Dow Jones Falls As Jobs Report Looms; AMD Warns, Elon Musk Wins Twitter Trial Delay
Dow Jones futures tilted lower overnight, while S&P 500 futures and Nasdaq futures fell on an AMD earnings warning. The stock market rally attempt lost ground Thursday, hitting resistance at short-term levels ahead of Friday’s key jobs report.
X
Tesla CEO Elon Musk and his lawyers made several demands related to the Twitter (TWTR) takeover deal. Meanwhile, the judge overseeing the Twitter case gave Musk until Oct. 28 to close the deal. But that move does mean that the Musk-Twitter trial, if it occurs, won’t start until November. TWTR stock fell.
Separately S&P Global raised the Tesla (TSLA) credit rating to investment grade, a long-awaited move that will lower borrowing costs. But Tesla stock declined slightly, extending a sharp recent downtrend.
Shockwave Medical (SWAV), Arista Networks (ANET), Eli Lilly (LLY), On Semiconductor (ON) and Neurocrine Biosciences (NBIX) cleared or flirted with buy points during Thursday’s session.
NBIX stock is on IBD Leaderboard, while Shockwave is on the Leaderboard watchlist. Microsoft (MSFT) and Google stock are on the IBD Long-Term Leaders. SWAV stock and Onsemi are on the IBD 50 list. ANET stock and On Semiconductor are on the IBD Big Cap 20. SWAV was Wednesday’s IBD Stock Of The Day.
AMD Warning
After the close, Advanced Micro Devices (AMD) said third-quarter sales would be about $5.6 billion, far below the analyst consensus of about $6.7 billion. AMD blamed a weak PC market and ongoing inventory shifts.
AMD stock fell 4.5% overnight. Shares had dipped 0.1% to 67.85 in Thursday’s regular session. AMD stock is still up for the week after hitting two-year lows last week.
Intel (INTC), which vies with AMD in PC chips, retreated modestly. So did Nvidia (NVDA), which competes with AMD in graphics chips.
Separately, Aehr Test Systems (AEHR), a small chip-equipment maker with exposure to the EV space, reported better-than-expected fiscal first-quarter profit. AEHR stock jumped in extended action. Shares are signaling a move to around the 50-day line, not far from a trendline entry. AEHR stock fell 3.1% to 13.88 in Thursday’s session.
Jobs Report
The Labor Department will release the September jobs report at 8:30 a.m. ET. Wall Street expects nonfarm payrolls to rise by 250,000, a solid gain but down from August’s 315,000. The unemployment rate is seen holding at 3.7%. Labor force participation and wage gains also will be key.
The Federal Reserve wants to see labor markets easing substantially before backing off rate hikes. This week, the JOLTS survey showed job openings tumbled by 1 million in August, while weekly jobless claims rose more than expected. The ADP employment index showed solid private jobs higher, while ISM’s manufacturing and service gauges gave mixed readings on employment.
A weak September employment report could spur markets to downshift Fed rate hike expectations in the coming months. But the September consumer price index looms on Oct. 13.
Dow Jones Futures Today
Dow Jones futures dipped 0.1% vs. fair value. S&P 500 futures declined 0.2%. Nasdaq 100 futures fell 0.3%. Intel stock is on the Dow Jones, S&P 500 and Nasdaq, while AMD and Nvidia stock are notable S&P 500 and Nasdaq components.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally attempt started off with the major indexes moving modestly to just below short-term resistance, then falling back, closing at session lows as Treasury yields moved higher.
The Dow Jones Industrial Average retreated 1.15% in Thursday’s stock market trading. The S&P 500 index gave up 1%. The Nasdaq composite shed 0.7%. The small-cap Russell 2000 lost 0.6%.
The 10-year Treasury yield rose 7 basis points to 3.83%, as several Fed officials stuck to the central bank’s hawkish line. It jumped 14 basis points on Wednesday. The 10-year yield is now up for the week and not far from 12-year highs right around 4%. The 10-year Treasury yield falling Monday-Tuesday was a key tailwind for the new stock market rally attempt.
U.S. crude oil prices rose 0.8% to $88.45 a barrel, their fourth straight advance. OPEC+ on Wednesday agreed to cut production quotas by 2 million barrels per day.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) edged down 0.3%, with MSFT stock a huge component. The VanEck Vectors Semiconductor ETF (SMH) slipped 0.7%. SMH fell overnight, with AMD, Intel and Nvidia stocks all major components.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) edged up 0.3% and ARK Genomics ETF (ARKG) lost a fraction. TSLA stock is a major holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) backed off 0.45%. U.S. Global Jets ETF (JETS) sank 0.9%. The Energy Select SPDR ETF (XLE) added…
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