Dow Jones Futures Erase Losses, As Tech Rally Continues; Apple, Tesla Jump, While Nikola Dives On Fraud Allegations

Dow Jones futures fell more than 125 points before reversing higher early Thursday, as tech futures posted sharp gains in the wake of Wednesday’s big stock market rally. Dow Jones leaders Apple and Microsoft rallied, while Tesla jumped 5%. RH surged 20% on earnings, and Nikola dived 8% on a short seller’s report.

Dow Jones stocks Apple (AAPL) and Microsoft (MSFT) were higher in premarket trade. Apple stock rallied nearly 3%, while Microsoft was up 0.6%. Tesla (TSLA) moved up 5.5% early Thursday, adding to Wednesday’s 10.9% surge. Apple, Microsoft and Tesla are IBD Leaderboard stocks.

Stocks on the move early Thursday include Peloton (PTON) and Spotify (SPOT). Peloton stock advanced 3%, while Spotify jumped 5%. Electric-truck maker Nikola (NKLA) dived 8% on fraud allegations by short seller Hindenburg Research.

Stocks in or near buy zones are (AMZN) and Wednesday’s IBD Stock Of The DayTaiwan Semiconductor (TSM). Amazon shares rallied 0.8% in early-morning trade.

Among companies reporting earnings, RH (RH) and Zscaler (ZS) reported late Wednesday. RH stock soared 20%, while Zscaler traded up about 1%.

Dow Jones Futures Today: Jobless Claims

Early Thursday, Dow Jones futures rose 0.3% vs. fair value, while S&P 500 futures were up 0.35%. Nasdaq 100 futures rallied 0.9% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The Labor Department said U.S. weekly jobless claims totaled 884,000, more than the 828,000 Econoday estimate.

Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 24.2% for the year through Wednesday’s close. Meanwhile, the S&P 500 is up 5.2%, while the Dow is down 2.1% year to date, through the Sept. 9 close.

Coronavirus Updates

According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 6.5 million on Thursday.

The cumulative total of Covid-19 cases confirmed since the start of the outbreak worldwide topped 28 million Thursday, with more than 907,000 virus-related deaths.

Coronavirus Stock Market Rally

According to IBD’s The Big Picture, the coronavirus stock market rally is seeing strong selling pressure after rebounding from lows more than five months ago, on March 23. The major stock indexes confirmed the rebound as a new uptrend on April 2.

Wednesday’s Big Picture commented, “Stock market bulls delivered a pretty clear message to the bears Wednesday: We’re not going down without a fight.”

After Wednesday’s rebound, the Nasdaq is about 8% off its all-time high. On Tuesday, the tech-heavy composite closed below its key 50-day support level for the first time since the start of the new uptrend on April 2.

Amid worsening general market conditions, investors should be more focused on locking in profits and cutting losses short. Another way to reduce risk is to move off margin. Be careful with new buys. The increased risk in the market should give you pause.

Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance.

Dow Jones News: Apple

Among the Dow Jones stocks, Apple stock moved up nearly 3% early Thursday, as the iPhone maker looks to add to Wednesday’s 4% advance. Shares are rebounding after falling as much as 19.6% from their all-time high.

Apple stock is about 63% above a cup-with-handle’s 72.15 buy point. The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 59.8% advance through Wednesday’s close.

Stocks Near Buy Zones: Amazon, TSM

Amazon reclaimed an early entry at 3,246.92 Wednesday, but is still below a 3,344.39 entry in a flat base, according to a MarketSmith chart analysis. Shares are rebounding from support near their 50-day line amid the current stock market pullback. The stock rallied 0.8% early Thursday.

According to the IBD Stock Checkup, Amazon stock shows a best-possible 99 IBD Composite Rating. The Composite Rating is a simple way to easily measure the quality of a stock’s fundamental and technical metrics.

Wednesday’s IBD Stock Of The Day, Taiwan Semiconductor, is close to forming a new flat base. The new base will offer a 84.10 buy point. Shares rallied 1% in premarket trade.

Stocks On The Move: Nikola, Peloton, Spotify

Electric-truck maker Nikola dived 8% on fraud allegations by short seller Hindenburg Research. The report called Nikola an “intricate fraud.” Nikola stock ended Wednesday about 55% off its 52-week high.

Peloton moved up 3% early Thursday, following Wednesday’s 6.5% jump. On Wednesday, Cowen and Goldman Sachs raised their price targets to 110. Meanwhile, Wedbush upped its price target from 66 to 100.

Shares are set to hit all-time highs at the open, despite recent stock market weakness. Peloton reports after the close.

Spotify advanced 5% in premarket trade Thursday, as the music-streaming leader looks to add to Wednesday’s rebound. Credit Suisse upgraded the stock from neutral to outperform.

Shares are about 18% off their 52-week high.

Tesla Stock

Tesla stock jumped 5% early Thursday, adding to Wednesday’s 10.9% surge. The stock is rebounding from its 50-day moving average line, a key support area to watch.

Shares hit an all-time high on Sept. 1, topping out at 502.49 before reversing lower. Shares remain more than 25% off their 52-week high.

Stock Market Earnings: RH, Zscaler

RH stock soared 20% after reporting fiscal second-quarter earnings that beat expectations. The company said it expected “elevated spending on the home” into the year ahead. RH earned $4.90 per share in its second quarter, a 53% jump that was well above Zacks forecasts for $3.38. Revenue of $709.7 million topped estimates for $683.6 million.

RH stock is set to make an all-time high after finding support at its 50-day line on Sept. 4.

Zscaler earnings and revenue for its fiscal fourth quarter topped estimates as the company’s 2021 guidance also came in above the Street’s targets. The company said it earned 5 cents a share on an adjusted basis vs. a 7-cent profit a year earlier. Revenue rose 46% to $125.9 million.

Zscaler stock moved up 1% in premarket trade Thursday. Shares are holding above their 50-day line amid a sharp pullback.

Dow Jones Leaders: Microsoft

Among the top Dow Jones stocks, software leader Microsoft was up 0.5% early Thursday. On Tuesday, shares closed below their 50-day support level for the first time since the May 5 breakout above a cup-with-handle’s 180.10 buy point. The stock closed Wednesday just below the 50-day line after a 4.3% rally.

This article was originally posted by Investor’s Business Daily