fundamental News - DJI5R

Dow Jones futures rose solidly late Wednesday along with S&P 500 futures and Nasdaq futures, with Snowflake stock and other software earnings in focus overnight. The stock market rally suffered a bearish reversal Wednesday after the CDC confirmed the first U.S. case of the omicron Covid variant, in California.

The major indexes opened by bouncing above or from key levels, only to break moving averages on the downside. Decliners beat advancers easily after a promising start for market breadth.

Bottom line: The stock market rally is under increasing pressure. Investors should take a more defensive stance.

Megacap techs Apple (AAPL), Microsoft (MSFT) and Google parent Alphabet (GOOGL) led the morning rally, but even they gave up gains to close fractionally lower. Chipmakers started strong with Ambarella (AMBA) skyrocketing on earnings. But several breakouts faltered with the afternoon sell-off.

Meanwhile, ugly action continued for software stocks. (CRM) dived on weak forecasts. Zscaler (ZS), the clear cybersecurity leader in recent weeks, reversed lower despite strong results and guidance.

Dow Jones Futures Today
Dow Jones futures climbed 0.8% vs. fair value. S&P 500 futures rose 0.7% and Nasdaq 100 futures advanced 0.7%.

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

Omicron Variant Case In U.S.
While it's no surprise, the omicron Covid variant has reached the U.S. The CDC announced that an omicron case in California has been found. The patient returned on Nov. 22 from South Africa, where the omicron variant was first detected, and tested positive on Nov. 29. The World Health Organization said on Wednesday that omicron has been reported in at least 23 countries.

The California omicron patient had been vaccinated, but had not yet received a booster shot, the CDC said. The patient has mild symptoms so far.

It may be another two weeks or so before health officials have a grasp on how transmissible the omicron variant is, said White House chief medical advisor Dr. Anthony Fauci. Coronavirus vaccine makers also may give an indication by then on how effective their treatments are in stopping omicron infections and limiting hospitalizations.

Moderna (MRNA) tumbled 12% on Wednesday, below its 50-day line. BNTX stock gave up 4.9%. BioNTech (BNTX) vaccine partner Pfizer (PFE) rallied 1.8%.

New York Fed President John Williams said Wednesday the omicron variant could slow economic growth while increasing inflationary pressures. This quasi-stagflation warning echoed Fed chief Jerome Powell's comments to Congress on Tuesday. Powell also said he was open to talking about speeding up the bond taper at the Fed meeting on Dec. 14-15.

Coronavirus cases worldwide reached 263.73 million. Covid-19 deaths topped 5.24 million.

Coronavirus cases in the U.S. have hit 49.57 million, with deaths above 805,000.

Stock Market Rally
The stock market rally started off with strong, broad gains, but reversed to close at session lows as omicron variant fears returned.

The Dow Jones Industrial Average fell 1.3% in Wednesday's stock market trading. The S&P 500 index retreated 1.1%. The Nasdaq composite slumped 1.8%. The small-cap Russell 2000 skidded 2.3%.

Apple stock hit a record high, but reversed for a 0.3% drop, and has become increasingly extended from a Nov. 17 breakout. Apple has told suppliers than iPhone demand has waned as holidays near, Bloomberg reported. That follows an analyst report that Apple's iPhone demand surged in China during Octobe.

Microsoft stock dipped 0.15%. Google stock sank 0.6% after retaking its 50-day line and coming right up to an early entry.

Crude oil futures rose more than 4% intraday, but closed down 0.9% at $65.57 a barrel. The 10-year Treasury yield nearly hit 1.5% intraday but closed down 1 basis point to 1.43%.

expectation today: bearish