Dow Jones Leads Gains Among U.S. Stock Indexes

U.S. stock indexes swung back and forth in afternoon trade Monday, unable to build lasting confidence among traders in the stock market today.




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Blue chips led as the Dow Jones industrial average advanced more than 1%, while the S&P 500 and Nasdaq added around 0.8% each. Small caps in the Russell 2000 edged up nearly 0.2%.

Volume in the stock market was lower on both major exchanges. Declining volume is normal in the Christmas/New Year’s period.

In the 30-component Dow Jones, most stocks were up. Goldman Sachs (GS) posted a 1.7% gain but the stock remains almost 40% off its high. Goldman’s chart has a ton of work to do. The stock needs to establish a 30% prior uptrend and then sketch a base.

Goldman Sachs has plenty of company within the Dow Jones. Apple (AAPL) is 32% off its high; IBM (IBM), 34%; DowDuPont (DWDP), 31%; Caterpillar (CAT), 27%; 3M (MMM), 27%; and United Technologies (UTX), 26%.

IBM has had its troubles. Big Blue’s five-year growth rate shows no growth in either revenue or earnings. Revenue and earnings both show a shrinkage rate of -5%.

Can IBM Recover In 2019?

IBM’s dividend has been increased 23 years in a row and currently yields 5.6%. The stock price dropped 8% in 2017 and is on track for a 26% decline for 2018. Can IBM turn things around? The Street will be waiting to see how IBM’s acquisition of Red Hat plays out. The acquisition is expected to be completed in the second half of 2019.

In the IBD 50, a list of the best stocks in fundamentals and technicals, variety store chain Five Below (FIVE) rose about 3% in quiet trade. Five Below recently retook its 200-day line and is now closing in on the 50-day line, as well as the 10-week moving average as seen on a weekly chart.

Five Below’s last breakout occurred in July, but the current consolidation undercut the low of the previous base. The base count is back to first stage. Five Below appears to be sketching a double-bottom base with a 125.85 proper buy point.

Are Lows In On U.S. Stock Indexes?

The stock indexes appeared to have set closing lows Dec. 24. While it isn’t clear if those lows can hold, it’s not too early to ask who is leading the rebound.

Stocks that have posted good gains since Dec. 24 include Netflix (NFLX), up 14%; business software provider ServiceNow (NOW), up 13%; MercadoLibre (MELI), up 13%; Amazon.com (AMZN), up 13%; chip equipment maker Applied Materials (AMAT), up 12%; and Chipotle Mexican Grill (CMG), up 11%.

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