Dow Jones futures fell modestly Thursday morning, along with S&P 500 futures and Nasdaq futures, ahead of some notable economic reports. The stock market rally rebounded modestly Wednesday from key levels, snapping a Nasdaq losing streak and ending, for now, a series of weak closes in the major indexes.
Energy stocks and steelmakers were big winners Wednesday, with Devon Energy (DVN) and Arcelor Mittal (MT) flashing buy signals. But it was a broad-based advance. Palantir Technologies (PLTR), Microsoft (MSFT) and Copart (CPRT) also offered buying opportunities.
Microsoft and Devon stock are on IBD Leaderboard. Copart, Arcelor Mittal and PLTR stock are on SwingTrader. Microsoft stock and Copart are IBD Long-Term Leaders. CPRT stock was Wednesday’s Stock Of The Day.
The video embedded in this story analyzed the bullish market action and reviewed Devon Energy, Copart and MT stock.
Dow Jones Futures Today
Dow Jones futures were 0.15% below fair value. S&P 500 futures lost 0.2%. Nasdaq 100 futures fell 0.3%.
At 8:30 a.m. ET, investors will get weekly jobless claims, August retail sales and the September Philly Fed manufacturing index.
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
Stock Market Rally
The stock market rally started off Wednesday mixed to slightly lower, but slowly gained steam.
The Dow Jones Industrial Average rose 0.7% in Wednesday’s stock market trading. The S&P 500 index popped 0.85%. The Nasdaq composite gained 0.8%. The small-cap Russell 2000 popped 1.1%.
Crude oil futures rose sharply amid declining U.S. inventories and Gulf of Mexico production that remains sharply reduced since Hurricane Ida. Copper prices also rallied.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1%. MSFT stock is a top IGV holding. The VanEck Vectors Semiconductor ETF (SMH) nudged up 0.35%.
SPDR S&P Metals & Mining ETF (XME) popped 3.3% and Global X U.S. Infrastructure Development ETF (PAVE) rose 1.5%. U.S. Global Jets ETF (JETS) ascended 0.5%. SPDR S&P Homebuilders ETF (XHB) climbed 0.8%. The Energy Select SPDR ETF (XLE) leapt 3.7%, with DVN stock a holding. The Financial Select SPDR ETF (XLF) gained nearly 1%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 0.8% and ARK Genomics ETF (ARKG) 0.5%. Highly valued growth stocks have been lagging even as growth names broadly are doing well.
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Arcelor Mittal Stock
MT stock jumped 6.4% to 34.38, rebounding above its 50-day line and breaking a short downtrend, offering early entries. Mittal stock also reclaimed an old 34.06 buy point, though it’s unclear if investors should give that much weight.
Like many other steelmakers, MT stock ran up in late July to early August, then fell back, giving up much of its gains.
On Wednesday, Steel Dynamics (STLD) guided up on the third quarter and was bullish about Q4. STLD stock rallied, along with Nucor (NUE), U.S. Steel (X) and more, but MT stock had the clearest early entry.
CPRT stock popped 3% to 148.91 in the heaviest volume in six months. It briefly edged past a 149.16 buy point from a flat base just before the close, according to MarketSmith analysis. But it’s already actionable: Copart stock flashed buy signals after rebounding from its 50-day line, clearing short-term resistance and breaking a short trend line. CPRT stock initially tumbled Sept. 9 following the salvage vehicle retailer’s earnings, but rebounded to close right at its 50-day line.
DVN stock leapt 7.3% to 30.33, close to an official 30.65 handle buy point. But Devon stock broke a downtrend in the handle in heavy volume, offering an early entry. Crude oil prices are rallying on tight supplies, while natural gas prices are booming worldwide, providing a renewed tailwind for energy stocks. Cimarex Energy (XEC) cleared an official buy point Wednesday, though it moved quickly off consolidation lows in late August. The XLE ETF is back above its 50-day line, breaking a downtrend.
Microsoft stock rose 1.7% to 304.82, a record close and just below the 305.84 all-time high from Aug. 20. Shares continued a rebound from their 10-week line and broke a short trend line in a tight consolidation, offering an aggressive entry. Late Tuesday, Microsoft announced a $60 billion buyback and hiked its quarterly dividend 11%.
PLTR stock rose 3.1% to 27.07, clearing resistance over the past couple of weeks and offering an alternate entry around 26.98. The data analytics firm has generally traded slightly above a 26.04 cup-with-handle bottoming base buy point since late August, but didn’t feel like a “breakout.”
Market Rally Analysis
The stock market rally got a much-needed win Wednesday. It wasn’t a massive rebound and volume was mixed. But the market rally found support where it needed to. The S&P 500 rebounded from its 50-day line and closed above its 21-day line. The Russell 2000 bounced from near its 200-day to just above its 50-day. The Nasdaq moved higher from just below its 21-day line. The Dow rose, but is still below its 50-day.
Also, stocks closed near session highs, a big shift from the bearish trend of solid opens and weak closes.
The S&P 500 has bounced successfully from around its 50-day line several times in recent months. So this all seems to be like clockwork. And maybe this is the start of another good stretch. But don’t assume it’ll happen.
Oil and steel stocks were big winners Wednesday. These sectors are mercurial, driven by underlying prices. So if you’re going to play stocks like Mittal or Devon Energy, buying as early as possible is extra important.
But the market rally was broad-based, especially by the close.
Growth stocks overall did well, though MSFT stock certainly helped. Chips had a quiet session, but are holding right at highs.
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What To Do Now
The stock market rally had a nice bounce. Investors could have added a little exposure today, especially if they were defensive over the past week or so. If the market continues to rise from these levels, investors could gradually step in and add more. Of course, Wednesday could be a blip, with the major indexes quickly undercutting recent lows and breaking key support. So don’t rush to bulk up exposure.
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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