Dow Jones Futures: Market Rally Won’t Do This; BBBY Stock Dives 45% In Reversion

Dow Jones futures edged lower overnight, along with S&P 500 futures and Nasdaq futures. Applied Materials (AMAT) reported after the close, while BBBY stock cratered overnight. The stock market rally is in a pullback near key resistance, but really isn’t pulling back, with the major indexes edging higher Thursday.

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That’s a sign of strength, but a modest retreat would be constructive. Investors should be cautious about adding significant exposure in the very near future.

BJ’s Wholesale (BJ) and Canadian Solar (CSIQ) gapped out of bases on strong earnings, as both hail from areas of market strength. Exxon Mobil (XOM) flashed a buy signal as oil and gas stocks continue to lead with energy prices rising. Vertex Pharmaceuticals (VRTX) is retreating, but is possibly setting up a new buying opportunity.

Meanwhile, Bed Bath & Beyond (BBBY) suffered a “reversion to the meme,” plunging Thursday after GameStop (GME) Chairman Ryan Cohen, a big BBBY stock investor, announced plans to cash out. BBBY stock kept crashing overnight as Cohen completed his rapid exit.

AMAT Earnings

Applied Materials earnings were better than expected in fiscal Q3, with the chip-equipment giant also guiding higher. AMAT stock climbed modestly in overnight trade, near a two-month high. Shares of the chip-equipment giant rose 2.1% to 108.27 on Wednesday. But Applied Materials stock is still significantly below its 200-day moving average.

AMAT earnings could be good news for rival KLA Corp. (KLAC). KLAC stock was quiet in extended trade after rising 1.85% to 382.02 on Thursday. It’s working on a 399.06 cup-with-handle buy point, and is on the cusp of breaking a trendline in that handle, which would offer an early entry.

Vertex stock is on IBD Leaderboard and the IBD Big Cap 20. XOM stock is on SwingTrader.

Dow Jones Futures Today

Dow Jones futures sank 0.1% vs. fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures declined 0.1%, even with a slight boost from AMAT stock.

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 traded in a narrow range for most of Thursday’s session.

The Dow Jones Industrial Average rose less than 0.1% in Thursday’s stock market trading. The S&P 500 index and Nasdaq composite climbed 0.2%. The small-cap Russell 2000 gained 0.7%.

U.S. crude oil prices rose 2.7% to $90.50 a barrel. Gasoline futures climbed 3.1%. Natural gas futures edged down 0.6%, but are right at 14-year highs.

The 10-year Treasury yield fell 1 basis point to 2.88%.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.4%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) lost a fraction. The VanEck Vectors Semiconductor ETF (SMH) advanced 1.4%, with AMAT stock a notable component.

SPDR S&P Metals & Mining ETF (XME) climbed 2.4% and the Global X U.S. Infrastructure Development ETF (PAVE) 0.7%. U.S. Global Jets ETF (JETS) dipped 0.3%. SPDR S&P Homebuilders ETF…