BREAKING: Futures Fall As Market Rally Runs To Key Test
The Dow Jones Industrial Average, Nasdaq composite and S&P 500 rose Friday morning as the indexes kept pace for another week of gains. Electric vehicle maker Rivian (RIVN) rose at the open after reporting earnings late Thursday.
On Thursday, stocks reversed lower in afternoon trading as the S&P 500 and Nasdaq composite both closed lower. Still, both are on track for their fourth straight weekly gain as the indexes head toward their next major test of resistance at the overhanging 200-day moving average.
Economic data that showed inflationary pressures are starting to cool boosted the Nasdaq into a power trend this week, a bullish sign under IBD's market indicators. Consumer sentiment data was also released early Friday. The University of Michigan's preliminary August reading on the index was 55.1, up from 51.5 in the prior month. It previously hit a record low of 50 in June.
The Dow Jones was trading 0.6% higher while the S&P 500 advanced 0.8%.
Small caps were higher as well, with the Russell 2000 up 1.3% and the Nasdaq composite rising 1.2%, leading the upside.
Volume was lower on the Nasdaq and on the NYSE vs. the same time on Thursday.
Apple (AAPL) rose over 1.5% early Friday as the stock continues to build the right side of a cup base with 179.71 buy point. Investors may also see a large double bottom on the chart that began back in January. Either way, be on the lookout for a possible handle entry to form. The stock's relative strength line is already hitting new highs, indicating solid market outperformance.
On the downside, Johnson & Johnson (JNJ) and Chevron (CVX) led with losses of around 1% each on the Dow.
Rivian reported Q2 earnings late Thursday after the market closed and shares rose over 3% early Friday but pared gains and traded lower later in the session. Amid recent layoffs and supply-chain issues, FactSet analysts expected the EV maker to post a loss of $1.63 per share vs. a 66-cent loss in the same quarter last year.
Rivian posted a second-quarter loss of $1.89 per share, undercutting views, but revenue of $364 million beat expectations. The electric-vehicle maker has already said it produced 4,401 EVs in Q2, for a first-half total of 6,954.
Rivian said it still expects to produce 25,000 vehicles in 2022, which would require a continued ramp up. The stock remains well off its all-time high 179.47, according to MarketSmith. On the positive side, Rivian has doubled from its record low of 19.25 on May 11.
Packaging products manufacturer Sonoco (SON) broke out above a 64.39 handle buy point. Volume was light early in the day but this is subject to change, of course. Shares were up 1.5% and within the 5% buy range, which goes to 67.61.
Shares have been moving higher in heavy volume in recent sessions after gaining support at their 21-day moving average.
In the company's earnings release July 21, Sonoco beat expectations on both its top and bottom lines with EPS of $1.76 on revenue of $1.91 billion. Year-over-year earnings increases have also accelerated, from 10% to 85% to 89% in the most recent quarters.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
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