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Dow Jones Futures Signal Mixed Stock Market Rally; Tesla Eyes Key Resistance; SEC Accounting Probe Slams Three China Stocks

Dow Jones futures signaled a mixed open early Friday, along with S&P 500 futures and Nasdaq futures. The coronavirus stock market rally had a mixed session Thursday after the Nasdaq and S&P 500 nearly set record highs. Tesla stock and Amazon.com (AMZN) hit resistance around all-time closing levels and Apple (AAPL) closed on a market cap milestone.

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After the close, Chinese streaming service iQiyi (IQ) tumbled after disclosing an SEC accounting probe. The news also hit iQiyi stock's majority owner, Baidu (BIDU). GSX stock also sold off. Chinese online education specialist GSX Techedu (GSX) also has been accused of accounting fraud.

Also late Thursday, chip-equipment giant Applied Materials (AMAT) reported better-than-expected earnings and guidance. AMAT stock rose 4% early Friday.

That more than offset Applied Materials' 2.15% drop Thursday as many other semiconductor stocks struggled following a strong Wednesday. A big reason: Micron Technology (MU) issued a revenue warning intraday. MU stock, already a laggard, fell 4.8% on Thursday.

Leaderboard Stocks Stop At Key Levels

Amazon stock, Apple and Tesla (TSLA) are all on IBD Leaderboard. Apple stock is on SwingTrader.

Tesla extended Wednesday's stock split surge, but hit resistance just above its record closing high. TSLA stock rallied in overnight trade as two more bears threw in the towel, suggesting a possible above key levels.

Amazon stock reversed lower just shy of a record close and an actionable buying area. Apple did hit a new high and nearly reached a $2 trillion market cap.

Dow Jones Futures Today

Dow Jones futures retreated 0.3% vs. fair value. S&P 500 futures were 0.1% below break-even. Nasdaq 100 futures rose 0.25%, boosted by Tesla and AMAT. Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

The Senate has gone on recess until Labor Day with no new stimulus deal. That could weigh on the nascent economic recovery.

China retail sales unexpectedly fell 1.1% in July vs. a year earlier, raising doubts about the recovery in the world's No. 2 economy. Industrial output rose less than expected. The Commerce Department will release U.S. retail sales at 8:30 a.m. ET.


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


Coronavirus News

Coronavirus cases worldwide are at 21.10 million. Covid-19 deaths are above 758,000.

In the U.S., coronavirus cases have reached 5.41 million, with deaths topping 170,000.


Coronavirus Heat Map: Covid Cases, Deaths Fall, But So Does This


Coronavirus Stock Market Rally

The coronavirus stock market rally started off strong with Tesla and Apple once again leading. But the bulls lost steam on the Micron warning.

Meanwhile, Dow Jones Industrial Average fell 0.3% in Thursday's stock market trading. The S&P 500 index dipped 0.2%, still just below its pre-pandemic all-time high. The Nasdaq composite, which jumped about 1 point from Monday's record and briefly turned negative, settled for a 0.3% gain.

Apple stock rose 1.8% to 460.04 on Thursday, boosting the Dow, S&P and Nasdaq.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.4%. The iShares Expanded Tech-Software Sector ETF (IGV) popped 1.3%. The VanEck Vectors Semiconductor ETF (SMH) fell nearly 1%, reflecting losses in Micron, AMAT stock and more.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.


Amazon Stock Leads 8 Winners Setting Up Buy Points, Says Market Wizard Mark Minervini


Tesla Stock

Tesla stock popped 4.3% to 1,621 after rising intraday to 1651.18, just above its record close. Shares shot up 13% on Wednesday on news of the five-for-one Tesla stock split. That offered some aggressive entries, but the stock is extended here. Look for a push above the 1,650-1,660 area as a possible resistance area.

The all-time intraday peak is 1794.99 from July 13, but it reversed sharply lower as the Nasdaq abruptly tumbled lower.

In premarket trade, shares rose 3% to 1,670 as Morgan Stanley upgraded Tesla stock to equal weight from underweight and Bank of America to neutral from underperform. Morgan Stanley raised its price target to 1,360. BofA hiked its price target to 1,750 from 800.

Amazon Stock

Amazon stock rose to 3,217.52 intraday but reversed to close fractionally lower at 3,161.02. That was just below its record close of 3,225 on Aug. 6. Getting above that day's intraday peak of 3247.47 would offer a buying opportunity.

AMZN stock hit resistance around that level several times in the past few weeks. The one exception — like Tesla stock — was a July 13 spike to 3344.29.

China Accounting Fears

Baidu streaming video unit iQiyi disclosed that the SEC has launched an accounting investigation, following an April report by short-seller firm Wolfpack Research.

IQ stock tumbled 11% overnight. Baidu fell 5%. Both iQiyi and Baidu stock had been setting up in bases but neither has been a leader.

IQiyi reported weak Q2 revenue and guided low on Q3. Baidu also reported mixed quarterly results late Thursday.

Meanwhile, GSX stock sank 7% in extended trade. Citron Research has accused GSX Techedu of widespread fraud.

Accounting concerns about U.S.-listed Chinese firms were a big issue several years ago, but came roaring back this year as Luckin Coffee disclosed widespread sales fraud.

Congress is pushing legislation that would force foreign companies to comply with U.S. accounting oversight, something Beijing has barred. That could push Chinese stocks off U.S. exchanges eventually.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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