Stocks trimmed early losses Friday with the Dow showing some early resilience, as earnings news fueled some dramatic early moves. PayPal jumped on management comments. IPO Bumble spiked in its second day of trade. Canada's GreenPower jumped on an EV deal with a Warren Buffett company. Disney stock lagged on the Dow Jones today, despite reporting the subscriber base for its Disney+ service was nearing the 100 million mark.
XThe Dow inched briefly higher, then slipped to 0.1% decline. The S&P 500 traded down less than 0.1%. The Nasdaq Composite pared its opening decline to 0.2% on stock market today, as FANG stocks traded generally lower and DexCom (DXCM) dropped to the bottom of the Nasdaq 100 following an earnings miss.
Illumina (ILMN) rallied to the head of the Nasdaq 100, up more than 10% after a Q4 earnings and revenue beat late Thursday. IBD Leaderboard stock PayPal Holdings (PYPL) climbed 3%, as at least nine analysts increased price targets after positive comments from management on Thursday.
Also on IBD's Leaderboard list, CrowdStrike Holdings (CRWD) bolted 4.4% higher, seizing a new high.
Mobile communications play Vocera (VCRA) staged a powerful a rebound from 10-week support, up 10% after its fourth-quarter report late Thursday.
Small caps fell harder than the overall market, sending the Russell 2000 down 0.4%. At the top of the index, Biotech Immunogen (IMGN) vaulted 17% higher on earnings. Biotech Inovio Pharmaceuticals (INO) spiked 20% after Oppenheimer initiated coverage.
New IPO Bumble (BMBL) came to life and rocketed more than 16% higher, after surging more than 63% in its first day of trade on Thursday. Aurora Cannabis (ACB) dropped 5.1%, despite reporting above-forecast fiscal-second quarter results late Thursday.
Dow Jones Today: Disney Earnings
Walt Disney (DIS) shed its premarket gain and slipped 1.5% on the Dow Jones today, after reporting a solid fiscal first-quarter performance. Disney+ subscribers climbed to 94.9 million as of Jan. 2, up 9% from 86.8 million on Dec. 2 and 258% from a year ago. The monthly fee for U.S. subscribers is set to rise from $1 to $7.99 per month in March.
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Streaming video has helped make up some of the loss from theme parks and movie theaters shuttered by the coronavirus pandemic. Disney revenue now has declined for three straight quarters. Earnings have now slipped for nine consecutive quarters, and in two consecutive years.
Meanwhile, Disney stock cleared a 183.50 buy point in a flat base on Monday. Shares ended Thursday still in a buy range that runs to 192.68.
Earnings News: Hubspot, GreenPower
HubSpot (HUBS) snapped 17% higher, exiting a buy range after topping a cup base buy point on Monday. The CRM software developer reported fourth-quarter earnings and revenue well above analyst expectations, and raised first-quarter guidance. If the premarket move holds up through the open, the stock would be extended above its buy range, and will have triggered the eight-week hold rule.
Raymond James and Mizuho upgraded the stock. Piper Sandler raised its price target to 600, from 488. HubSpot was featured in IBD's New Highs segment on Monday.
British Columbia-based GreenPower Motor (GP) rallied more than 7% in early action. The maker of electric bus and commercial vehicle chassis reported fiscal third-quarter results, and also announced a deal to sell 150 cabs and chassis to Forest River RV, a unit of Warren Buffett's Berkshire Hathaway (BRKB).
The units, set for delivery in the first quarter, will be the foundation for a line of Forest River electric shuttle buses and commercial vehicles, the companies said.
GreenPower shares ended Thursday up 44% from the close on their first day of public trade in August.
Other stocks moving on earnings included 2U (TWOU), Cognex (CGNX), Vocera and J2 Global (JCOM). American Axle & Manufacturing (AXL) rallied 6.6% after its early-Friday report.
PayPal Shoots For 750 Million Users
PayPal held its annual investors day — virtually, of course — on Thursday. Chief Executive Dan Schulman said the company could have 750 million active accounts by 2025, up from 377 million at the end of the fourth quarter. Factors including installment and in-store payment options, and cryptocurrency trading are driving increased engagement trends and, as a result, the CEO said, the company was seeing "historical engagement curves start to bend and accelerate."
The IBD 50 and Leaderboard stock gapped up on Feb. 4, after its fourth-quarter earnings report. Shares are extended, up about 32% from a December breakout.
Dow Jones Today: Chasing Small Caps, Growth Stocks
The Dow Jones today heads for the starting bell up 0.9% for the week and sitting atop new highs. The S&P 500 has a 0.8% gain. The Nasdaq has run up 1.2%, despite a modest loss on Thursday. The Nasdaq and S&P 500 are also at new highs.
Small caps and growth stocks outperformed by a wide margin. Both the Russell 2000 and the Innovator IBD 50 ETF (FFTY) gained 4.2% through Thursday. The number of breakout targets may be decreasing, but breakouts themselves are generally holding up well, and earnings season action largely has been positive.
For more detailed analysis of the current stock market and its status, study the Big Picture.
But it's important to note that the Russell now trades more than 38% above its 200-day moving average — the highest levels in the index's history. The Russell peaked at 32% above its 200-day line, 15.2% above its 50-day, on March 10, 2000, just as it rolled over into the dot-com bust.
The Nasdaq was 17% above its 50-day line at that point. So while the Russell looks a little superheated, the Nasdaq's current 7.5% margin above its 50-day looks tame by comparison. Still, for the Nasdaq, margins of more than 6% above the 50-day tend to signal pullbacks, or at least periods of flat trade that allow the moving averages to catch up.
This and a number of other caution flags hanging over the market's '"confirmed uptrend" status give investors good reason to remain cautious and alert.
Tracking The Energy/Transportation Paradigm Shift
Paradigm shift is always a dangerous term. As soon as investors begin to buy into a new or reconfigured horizon, for either the U.S. or global economies, the new paradigms have a tendency to collapse or fade, and markets revert to the status quo.
However, the stock market, and the U.S. and global economies have seen a startling number of paradigm shifts since the turn of the century. The emphatic rise of China's economy, smartphones, shale oil and natural gas and social media are just a few examples of massive industrial/economic shifts in the past 20 years.
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Now the stock market appears to be reflecting another, even larger revolution, as energy and transportation markets move into a post-fossil fuels era. Solar, electric autonomous vehicles, battery storage, fuel cells, hydrogen and other technologies are all for the first time reaching competitive levels of cost-effectiveness and efficiency. The world's largest investors and funds recognize this and are directing a tectonic shift in global capital.
Reflecting the value of such a shift is hard work, and uncharted territory for the stock market. And right now that, at least partly, appears to be driving the kind of unusual, extended chart behavior we're seeing with the Nasdaq and the Russell 2000.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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