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Dow Rally Led By Walmart, American Express, Caterpillar As Hot IPO Zscaler Soars | Stock News & Stock Market Analysis

The stock market looked poised to end the week on solid ground Friday as several Dow stocks outperformed with gains of around 1% more.

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Outperformers in the Dow included Walmart (WMT), American Express (AXP) and Caterpillar (CAT), although they’ve been lagging the market in recent weeks. Walmart is trying to hold long-term support at the 200-day moving average, while American Express and Caterpillar have been getting turned away at their respective 50-day moving average lines.

The Dow Jones industrial average was up 0.4%, the S&P 500 added 0.2% and the Nasdaq composite was mostly flat. Small caps fared the best, with the Russell 2000 up 0.5%.

Options expired today, resulting in unusually heavy volume. Volume on the NYSE and Nasdaq was tracking higher than Thursday’s levels compared to the same time yesterday.

In IPO news, Zscaler (ZS) priced last night at 16, above the proposed range of 13-15. Shares opened at 27.50 and were trading around 30.96. The provider of cloud-based network security solutions isn’t profitable yet, but the company reported sales of $45 million in its latest quarter, up 53% from the year ago period. Separately, the highly-anticipated Dropbox IPO is scheduled to price Thursday and start trading under the ticker DBX. The proposed range is 16-18.

In the stock market today, Adobe Systems (ADBE) outperformed, rising 3%, after reporting another strong quarter late Thursday. Earnings of $1.55 a share handily beat expectations. Sales rose 24% to nearly $2.08 billion, marking the 11th straight quarter of 20%-plus sales growth; pretty impressive for a company with a market capitalization north of $100 billion. Adobe is well-extended after a breakout from a base in January and is a member of the Leaderboard portfolio of top-rated growth stocks.

The market’s response to Broadcom‘s (AVGO) earnings wasn’t as good as shares gave up 4.5% to 255.45. Earnings topped expectations but sales guidance for the current quarter was mostly in-line with expectations.

Heavy-volume gainers included small-cap Smart Global (SGH). With a market capitalization slightly below $1 billion, it’s on the speculative side, but the emerging leader in IBD’s data storage group cleared a base with a 43.25 buy point. Shares jumped 5.5% to 44.50.

Inside the IBD 50, Warrior Met Coal (HCC) is getting support at the 50-day moving average for the second time after a breakout from a base late last year. Shares rose 3% to 30.02. The company has delivered strong sales growth in recent quarters, but annual earnings are expected to decline in 2018 and 2019.

Also in the IBD 50, Five Below (FIVE) added 0.7% to 69.13 ahead of next week’s earnings report. Results are due Wednesday after the close. The stock sells at a premium to many of its industry group peers, but deservedly so due to a consistent track record of big earnings and sales growth in recent quarters, plus strong annual earnings estimates. Fiscal 2018 profit is seen rising 38% from 2017 with growth of 32% expected in 2019. Five Below was featured in this week’s Earnings Preview column.

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