Tech stocks were under some pressure in extended trade Tuesday, as futures steered toward a narrowly positive start on Wednesday.
Futures for the Dow Jones industrial average inched a fraction above fair value. S&P 500 futures nosed up 0.1%, while Nasdaq 100 futures scratched out a 0.2% gain.
IBM (IBM), Intuitive Surgical (ISRG), Lam Research (LRCX), railroad CSX (CSX) and United Continental Holdings (UAL) were among the leading names in motion in extended trading.
Tech stocks drove to the head of the market as it seized powerful gains in rising trade Tuesday. Netflix (NFLX), Goldman Sachs (GS) and UnitedHealth (UNH) posted first-quarter results that all carried elements of upside surprise. Investors sent more stocks to news highs than any session in the past five weeks. The Dow, Nasdaq and S&P 500 all climbed above their 50-day moving averages. That cleared a barrier in the market’s week-old uptrend as the Nasdaq works toward prior highs logged in March.
Netflix surged 9.2%, driving the Nasdaq and the S&P 500. UnitedHealth popped 3.6% to lead the Dow. Both stocks were effectively flat in extended trade Tuesday. The question now: can indexes hold support above their 50-day lines?
Intuitive Surgical, CXS, United Climb; Tech Stocks IBM, Lam Slide
After Tuesday’s closing bell, Intuitive Surgical climbed 3.9%. The maker of the da Vinci robotic surgical system reported a 25% EPS gain and an 18% rise in revenue for its first quarter. The number of surgical systems shipped soared 39%, with procedures performed using the da Vinci system rising 15%.
Intuitive’s shares rose 4.1% in regular trade Tuesday, the stock’s best session since January. Shares are more than two months into a new base, closing Tuesday less than 4% below the potential buy point at 452.10.
Lam Research tumbled 6.6% in late action, despite a largely positive fiscal third-quarter report. The chip equipment leader’s earnings swept up 71%; revenue jumped 34%. Both were above consensus targets. Q4 guidance also surpassed expectations. Lam is the first chip-sector name to report results during a season in which investors are feeling flighty about chip stocks in general.
Lam shares surged 4.3% in Tuesday’s regular trade. The stock has been consolidating for nearly six weeks.
Transportation issues played well after the close, with CSX up 5.1% and United Continental taking off almost 3% in late trade. Both companies scored Q1 earnings and revenue beats. Both are also in consolidations, but have a long way to go before reaching a valid buy point.
On the Dow, IBM dived more than 5% after Tuesday’s close, despite what appeared to be a stronger-than-expected Q1 report. The stock has had little success in attempts to climb out of a 13-month consolidation.
IBD 50 issue Interactive Brokers (IBKR) edged up 1.2% after the close. The Greenwich, Conn.-based online broker reported larger-than-forecasts sales and earnings gains after Tuesday’s close. The stock closed Tuesday in a buy range, above a 74.21 buy point in a flat base.
Financial And Tech Earnings, Oil Prices In Focus Wednesday
Morgan Stanley (MS), ASML Holding (ASML) and U.S. Bancorp (USB) are among the names scheduled to report results early Wednesday.
Wednesday’s session also offers a simple calendar of economic releases. Homebuilding stocks aren’t likely to see much reaction to weekly mortgage applications data, due out from the Mortgage Bankers Association before the open. Later in the morning, energy stocks and oil prices, now hovering near three-year highs, may respond to weekly oil inventories news from the Energy Information Administration. In the afternoon, the Federal Reserve releases its March Beige Book.