Stock Futures Mixed, Dow Jones Lags Ahead Of Alphabet Q4

Stock futures hovered in tightly mixed trade Monday, as the Dow Jones industrials dug in for a fight at the 25,000 level and investors anticipated Google parent Alphabet’s (GOOGL) fourth-quarter earnings, due out late on the stock market today.

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Alexion Pharmaceuticals (ALXN), Clorox (CLX) and ON Semiconductor (ON) all chalked up early gains on earnings news. Drug makers were busy in early trade: Evolus (EOLS) spiked following a Food And Drug Administration approval announced late Friday. Bristol-Myers Squibb (BMY) also jumped. Papa John’s Pizza (PZZA) and Ultimate Software Group (ULTI) both soared on private investor news.  Match Group (MTCH) dived after Goldman Sachs initiated coverage with a sell rating.

Futures for the Dow Jones Industrial Average hovered a fraction below their break-even mark. Nasdaq 100 and S&P 500 futures shook off early losses and edged up into tight gains. Small caps slightly outpaced the early action on the stock market today, with Russell 2000 futures rising 0.2%. (For updates on this story and other market coverage, visit the Stock Market Today page.)

Walt Disney (AAPL) inched up to take over the early lead among Dow stocks, up 0.2%. Alexion outran other Nasdaq 100 names, up more than 3%. Clorox and Alexion topped the S&P 500, with Celgene down almost 2% and at the bottom of both the Nasdaq 100 and the S&P 500.

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Dow Jones Industrials At 25,000, Deadlines Loom

A six-week rally has left the Dow Jones Industrial Average 7% below its October high and perched narrowly above the 25,000 mark on the stock market today. Holding that psychologically important level, as well as support at the index’s 200-day moving average, will be a key test for the market’s confirmed uptrend as the week get’s started.

The Nasdaq is also sitting on a six-week rally, almost 11% below its August high and about 3% below its 200-day line. The S&P 500 broke its rally in the week ended Jan. 25. It is nearly 8% below its September high mark, and just 1% from a test of resistance at its 200-day level.

The increase in breakouts among growth stocks is a clear positive for the market’s uptrend. But there remains good cause for caution as circumstances in Argentina deteriorate, an extended budget looms for federal lawmakers on Feb. 15, and the U.S.-China trade war is scheduled to see a sharp escalation of tariffs at the start of March, unless an agreement is negotiated or actions are taken.

For more in-depth analysis of the stock market and its current uptrend, read the Big Picture.

Alphabet/Google Earnings Due

Alphabet traded up 0.3%, as investors awaited a read out on the Google parent’s fourth-quarter performance after today’s closing bell. The last of the four FANG stock tech leaders to report, consensus views target a 12% EPS gain and a 21% advance in revenue. Traffic acquisition costs, or TAC, for Google’s internet search will be a critical metric. So will revenue for Amazon’s cloud computing unit, which is fighting to increase its appeal to corporate clients.

Aplhabet shares are hanging just below their 40-week moving average, attempting to start up the right side of a seven-month consolidation.

Stock Market Today: Drug Makers In Motion

Alexion Pharmaceuticals climbed nearly 3%, after reporting healthy earnings and revenue beats in its fourth-quarter report. Management hoisted its full-year earnings guidance to well above consensus targets.

The early gain, if it carries over into regular trade, would put Alexion just above an aggressive, early buy point at 129.46. The more conservative buy point in the stock’s four-month base patter is at 140.87.

Evolus sparked 14% higher after the FDA on Friday reportedly approved the company’s wrinkle treatment injection Jeuveau, the market’s first clear potential rival to Allergan’s (AGN) Botox. Evolus expects its product to price 20% to 25% below Botox. Chief Executive Officer David Moatazedi told Reuters he sees his company’s “entry into this market as very disruptive.”

Evolus shares ended Friday up 80% from a late-December low, and 50% above the stock’s year-ago IPO price. Allergan shares dipped 0.1% in early action.

Hong Kong, Tokyo Rise; China Holiday Begins

In Asia, Hong Kong’s Hang Seng Index edged up 0.2% as other of China’s stock markets were closed for the Lunar New Year celebration. Markets in Shanghai and Shenzhen will be closed for the entire week. Hong Kong will shut down Tuesday through Thursday.

In Japan, Tokyo’s Stock Exchange popped 0.5% Monday. Markets in Europe and the UK were mixed. London’s FTSE 100 traded up 0.2% in afternoon action. Frankfurt’s DAX fell 0.3%, and the CAC-40 in Paris slid 0.6% lower.

Stock Futures: Papa John’s, Ultimate Spike

Ultimate Software Group blasted nearly 20% higher, after accepting a cash offer of 331.50 per share from private-equity firm Hellman & Friedman. The deal valued the company near $11 billion, and was a 19% premium to the stock’s closing prices on Friday. Ultimate shares had climbed 26% from a late-December low.

Papa John’s spun up more than 5% in premarket action. Early news reports said Starboard Investors had established a $200 million stake in the international chain of pizza shops. Starboard CEO Jeffrey Smith had reportedly taken over as chairman of the company, while Starboard in addition received one board seat appointment.

The company has reported four straight quarters of earnings declines, and shares are down 58% since December 2016.

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The post Stock Futures Mixed, Dow Jones Lags Ahead Of Alphabet Q4 appeared first on Investor's Business Daily.

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