Stock futures stuck to their early losses heading into Friday's open, threatening to whittle the week's strong gains as investors took profits following the biggest month for the Dow industrials in more than three decades. Disappointing earnings, and new concerns for U.S./China trade friction pressured early trade. Gilead Sciences and Amazon tumbled on earnings. On the Dow Jones today, Apple fell hard after its fiscal second-quarter report. Boeing gained after securing a favorable debt deal.
XDow Jones futures slunk 1.7% below fair value. S&P 500 futures were off 1.9%. Nasdaq 100 futures trimmed losses to 2.1% on the stock market today, even as trillion-dollar names Amazon.com and Apple dragged on early trade.
Stock futures shifted lower after the Washington Post reported that President Donald Trump had fumed to aides in recent days about China, blaming the country for withholding information about the coronavirus outbreak, and has discussed dramatic trade measures that would probably lead to retaliation by Beijing.
Clorox (CLOX) and Boeing sat atop the S&P 500 list. Western Digital (WDC) took a deep dive to the bottom of both the S&P 500 and the Nasdaq 100. All three stocks moved on earnings.
Seattle Genetics (SGEN) rose 2.8% to lead the Nasdaq 100. The biotech's late Thursday report missed earnings and revenue targets, but Guggenheim Securities upgraded the stock to buy with a price target almost 28% above Thursday's closing price. Seattle shares are extended after clearing a double-bottom base in early April.
Amazon.com (AMZN) shed 4.8%, and Apple (AAPL) dropped 2.8%, after reporting results late Thursday.
Gear up for Friday's market action by reading IBD's Investing Action Plan.
Dow Jones Today: Apple Undercuts Buy Point
Chemicals maker Dow (Dow) toppled more than 4%, the biggest drop among Dow Jones industrials, after disappointing guidance. Dow cohorts Exxon Mobil (XOM) and Chevron (CVX) traded lower on the heels of their first-quarter reports.
Boeing (BA) posted the Dow's only early advance, up 1.2% after announcing a $25 billion debt deal at lower-than-expected rates.
Apple turned in a 4% earnings gain and a 1% rise in revenue, comfortably clearing analysts' pared expectations. Management withheld guidance due to pandemic-related uncertainties. Apple stock on Wednesday, broke out of a second-stage cup-with-handle base at a buy point of 288.35. Friday's early losses sent shares narrowly back below that buy point.
Coronavirus Stocks: Co-Diagnostics, Moderna Rally
Two other bright spots Friday were Covid-related. Biotech lab Co-Diagnostics (CODX) bolted 8% higher. The company reported that global field trials confirmed the accuracy of its Covid-19 test kits.
Combridge, Mass.-based biotech Moderna jetted 6% higher after announcing a 10-year deal with Switzerland-based Lonza to manufacture its Covid-19 vaccine, as well as other vaccine candidates. Moderna also announced, on Wednesday, it was preparing to begin a Phase 2 study of its coronavirus vaccine.
Moderna shares are extended, up more than 27% since clearing a cup base in mid-April.
Earnings News: Clorox, Gilead Sciences
Friday morning earnings were off to a slow roll. Early mover Clorox jumped 2.5% after reporting that pandemic-charged demand for cleaning supplies drove fiscal third-quarter earnings and revenue beyond expectations. Clorox stock ended Thursday not quite 7% below what IBD MarketSmith chart analysis reads as a 198.85 buy point in a cup-with-handle base.
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Reaction to reports from late Thursday was not positive. Western Digital dived 12% on an earnings miss. Zendesk (ZEN) dropped more than 7%. United Airlines (UAL) took a 5% loss, while Southwest Airlines (LUV) lost 2.9%.
Coronavirus stock Gilead Sciences (GILD) backed off more than 5%, as a handful of analysts downgraded the stock, despite a first-quarter revenue and earnings beat. Management estimated the company would spend up to $1 billion in making remdisivir available as a coronavirus treatment.
Amazon Earnings: Substantial Uncertainty
Amazon reported a 29% slip in earnings, to $5.01 per share, while revenue jumped 26% to $75.5 billion. Revenue topped expectations. Earnings came in well below analysts' estimates.
Company revenue guidance was a little soft, and management said the outlook was subject to "substantial uncertainty." Amazon stock broke out past a cup base buy point of 2,186.05 on April 14. Friday's premarket move left shares extended well above the top of that buy point's chase zone, which runs to 2,295.35.
Globlal Markets: Tokyo, London Slide
Stock exchanges in Shanghai, Hong Kong, Frankfurt and Paris are among those closed Friday for May Day holidays. Shanghai will remain closed Monday and Tuesday for the holiday.
In Tokyo, the Nikkei 225 skidded 2.8% lower, ending the week up 1.9% after ending April with a 6.8% increase. The Tokyo Stock Exchange will shut down for a holiday through Wednesday.
Stocks in London skidded lower following the Trump trade threat news. The FTSE 100 was down 1.9% near midday.
Coronavirus News: Testing Ticks Higher
The global cumulative total of coronavirus infections rose by more than 87,000 to 3.32 million. Almost 32% of those were so far reported to have recovered. A little more than 7% have died.
The European Economic Area's share of total infections continued to decrease, slipping below 34% early Friday, down from more than 44% at the start of April. In the U.S., the cumulative number approached 1.1 million, holding steady at about 33% of the global total. France, China and Peru all saw large increases in new cases. Russia reported nearly 8,000 new confirmed infections in the 24 hours leading to Friday morning.
The number of deaths worldwide dropped sharply, from more than 10,000 to 5,877 during the 24 hour period. Slightly less than 34% of those deaths occurred in EEA countries. More than 37% were in the U.S.
The U.S. reported almost 31,000 new cases — a 2.9% rise that marked a fourth-straight increase off an April 26 low. Active cases rose 2.8% to 878,843, indicating still rising pressure on health care systems and personnel.
The number of new tests administered held above 200,000, boosting the 10-day average for tests administered to more than 226,000 – marking a 10th straight increase in testing numbers.
Dow Jones Today: A Historic Month
The Dow Jones today launches into May, after a minor backtrack on Thursday left the index with an 11.1% gain for April. That is down from a 13% advance at the Dow's intraday high on Wednesday, but nevertheless leaves the index with its best month since January 1987. The S&P 500 ended the month up 12.7% -- also its best performance since January 1987.
The Nasdaq blasted ahead 15.5% for the month, beating its 15% advance from April 2001, and logging its best month since a 16.6% gain in June 2000.
Of course, the trick is, what comes next?
For the Dow industrials and the S&P 500, the January 1987 gain launched the final leg of a rally that carried the Dow 44.9% higher over the next eight months. The Nasdaq's 16.6% gain in June 2000 took place amid the chaotic topping action that preceded the stock market's dot-com crash. The index sawed back and forth for two more months, then veered into a deep, multi-year dive.
The best day-to-day guide is IBD's Big Picture, and the daily stock market status presented on Market Pulse, which has shown the stock market in a confirmed uptrend since April 2. The Nasdaq has been the rally's clear leader. But both the Dow and the S&P 500 have now strengthened to back above their 50-day moving averages.
It is a very short throw for the S&P 500 to test its 200-day moving average, as well as the 3,000 mark. The Dow has further to go, although it could potentially reach the 25,000 level if it logs a strong week next week.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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