The Nasdaq demonstrated continued market leadership and top stocks today showed resilience. The premier index for growth stocks rallied more than 1.2% and is threatening to cross back above its 50-day moving average.
Institutional investors appear to be wading back into market waters on news that U.S. tariffs on auto-related imports may get a six-month delay. This comes just days after IBD downgraded the current outlook for stocks in the wake of heavy-volume selling Monday.
The S&P 500 reversed from an early-morning loss of around 0.7% to gain 0.7%. The Dow Jones 30 rose 0.6%. Volume is running higher vs. the same time Tuesday on both main exchanges.
The Nasdaq 100 jumped 1.4%. Strength in internet content, diversified operations, gaming software, semiconductor equipment, tech services and medical software firms paced the upside.
Nonalcoholic beverage, farm equipment, superregional banking and banking stocks from the West, Midwest, Northeast and Southeast all fell hard. The yield on 3-month T-bills is now slightly higher than 10-year bonds, likely pinching profit margins on interest-rate products for banks.
Innovator IBD 50 (FFTY) gained 1.1% and is hovering right below its 50-day moving average.
Top Stocks Muscle Higher
Match (MTCH), Mastercard (MA), PayPal (PYPL), Inphi (IPHI) and Zoom Video Communications (ZM) have all rallied past a proper buy point within the past few weeks. Most have gotten extended beyond the 5% buy zone.
Zoom Video rolled nearly 7% higher and is trading sharply above a 74.27 buy point in a narrow IPO base.
But Mastercard, now a full-size position in IBD Leaderboard, is tickling the top end of its buy range after rebounding off the 10-week moving average at 240.63.
PayPal, the ubiquitous electronic payments service and owner of the Venmo peer-to-peer transactions innovator, is highlighted in today’s IBD 50 Stocks To Watch.
CyberArk (CYBR) also showed no lack of institutional demand. A day after posting terrific Q1 results (EPS up 75% to 56 cents share, revenue up 34% to $95.9 million), the stock is fighting to hold above its rapidly rising 10-week moving average.
The security software play and expert in privileged account access joined Leaderboard on Jan. 28 following a sound breakout past an 81.98 entry point, then got removed from the Leaders list ahead of Tuesday’s results.
A New Leader In The Dow Jones
Even a few components within the Dow Jones Industrial Average are taking a swipe at the bears.
Walt Disney (DIS), which has thrown down the gauntlet with its upcoming Disney+ streaming service, continues to keep its bullish gap-up in price in April. Shares rallied 1% to 134.60 and trade just 5% below its all-time high of 142.37.
Watch for a potential new base to form.
A correction of 15% less from that 142.37 peak could result in a new flat base.
Interestingly, the Street is overlooking rather droll profit estimates for the Burbank, Calif., operator of massively popular theme parks and multimedia entertainment juggernaut.
Analysts polled by Refinitiv see earnings slumping 7% to $6.57 a share this year and wilting another 2% to $6.44 in 2020. Yet the company continues to have massive operating cash flow and growth on the top line.
Operating cash flow of $9.35 a share in 2018 well exceeded the $7.08 it earned the same year. Revenue rose on average 6% vs. year-ago levels in the past six quarters.
According to IBD Stock Checkup, Disney gets a solid Relative Strength Rating of 92 and a so-so Composite Rating of 80 on a scale of 1 (wicked) to 99 (wonderful).
In Other Financial Markets
Crude oil futures rebounded 0.4% to $62.04 a barrel; U.S. crude prices hold a 36.6% gain since Jan. 1. The yield on the benchmark 10-year U.S. Treasury bond dipped to as low as 2.38%, down sharply from 2.52% on May 1.
Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, chart analysis, breakouts and financial markets.
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