Dow Jones Futures: Tesla, Nvidia Lead ‘Hard Penny’ Market Rally Retreat; Netflix

Dow Jones futures rose slightly late Monday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a rough session for growth names, including but definitely not limited to Tesla (TSLA), Square (SQ) and Nvidia stock.

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Chip breakouts struggled with software names faltering around their 50-day line.

While the major indexes all remain near record highs, it’s been a “hard penny” market, according to famed investor Mark Minervini on Monday’s IBD Live. Even with the stock market rally trending higher, entering a Power Trend on Friday, it’s been a tough environment for making slim gains.

A rising 10-year Treasury yield, a weaker Bitcoin price and bad news for Nvidia and Tesla stock specifically all weighed on tech stocks Monday. Coinbase (COIN) continued to consolidate following last week’s much-hyped direct listing.

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Key Earnings

United Airlines (UAL), Steel Dynamics (STLD) and Dow Jones giant IBM (IBM) reported earnings after the close.

United Airlines reported a wider-than-expected loss and missed on revenue. UAL stock fell 2.2% in overnight trade. Shares fell 1.6% to 54.99 on Monday, testing their 50-day line. Airline and other travel stocks have retreated over the last few weeks after riding a “reopening” rally.

Steel Dynamics earnings topped forecasts. STLD stock retreated 1.35% in extended trade. Shares dipped 0.6% on Monday to 51.19. Intraday, Steel Dynamics stock hit 52.72, just clearing a four-weeks-tight pattern with a 52.69 buy point.

IBM earnings beat views while revenue edged higher, a rare year-over-year gain. Cloud revenue led the way. IBM stock rose 3.1% overnight, flirting with a possible breakout. Shares dipped 0.35% to 131.12 on Monday. IBM stock has been consolidating for a few weeks. Investors could view that as a handle to a 14-month consolidation, with 137.17 as the buy point. But the relative strength line has been in a downtrend since late 2011, highlighting IBM stock’s long-term underperformance vs. the S&P 500 index.

Netflix Earnings Due

A number of earnings reports are due Tuesday, but the big feature event is Netflix (NFLX) after the close. Shares rose 1.45% to 554.44 on Monday. NFLX stock could have a tiny handle as of Tuesday’s close with a 559.85 buy point. It already has a handle, barely, on a weekly chart.

Arguably NFLX stock is already at a trendline going back to its Jan. 20 peak, set after the Q4 earnings report.

Netflix stock fared well Monday, but its RS line is just above a 52-week low as shares have gone sideways for the past nine months.

Nvidia stock and Square are on IBD Leaderboard. Square stock is on the IBD 50.

Bitcoin Price Volatile, Coinbase IPO Consolidates

The Bitcoin price traded above $54,000 Monday night. The cryptocurrency rebounded from a Saturday night low above $51,000 to hit $57,600 Monday morning, but it fell from above $61,000 Friday night. Bitcoin hit a record high of $64,899 early Wednesday, hours ahead of the Coinbase direct listing.

Coinbase stock fell 2.6% to 333 on Monday. It was the third straight inside day.

Coinbase stock had a reference price of 385 and quickly ran up to 429.54 in Wednesday’s debut. But shares quickly reversed lower. By late afternoon, COIN stock undercut 350 and hasn’t bounced back.

Wait for an IPO base to form. Perhaps there will be an early entry for aggressive traders, but a lot of people who bought COIN stock above 350 may want to exit.

Dow Jones Futures Today

Dow Jones futures rose 0.25% vs. fair value, with IBM stock offering a slim boost. S&P 500 futures climbed 0.2% and Nasdaq 100 futures advanced 0.15%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 142.69 million. Covid-19 deaths topped 3.04 million.

Coronavirus cases in the U.S. have hit 32.47 million, with deaths above 581,000.

Stock Market Rally Monday

The stock market rally had a down session on the major indexes, but small caps and growth names had a tougher time.

The Dow Jones Industrial Average fell 0.4% in Monday’s stock market trading. The S&P 500 index lost 0.5%. The Nasdaq composite sank 1%. The small-cap Russell 2000 retreated 1.2%.

The 10-year Treasury yield rose 3 basis points to 1.6%. The 10-year yield tumbled last week, though it rebounded somewhat on Friday.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slumped 2.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) skidded 1.8%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 1.3%, though many growth names suffered bigger losses. The VanEck Vectors Semiconductor ETF (SMH) sold off 2.5%. Nvidia stock is a major component in SMH, but there was widespread weakness among chips.

SPDR S&P Metals & Mining ETF (XME) fell 1.3% and Global…