Stocks got off to a mixed start Friday, as the Dow industrials struggled to stretch its rally to an eighth day, but earnings-driven declines by Nvidia (NVDA), Symantec (SYMC) and others dragged on early trade.
The Dow Jones industrial average clung to a fractional gain in opening trade. Verizon (VZ) was an early strong suit among blue chips, up 1.9% after an upgrade from JPMorgan.
The S&P 500 also defended a narrow gain, while the Nasdaq Composite slipped into tight early losses. Security software developer Symantec fell hard, to the bottom of both indexes.
Verizon Now Overweight; Nvidia Drags On Chips
Earnings news provided a hub for early action, with Nvidia, Trade Desk (TTD), Yelp (YELP) and Symantec all posting significant moves.
On the Dow index, Verizon swung to an early lead, after JPMorgan upgraded the stock to overweight, from neutral. Verizon shares spiked, then sold off hard at the end of April, on news of a $26 billion merger between Sprint (S) and T-Mobile U.S. (TMUS). Shares ended Thursday 13% below their April high.
Nvidia was a key a name to watch Friday, opening almost 2% lower after its late-Thursday earnings report. The graphics chip pioneer crushed fiscal first-quarter earnings and revenue expectations, and gave second-quarter revenue guidance above consensus views. The company offered no earnings guidance for the second quarter. Still, the industry leader’s slip threatened the week’s strong performance among chipmakers.
Friday’s early loss dragged the stock back below a flat-base buy point at 254.60. The chart also can be interpreted as a double-bottom base. By that view, shares remained extended 5% above the 239.35 entry.
Nearly all of the chip stocks listed on the Philadelphia Semiconductor Index moved lower in early trade. Advanced Micro Devices (AMD) fell alongside Nvidia, down 2% in early action. The Philly Chip Index gained 4.9% for the week through Thursday, and was leaning toward its first two-week advance since March.
Zebra In Buy Range; Yelp, Dropbox Slide; Trade Desk Scores Breakaway Gap
Symantec collapsed 35% as analysts downgraded the stock following its fiscal fourth-quarter report late Thursday. Weak guidance damaged an otherwise stronger-than-expected quarterly performance. Symantec shares had climbed 17% in a seven-week advance since March, attempting to build the right side of a seven-month consolidation.
Trade Desk spiked 33% in opening trade. The online advertising services platform reported late Thursday its first-quarter earnings growth accelerated to 89%. Growth in revenue also accelerated for a 61% increase. Both numbers easily topped analyst targets. Management’s raised second-quarter and full-year revenue and earnings guidance were well above consensus hurdles.
The IPO’s opening action marked a breakaway gap, that lifted sharesw well beyond buy range past a 61.03 buy point in a gnarled-looking cup base. This remains a buy opportunity, but it’s best to read up on buying breakaway gaps before trying to jump in.
Another IPO, Dropbox (DBX), fared less well. The stock stumbled 2.1% lower after reporting better-than-forecast first quarter earnings, revenue and user growth late Thursday. It was the company’s first report since going public in March. Shares remained 50% above their IPO price.
Business review site Yelp spilled nearly 9% lower, despite reporting a narrower loss and better revenue growth than expected in its first quarter. The loss ended a six-weekj advance, sending the stock below its 10-week moving average in heavy trade.
Crude Oil Holds Above $71, Export Prices Jumped In April
Energy stocks were largely quiet as crude oil prices traded narrowly lower early Friday. U.S. benchmark West Texas Intermediate was down 0.3%, holding well above $71 per barrel. Crude gained 0.3% Thursday, with WTI settling at $71.36 a barrel, up 2.4% so far for the week. Prices could feel some effect on Friday when Baker Hughes (BHGE) releases its weekly rig-count survey at 1 p.m. ET.
Import prices crept up 0.3%, export price jumped 0.6% in April, the Labor Department reported. Economist had expected a 0.5% jump in imports and a smaller, 0.3% rise in export prices.
The University of Michigan delivers its preliminary reading on May consumer sentiment at 10 a.m. ET.
Paris, Frankfurt, London Set To Match Hong Kong’s 7-Week Rally
A glance across Asian stock markets shows Hong Kong’s Hang Seng Index rallying more than 1% on Friday. That left the benchmark with a 4% gain for the week, its best since mid-February, as it attempts to climb up from a three-month consolidation. China’s Shanghai Composite slipped 0.4% Friday, ending the week with a 2.3% gain. In Japan, the Nikkei 225 in Tokyo capped the week with a 1.2% rally Friday, advancing 1.3% for its seventh straight weekly gain.
Europe’s market improved to mixed trade Friday, with Frankfurt’s DAX and the CAC-40 in Paris each down more than 0.3% in afternoon trade. London’s FTSE 100 fought to hold a fractional gain. For the week, the FTSE 100 is up 1.7%, the DAX ahead 1.2% and the CAC-40 holds a fractional gain. All three indexes are lined up for their seventh straight weekly advances.
