Stock futures turned mixed Tuesday as coronavirus concerns flared after federal regulators recommended a pause in administering a top U.S. vaccine as they look into potential risks. Dow Jones stock Johnson & Johnson shares dived on the news, as Moderna led competing vaccine makers higher. Cryptocurrencies Bitcoin and Ethereum both leapt to new highs, a day ahead of the Coinbase initial public offering.
Dow Jones futures halved early losses, to 0.2%. S&P 500 futures reversed and gained strength, rising narrowly above fair value. Nasdaq futures also reversed losses, adding 0.5% on the stock market today, as Advanced Micro Devices (AMD), Tesla (TSLA), PayPal Holdings (PYPL) and Amazon.com (AMZN) gained ground.
The premarket picture reverted partly to Covid fear posture, with Zoom Video (ZOOM) up 2% to lead the Nasdaq, while airlines and cruise lines dived to the bottom of the S&P 500. Industrial vendor Fastenal (FAST) dropped 2.8% after reporting mixed first-quarter results.
AMD rose 1.4%, leading an early advance among chip stocks. The iShares PHLX Semiconductor ETF (SOXX) climbed 0.6%.
Fertilizer maker Mosaic (MOS) led the S&P 500, up almost 2% after Berenberg upgraded the stock to buy, from hold, with a price target at 40. Mosaic is in a buy range on a rebound from support at its 10-week moving average. Shares are up almost 35% since Dec. 31.
J&J Drags On Dow Jones, Boosts Moderna
Dow Jones stock Johnson & Johnson (JNJ) slumped almost 3%, after the Centers for Disease Control and the Food and Drug Administration issued a joint Twitter statement recommending a pause in administering J&J’s Covid-19 vaccine, due to an “abundance of caution” as it studies possible related risks.
Four recipients in Europe, and six in the U.S. have reportedly developed “a rare disorder involving blood clots within about two weeks of vaccination,” according to the New York Times. All of those affected in the U.S. were women, one of which died, with another hospitalized in critical condition, according to the NYT.
Investors sent shares of vaccine maker Moderna (MRNA) up more than 5%. Pfizer (PFE) rose 1%, and vaccine partner BioNTech (BNTX) led the IBD 50 list, rallying 2.4% and nearing a 131 buy point in an 18-week base.
Inflation Gauge Jumps In March
The Labor Department’s Consumer Price Index inflation gauge jumped 0.6% in March, picking up the pace after a 0.4% increase for February. That was just above the 0.5% rise targeted by economists.
Year-over-year, the CPI popped 2.6%, vs. February’s 1.7% rise and against projections for a 2.5% gain. Core prices, minus food and energy, gained 0.3% — triple that of February’s increase and also above expectations.
Dow Jones Apple Lags As Siri Sings
Apple (AAPL) shook off early losses and rose 0.3% on the Dow Jones industrials in early trade. Website MacRumors reported that Apple’s Siri virtual assistant, when asked “When is the next Apple event?” Is prematurely revealing an April 20 date, at which Apple-watchers are expecting the introduction of an iPad Pro, and possibly an iPad Mini 6 and Apple AirTag tracking devices.
Apple stock snapped a seven-day win streak on Monday, but has now spent four days back above its 50-day moving average. It is up 13% from its March 8 low. Shares are climbing the right side of a 12-week cup base, after the stock’s first test of 40-week support since the pandemic sell-off a year ago. The stock is about 11% below the base’s working buy point at 145.19.
Chip Wars: Nvidia vs. Intel
Chips were in sharp focus for a second day as Nvidia (NVDA) shed early losses and rose 0.6%. Nvidia stock had spiked 5.6% on Monday following news that the graphics chip leader plans to manufacture data-center central processing units to compete directly with Intel.
Nvidia’s jump left shares 1% below a 615 buy point in what IBD MarketSmith analysis charts as a nine-week cup base. The cup undercut the chart’s prior base pattern, resetting the base count for Nvidia stock.
Among the Dow Jones industrials, Intel trimmed its early gain to 0.2% — still enough to lead the index in premarket trade. Intel stock dropped 4.2% Monday on Nvidia’s news. The pullback ended precisely at the stock’s 21-day exponential moving average, and in a buy range about 3% above a 63.64 buy point in a cup-with-handle base.
Reuters reported late Monday that Intel was in discussions to potentially begin to manufacture chips for automakers, which have seen recent production delays due to recent chip shortages.
Market Vital Signs
Market action was mixed overnight on Tuesday, while Tokyo’s Nikkei 225 rallied 0.7% on value buying, some earnings strength and as the dollar rose vs. the yen. Europe’s markets were mixed near mid-session, with the CAC-40 in Paris leading the region, up 0.3%.
Crude oil prices, a key indicator of recovering economic activity, were rising with West Texas Intermediate back above $60 per barrel, around which it has traded since a pullback in mid-March.
Bonds continued lower, sending the 10-year yield above 1.68%. Yields settled at 1.67% after a two-day gain on Monday, according to CBOE data, down from a March 31 settle at 1.74%. A year ago, yields were around 1.8%, down from about 2.7% a year earlier. They sank to record lows around 0.5% in August.
Bitcoin, Ethereum Surge To New Highs
Bitcoin surged almost 5% to a new high, briefly topping $63,000, according to CoinDesk. The cryptocurrency clocked its prior record at $61,556 on March 13. Competing cryptocurrency Ethereum also racked up new highs, up almost 3.5%, to just above $2,200.
Bitcoin related stocks were predictably in motion. Mara Patent Group (MARA) soared 7%. MicroStrategy (MSTR) posted a 3.3% gain. The related Amplify Transformational Data Sharing ETF (BLOK) rallied 4.5%, nearing a potential early buy point at 61.74.
Cryptocurrency exchange Coinbase is scheduled to launch its initial public offering on the Nasdaq on Wednesday, trading under the ticker COIN.
Dow Jones Names Head Earnings Season
Wednesday kicks off the March quarter reporting season, with Dow Jones stocks JPMorgan (JPM) and Goldman Sachs (GS) due to report early, along with Wells Fargo (WFC), Infosys (INFY) and Lovesac (LOVE). Dow Jones peer UnitedHealth Group (UNH) reports on Thursday.
Now is the perfect time for investors to brush up on their earnings season options-buying strategy, in order to limit risk when buying stocks of companies reporting earnings.
JPMorgan is below a 162.79 buy point in a four-weeks-tight pattern, with an 81 Composite Rating and a year-to-date gain of 22%. Wells Fargo is also in a four-weeks-tight pattern, with a buy point at 41.64.
Infosys is in a buy range that runs through 20.13, after clearing a 19.17 buy point in a cup base. Its shares rank an 81 Composite Rating from IBD.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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