April Webinar RegistrationApril Webinar Registration


Stocks Start Higher; Nike Gets Upgrade, Amazon Hikes Prime Rate

Stocks shook off premarket jitters and opened higher Friday, as earnings reports and the rising possibility of a federal shutdown kept investor optimism in check.

X The Nasdaq Composite led, up 0.3%, as NetEase (NTES), Sirius XM (SIRI) and Nvidia (NVDA) led the Nasdaq 100 in opening trade. The Dow Jones industrial average defended a fractional gain, while the S&P 500 pulled up 0.2% - to just above the 2800 level.

IBM, AmEx Drag On Dow; Analysts Boost Nike, Nvidia

On the Dow, American Express (AXP) slumped 2.6% and IBM (IBM) tumbled 2.7% after both reported fourth-quarter results late Thursday.

American Express turned in an above-expectation performance, but suspended its share buyback initiative during the first-half in order to book a $2.6 billion charge related to the impact of reformed tax rules. AmEx shares remain extended, up 20% since clearing a flat base in June.

IBM's revenue and earnings results also cleared analyst targets, reporting its first quarterly revenue increase in nearly six years. But futures backed off hard in premarket trade, threatening to flatten the stock's 3.7% advance for the week through Thursday. IBM has advanced in 16 of 18 recent sessions, lifting it 19% off an August low, and well up the right side of a possible 10-month base pattern.

Nike (NKE) posted the Dow's strongest early move, up 2.1% after an upgrade to outperform, from neutral, by Wedbush Securities. Nike shares are extended, up about 14% since a breakout out from a cup-with-handle base in November.

Apple (AAPL) traded effectively flat, as it continues its struggle to hold above a flat base buy point at 176.34.

The four FANG stock tech names all traded higher. Amazon.com (AMZN) led the group, rising 1.3% after launching an increase to its monthly Prime membership price, to $12.99, from its current 10.99.  The 18% increase raises the membership cost by $156 per year. The company is also raising the price of student Prime memberships, to $6.49 from $5.49. Prices are not being changed for members who choose to be charged on an annual basis, with those prices remaining steady at $99 and $49 for students.

The IBD Leaderboard stock is extended, almost 7% above a 1213.51 buy point in a flat base.

IBD 50 stock Atlassian (TEAM) slipped 2.4%, after reporting late Thursday its fiscal second-quarter results bested expectations, but its third-quarter profit guidance was shy of consensus views. The stock ended Thursday's session almost 4% above a 53.55 buy point from a second-stage cup base.

Nvidia posted the strongest premarket gain among IBD 50 names, up 2.3% after Bank of America Merrill Lynch kept its buy rating and raised the stock's price target almost 10%, to 275. The note cited a strong upgrade cycle in video game graphics chips. Nvidia shares are at the top of a buy range, above a cup base buy point at 218.77.

Mellanox Technologies (MLNX) popped 4% higher, on solid fourth-quarter results reported after Thursday' close. Earnings were flat, at 82 cents per share, above expectations and enough to stop three quarters of declines. Revenue growth of 7% also cleared analysts' estimates. Mellanox shares are extended, up 27% since topping a nine-month saucer base in November.

Blockchain Stocks Positive As Bitcoin Strengthens

Bitcoin continued its rebound, trading near $11,600 according to Coinbase, up 18% from a Wednesday low. Blockchain-related stocks showed moderate premarket gains.

  • Riot Blockchain (RIOT):  up 1.3%
  • Mara Patent Group (MARA): up 1.3%
  • Bitcoin Investment Trust (GBTC): down 0.4%
  • Overstock.com (OSTK): up 2.8%
  • Eastman Kodak (KODK):  up 2.5%

Senate Standoff; Consumer Sentiment Coming Up

Overseas, global markets were all in a positive mood, with leading benchmarks in China and Japan marking off solid gains and Europe's top indexes showing solid gains near midday.

Friday's economic news is limited, with the  University of Michigan's preliminary Consumer Sentiment numbers for January due out at 10 a.m. ET, and BakerHughes' (BHGE) rig count report on the docket for a 1 p.m. ET release.

In Washington, the House approved a temporary bridge measure that would keep federal lights on until Feb. 15, buying time to hash out an overall budget agreement. But Senate Democrats have so far withheld support for the measure, holding out for concessions on Deferred Action for Childhood Arrivals, the rule concerning illegal immigrants brought here as children who have come to be known as "Dreamers."

The Washington Post reported that the general rules of engagement for a shutdown would mean 78% of defense workers would go on furlough, 83% of Treasury employees, 78% at the Agriculture Department and 87% at the Commerce Department, as well as more than 95% of workers at the Education Department, Housing and Urban Development and the Environmental Protection Agency.

The Trump administration and Interior Department were cobbling together plans to attempt to keep National Parks open, but without rangers and other staff on site. Absent an agreement, the federal furloughs would go into effect at midnight Friday.

Friday's Other Important Early Market News:

The Big Picture: Several Low-Profile, Highly Rated Stocks Moved Into Buy Zones

Hot Defense Stocks Get More Lift: Investing Action Plan

These 5 Stocks Race To Buy Points From The Hottest Industry Group