Dow Jones futures fell slightly early Friday, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDA) and Applied Materials (AMAT) guided low late Thursday. That's bad news for the chip sector, which already closed below long-term support. Nvidia stock and Applied Materials stock retreated late, along with modest losses from Micron Technology (MU) and Lam Research (LRCX). Meanwhile, upscale department-store Nordstrom (JWN) gapped higher late on strong earnings, signaling a move back into buy zone for the volatile retail stock.
XDow Jones Futures Today
Dow Jones futures fell nearly 0.1% vs. fair value. S&P 500 futures were down 0.15%. Nasdaq 100 futures lost 0.25%.
During Thursday's stock market trading, the Dow Jones led the way with a 1.6% gain, fueled by big earnings gains from Cisco Systems (CSCO) and Walmart (WMT), as well as planned U.S.-China trade talks this month. The S&P 500 index climbed 0.8%. The Nasdaq composite rose just 0.4% as FANG stocks Facebook (FB), Netflix (NFLX) and Google parent Alphabet (GOOGL) retreated. Chip stocks also edged lower.
Nvidia Earnings Strong, Outlook Light
Nvidia earnings topped fiscal second-quarter views. So did the graphics chip maker's revenue. But Nvidia stock struggled after the company guided light on current Q3 sales. Blame a sharp drop in demand from cryptocurrency miners for Nvidia chips.
Shares fell 2.7% to 250.47 early Friday, off overnight lows but signaling a move below the 50-day line. Nvidia stock closed down 0.6% to 257.44, but has been working its way toward a 269.30 buy point from a late-stage cup base.
After-hours action doesn't always translate into regular-session trading. Nvidia stock could end up moving higher. But assuming shares fall, look to see if they can close above their 50-day moving average, which is just above the 252 level. At worst, Nvidia's 200-day line is around 233.
Applied Materials Earnings Top, Stock Flops
The chip equipment giant reported a 19% revenue gain, while Applied Materials earnings per share climbed 40%. But, like Nvidia, Applied Materials gave weak guidance for the current quarter. Applied Materials blamed weak customer spending, increasing concerns that the semiconductor market has topped.
Applied Materials stock tumbled 3.7% in Friday's premarket, after dipping 0.2% to 47.43 on Thursday. Shares have been trending lower for five months, and closed just below their 50-day moving average.
Applied Materials might have a bigger impact on the chip sector than the better-performing Nvidia, though. Applied Materials is exposed to the memory-chip market. So is fellow chip gear maker Lam Research. Lam Research stock fell 1.9% in the premarket. Memory-chip giant Micron stock lost 1.7% early Friday.
Why Chip Stocks Matter
The Philadelphia Semiconductor Index dipped 0.1% Thursday, closing just below its 200-day moving average. The Philly Sox has found support at the long-term support level a few times in the past few months, but it's a critical area.
The iShares PHLX Semiconductor (SOXX), a related ETF, sank 0.8% early Friday.
Chip stocks typically lead or at least take part in stock market rallies. They account for a big share of the stock market, especially the tech sector. And chips are in just about every product. If chip stocks aren't performing well, that's a bad sign for the broader stock market.
Nordstrom Stock Gaps Higher
Nordstrom earnings, sales and guidance were all better than expected for the upscale department-store chain.
Nordstrom stock rose nearly 9% early Friday to 56.80. That signals a strong move back above a 54.10 entry. If shares gap above the 5% chase zone, investors could buy the breakaway gap using the opening price as the entry.
Nordstrom stock reclaimed a buy zone on Tuesday, along with Macy's (M). But when Macy's stock plunged Wednesday on its earnings report, Nordstrom sank 5.5%. Nordstrom rebounded 0.8% during Thursday's session, even with downscale department-store J.C. Penney (JCP) crashing 27% to a record low.
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