Dow Jones futures rose slightly early Thursday, along with S&P 500 futures and Nasdaq futures. The stock market rally closed mixed Wednesday, weakening in the final hour as the Biden administration backed removing patent protection for coronavirus vaccines, hitting Pfizer (PFE) while slamming BioNTech (BNTX) and Moderna (MRNA).
XBut a number of energy- and commodity-related names broke out or flashed other buy points, including Matador Resources, Rio Tinto and Dow Jones components Chevron (CVX) and Caterpillar (CAT). Goldman Sachs (GS), yet another Dow components, also cleared a buy point.
Several oil & gas plays EQT Corp. (EQT), Cimarex Energy (XEC), Callon Petroleum (CPE), Marathon Oil (MRO) reported earnings late Wednesday. So did fertilizer maker CF Industries (CF), insecticide and herbicide specialist FMC Corp. (FMC) and crane maker Manitowoc (MTW). All closed near buy points.
Meanwhile, PayPal (PYPL), Apple (AAPL) and 5G chipmaker Qorvo (QRVO), 10X Genomics (TXG), HubSpot (HUBS) also reported late Wednesday. These are tech, medical or other growth names that are trying to hold on but coming under various levels of pressure.
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Among oil and gas producers, Matador stock and Cimarex Energy broke out of bases Wednesday. Pioneer Natural Resources (PXD), Devon Energy (DVN) and Chevron stock all cleared early entries, breaking down trendlines and moving above pseudo-handles. Matador, Chevron, Pioneer and Devon stock all reported over the past week, with Cimarex earnings late Wednesday.
Among miners, Rio stock and Teck Resources (TECK) broke out, while BHP Group (BHP) broke a downtrend and pseudo-handle.
Caterpillar stock cleared a flat base after several weeks of tight action and a quick test of its 50-day line, according to MarketSmith analysis, closing exactly on the 237.88 buy point.
Goldman stock also peeked out past a base, either a flat pattern or shallow cup pattern.
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Old Economy Earnings Overnight
Cimarex earnings missed while revenue fell short. XEC stock fell solidly in extended trade. Cimarex popped 4.8% on Wednesday, clearing a 69.45 buy point.
Callon Petroleum earnings and revenue beat. CPE stock edged lower overnight. Callon stock jumped 7.2% to 40 on Wednesday, moving toward a 42.08 handle-buy point.
Marathon Oil earnings topped views. MRO stock were little changed extended action. Marathon Oil stock rose 3.4% to 11.70 on Wednesday. Investors could use 12.16 as an early entry from a new handle that's a few cents too low to be proper.
EQT earnings beat but revenue missed. EQT stock dipped in overnight trade. The oil and gas wholesaler rose 1.4% to 20.36 on Wednesday. EQT stock is in a short consolidation that's a couple days short of being a cup base. But 20.46 serves as a buy point.
CF stock fell modestly after earnings topped but revenue slightly missed. Shares rose 0.9% to 50.08 on Wednesday, nearing a 52.34 buy point.
FMC earnings narrowly beat views. FMC stock after hours. Shares rallied 2.3% to 121.83 on Wednesday. On a daily chart, FMC stock is slightly extended from 114.32 cup-with-handle buy point. On a weekly chart, that handle didn't appear, so it's a cup base with a 123.76 entry.
Manitowoc earnings missed but revenue topped. MTW stock fell solidly in overnight action. Manitowoc stock rose 1.8% to 24.93 on Wednesday, just within range of a 23.95 buy point from a short consolidation.
Tech Earnings
PayPal stock rose overnight on strong results, looking to reclaim its 50-day line. Digital payments rival Square (SQ) reports late Thursday. Another top payments stock, Shift4 Payments (FOUR) is due early Thursday
Qorvo stock edged higher following its beat-and-modest-raise report and a $2 billion buyback plan.
Etsy stock plunged below the low of its consolidation after the e-commerce site beat beat views but guided for slower growth.
TXG stock tumbled, signaling a sharp drop through the 50-day line, despite 10X Genomics beating views.
HubSpot stock rose modestly on strong earnings, rebounding from near its 50-day line after a recent breakout failed.
TECK stock and PayPal are on IBD Leaderboard. Teck Resources is on SwingTrader. PayPal stock is on IBD Long-Term Leaders. Rio stock was Wednesday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures climbed 0.3%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 155.88 million. Covid-19 deaths topped 3.25 million.
Coronavirus cases in the U.S. have hit 33.32 million, with deaths above 593,000.
The Biden administration supports suspending intellectual property rights for coronavirus vaccines. The goal is to speed the production of life-saving vaccines and reducing the cost around the world, especially poorer nations. Moderna, which was up intraday, tumbled on the late afternoon report to lose 6.2%. BioNTech slumped 3.45%, also reversing gains after tumbling Tuesday from record highs. BioNTech partner Pfizer erased gains to close flat. Novavax (NVAX), which should soon submit a request for emergency FDA approval, sank 4.9%.
Johnson & Johnson (JNJ) dipped 0.4%, but didn't move much on the Covid vaccine patent news.
Late Wednesday, Moderna said an experimental Covid booster shot showed promise in dealing with the South Africa and Brazil coronavirus variants. MRNA stock fell modestly early Thursday. BNTX stock, Pfizer and Novavax all fell.
Stock Market Rally
The stock market rally traded with slim-to-modest gains for most of Wednesday's before turning mixed in the final hour. The Nasdaq retreat seemed to coincide with the coronavirus vaccine patent news. It's not exactly clear why the vaccine patent news would hit, say, software stocks. But coming on the heels of Biden tax hike proposals for corporations and capital gains, the news reinforces the sense that the new administration is not a friend to business or Wall Street.
Late Tuesday, Treasury Secretary Janet Yellen said she wasn't predicting or recommending Fed rate hikes. That walked back comments aired Tuesday morning in which Yellen, the former Federal Reserve chief, said interest rates might have to rise "somewhat" due to President Biden's big spending plans.
The Dow Jones Industrial Average rose 0.3% in Wednesday's stock market trading to a record close, The S&P 500 index edged up 0.1%. The Nasdaq composite fell 0.3%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 0.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 0.9%. The iShares Expanded Tech-Software Sector ETF (IGV) slid 0.8%. The VanEck Vectors Semiconductor ETF (SMH) climbed 0.4%.
SPDR S&P Metals & Mining ETF (XME) rose 1.5%, continuing the strong momentum. Global X U.S. Infrastructure Development ETF (PAVE) edged up 0.45%. U.S. Global Jets ETF (JETS) climbed 0.55%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 1.5%, closing below its 200-day moving average for the first time in over a year. ARK Genomics ETF (ARKG) sank 1.6%.
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Market Rally Analysis
The stock market rally underlined the return to a split or bifurcated trend, wit the market moving to "uptrend under pressure" after Tuesday's tech sell-off. The Dow Jones and S&P 500 edged higher Wednesday with real economy stocks such as Caterpillar, Goldman Sachs and Chevron clearing buy points.
Meanwhile, the Nasdaq retreated, closing near session lows, though still above its 50-day line. Chip names nudged higher after some sharply losses, but software and highly valued growth names fell again, often sharply.
The Russell 2000, which finished Tuesday essentially right at its 50-day, slipped below that key level Wednesday.
Tech stocks just do not look healthy. Sure, a few tech and growth names will succeed in the current market environment, but right now the leadership is in energy, mining, and other real economy sectors.
Investors should focus on what's working, but keep a close on overall market conditions. A split market rally is hard to sustain over time. Eventually, the Nasdaq could shore up support — or the S&P 500 and Dow could start to weaken.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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