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Nasdaq Shows Resilience Despite Weakness In Semiconductor Stocks

The Nasdaq composite held up relatively well in afternoon trading Friday despite broad-based weakness in some semiconductor stocks. Applied Materials (AMAT) led a broad sell-off in chip-equipment stocks after reporting earnings and issuing a soft sales outlook. Shares plunged 7%. Lam Research (LRCX), ASML Holding (ASML) and KLA-Tencor (KLAC) also took hits in the group. Losses ranged from 2% to 3%.

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In late-afternoon trading, the Nasdaq and S&P 500 were lower by around 0.2%. The Dow Jones edged up 0.1%, helped by strong performances from Boeing (BA), Home Depot (HD) and Caterpillar (CAT).

Volume on the NYSE and Nasdaq was tracking close to Thursday’s levels even as options expired. Options expiration can sometime result in unusually high volume.

Breadth Still Solid On Nasdaq

Headed into Friday, the Nasdaq’s advance-decline line was near highs despite two declines in the prior three sessions. Healthy breadth is partly due to the strong performance of small caps in recent days. The Russell 2000 was on pace for its third straight all-time closing high Friday.

Meanwhile, three high-quality names got price-target hikes, but Netflix (NFLX), Alibaba (BABA) and Nvidia (NVDA) all lost ground. Losses ranged from 0.1% to 0.3%.

In stock market results today, PayPal (PYPL) was a nice winner, rising 2% to 80.87. The company announced plans to acquire European payments provider iZettle for $2.2 billion in cash. PayPal is approaching an 84.09 double-bottom entry. Shares of rival Square (SQ) initially fell on the PayPal news but recovered off session lows.

Heavy-volume gainers included New Relic (NEWR). Shares hit a new high, rising nearly 5%. The software firm specializes in data analytics. Shares gapped up last week on strong earnings and held gains after the gap up, a bullish sign.

Inside the IBD 50, small cap PGT Innovations (PGTI) cleared a flat base with a 19.70 entry, rising 5% to 20.42. The company is best known for its impact-resistant windows and doors.

China-based Baozun (BZUN) followed through after Thursday’s earnings-inspired breakout, rising nearly 3% to 54.91. It’s at the top of a 5% buy zone from a 52.43 buy point.

On the downside, shares of Baidu (BIDU) slumped 9% to 253.50 on news its COO is stepping down for personal reasons. Baidu hit a new high Wednesday but gapped down Friday. It’s now below a handle entry of 257.40.

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