Dow Jones Keep Weekly Loss Small; Will Apple, Disney Outperform Intel In 2019?

Leading chipmakers sold off hard in stocks today, yet major indexes held their ground. Strong weekly gains by the S&P 500 (up around 1%) and the Nasdaq composite (up more than 1.6%) more than offset a less than 0.3% weekly dip by the Dow Jones Industrial Average.




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Intel (INTC) — slammed 10% lower in heavy turnover after issuing a 2% gain in first-quarter earnings to 89 cents a share on zero revenue growth — gapped well below its rising 50-day moving average.

The Silicon Valley titan instantly surrendered months’ worth of gains.

Apple (AAPL), also in the 30-stock Dow Jones industrials, edged 0.5% lower but still posted a fourth straight up week.

At 204.30, the iPhone and digital services innovator remains in buy range after clearing a 197.79 proper buy point in a large first-stage cup with handle.

Once a stock breaks out, it’s best to buy shares before it advances more than 5% past the correct entry. Grabbing shares at a higher price than the 5% chase zone exposes an investor to a potential normal pullback and a quick paper loss.

Walt Disney (DIS) surged more than 5% for the week and posted a fifth straight weekly gain.

Shares have now jumped 20% past a 115.90 entry in a saucer with handle. The strong gain came within just three weeks, justifying a special IBD portfolio management rule: Hold the stock at least eight weeks during a confirmed market uptrend.

Holding top stocks for at least eight weeks allows holders to give such near-term stock market leaders a chance to become a giant winner and a potential long-term holding.

The multimedia and entertainment giant recently unveiled Disney+ to compete in the on-demand video entertainment market. Reports point to strong global box office sales for the first weekend of its Avengers: Endgame movie and popular superheroes series finale.

Watch Disney’s Composite Rating; Will It Rise Further?

Disney shows an improved and decent Composite Rating of 88 on a scale of 1 (dismal) to 99 (dynamite), according to IBD Stock Checkup.

Small caps outperformed not only on Friday but for the whole week. The S&P SmallCap 600 rose nearly 0.9% on Friday, good for a 1% weekly advance. Innovator IBD 50 (FFTY) advanced 1.8% for the week. At 34.55, the ETF extended its gain since Jan. 1 to 25%.

The U.S. Economy Is Growing

The market’s initial response to a 3.2% preliminary jump in U.S. first-quarter GDP was mild, yet it also helped keep the bears at bay. That increase represents an acceleration from a 2.2% annualized gain in Q4 last year.

“This blockbuster GDP report shows that President Donald J. Trump’s policies are unleashing the vitality of the American economy, fulfilling the President’s promise for 3% economic growth and benefiting American workers in the form of better jobs and higher wages,” Commerce Secretary Wilbur Ross said.

The 3.2% rise is the strongest for the first quarter of any year since 2015. It smashed a 2.3% forecast by Econoday and surpassed the highest estimate of +2.8%.

On the downside, World Wrestling Entertainment (WWE) fell for a third session in a row, losing 16% in the process. The stock is trying to halt the slide at its 200-day moving average. The company and former IBD 50 stock reported an adjusted net loss of 11 cents a share in Q1 on a 3% revenue dip to $182 million, according to data from IBD sister company William O’Neil + Co.

Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on top stocks and chart analysis.

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