Gov. Andrew Cuomo said the state plans to reopen in phases, with upstate New York leading the state's reopening as soon as May 15. The first phase will be construction and manufacturing workforces. Other states, like Colorado, Georgia, Florida and Texas, have already started to slowly reopen their economies. On Monday, Texas Gov. Greg Abbott said he will let the state's stay-at-home order expire on April 30, paving the way for restaurants to open with some restrictions.
Coronavirus Stock Market Rally
According to IBD's The Big Picture, the stock market continues to strengthen after hitting lows over a month ago on March 23. The major stock indexes confirmed a new uptrend on April 2. According to Monday's Big Picture, "After going weeks with a shortage of breakouts, the market is now furnishing plenty. About two dozen stocks with Composite Ratings of 90 or better topped buy points. But nearly all of them showed light volume."
Stocks to watch include the top stocks on IBD Long-Term Leaders. The IBD Long-Term Leaders list focuses on companies with stable earnings growth and price performance.
Coronavirus Stock Market ETF Strategy And How To Invest In The New Uptrend
AMD Earnings
Chip giant Advanced Micro Devices will report late Tuesday. Analysts expect AMD to earn of 18 cents a share, up 200% year over year, on sales of $1.78 billion, up 40%.
The chip leader is shaping a cup with handle with a 58.73 buy point. Shares are just 4% away from the correct buy point ahead of earnings.
Alphabet Earnings
Tech giant Alphabet will also report after the close Tuesday. According to the IBD Investing Action Plan, the Google owner is expected to earn $10.97 per share, down 7.8%, as net revenue rises 12% to $33.06 billion.
Alphabet stock continues to shape a cup base with a 1,530.84 buy point. Be on the lookout for a potential handle to offer a more risk-optimal buy point.
Amazon Earnings
Top coronavirus stock Amazon will report after the stock market close Thursday. Earnings are expected to fall 11% to $6.34 per share on revenue of $72.87 billion.
On Monday, the e-commerce giant received two price-target hikes from analysts, propelling shares as much as 1.4% higher. But the stock reversed lower to fall 1.4%.
Amazon stock ended the session about 9% above a 2,186.05 buy point in a cup base after a breakout on April 14. Amazon is an IBD Leaderboard stock idea.
Dow Jones Leaders: Apple, Microsoft
Dow Jones leader Apple is just 2% away from a 288.35 buy point in a cup with handle. Apple shares inched 0.1% higher Monday after the Wall Street Journal reported that Apple is pushing back the production ramp-up of this year's iPhones by one month.
The iPhone maker will report earnings after the stock market close Thursday. Wall Street sees EPS down 7% to $2.28 as sales slip 6% to $54.79 billion. Apple pulled its guidance for the quarter on Feb. 17 because of production and sales disruptions from the Covid-19 pandemic.
According to IBD Stock Checkup, Apple stock has a 95 out of a best-possible 99 IBD Composite Rating, placing it in the upper tier of growth stocks. The Composite Rating is designed to help investors gauge the quality of a stock's fundamental and technical metrics.
Meanwhile, Microsoft stock briefly reclaimed a double bottom's 175.10 buy point Monday before turning lower. Shares are just below the entry ahead of Wednesday's earnings results. The software giant broke out on April 16 before giving up the entry on April 20. But from another perspective, the stock is forming a cup-with-handle base with a 180.10 buy point.
The Street expects fiscal Q3 EPS to rise 12% to $1.28, on sales of $33.93 billion, up 11%. Analysts will be looking for continued momentum in Microsoft's cloud-computing businesses, including Azure and Office.
Microsoft is an IBD Long-Term Leader.
Tesla Stock Breaks Out, But Falls Late On News
Tesla stock surged past a new 775.05 buy point Monday — according to MarketSmith chart analysis — after the company asked dozens of employees to return to work this week in order to resume production at its Fremont, Calif., car plant. Shares advanced more than 10% to close at 798.75. The 5% buy zone tops out at 824.36, so shares are squarely in buy range.
Late Monday, Tesla canceled plans to bring workers back to its Fremont plant, according to CNBC. Shares fell about 2% in response, to about 783.
The stock leader is a new IBD Leaderboard member. According to Leaderboard commentary, "The extremely deep correction within the current base poses as a key risk. In most cases, a cup with handle shows a decline of no more than 33% to 35%. In Tesla's case, however, the stock had an unusually big run after breaking out at 361.30."
Tesla Earnings
The innovative electric-auto maker will report earnings after the close on Wednesday. For the first quarter, the Street expects per-share losses to narrow to 26 cents from $2.90 a year ago as revenue jumps 36% to $6.16 billion.
In early April, Tesla reported better-than-expected vehicle deliveries, delivering 88,400 vehicles in the first quarter, topping estimates of about 80,000. At the start of 2020, Tesla estimated to deliver more than 500,000 cars in 2020, but the company has since suspended production. Analysts have since adjusted that downward to about 420,000.
Dow Jones Stocks: Caterpillar, Merck, Pfizer
Among the Dow Jones stocks, Caterpillar, Merck and Pfizer are all set to report earnings ahead of the stock market open Tuesday.
Caterpillar is expected to earn $1.69 a share on revenue of $11.08 billion, according to IBD data. Shares are about 24% off their 52-week high.
Drug giants Merck and Pfizer will report early Tuesday. Merck ended Monday's session just below a cup with handle's 84.26 buy point. The drugmaker is expected to earn $1.34 per share on sales of $11.47 billion.
Pfizer continues to move up the right side of a new cup base with a 41.07 buy point amid a sharp recovery in recent weeks. Pfizer's EPS is expected to measure 70 cents on revenue of $11.17 billion.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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