Stock Indexes Reverse To Session Lows, But Wingstop Shines | Stock News & Stock Market Analysis

U.S. stock indexes slouched in early afternoon trading, reversing from early gains of 1% or now to session lows.

The market pullback that began after Jan. 26’s peak, and turned more aggressive this week, has damaged the bulls’ confidence.

X The Nasdaq fell 1.2%, while the S&P 500 lost 1%. The Dow Jones industrial average subtracted 1.3%.

Volume in the stock market today was up vs. the previous session’s pace.

If individual investors are looking for a stock that is defying the market’s pullback, they might settle on chicken restaurant chain Wingstop (WING). The stock’s relative strength line — which measures a stock’s performance vs. the S&P 500 — is at a new high. Wingstop is about 3% off its high and has moved sideways during the market’s dive, in tight trading that may result in a new pattern.

The small-cap company’s pretax margin was 29.5% in 2016, the highest in five years. After-tax margin has been running at 19% to 25% in the past three quarters.

Wingstop will report Q4 and full-year 2017 results after the close Feb. 22.

The Street expects earnings to grow 7% in Q4 and 26% for the full year. Estimates for revenue growth run at 11% for Q4 and 14% for the full year.

IBD’S TAKE: The stock market is now in a correction. Read our cover story on why stocks sold off and what you should do now.

Nursing facilities operator Ensign Group (ENSG) provided one of the few breakout attempts. The small-cap stock surged 8% in the first 25 minutes of trade and then pulled back to a near-6%% gain. Ensign was just above a 24.88 buy point, but a poor market makes any stock purchases extra risky.

Ensign is thinly traded, but Wasatch Core Growth Fund (WGROX), which is A-rated by IBD, owns the stock.

Among IBD’s 197 industry groups, the day’s winners were a mixed bunch. Chip designers and apparel manufacturers rose. But defensive issues also attracted buying, including food, tobacco and electric utility stocks.

Utilities’ Rich Payouts

The electric utilities group is about 15% off its early December high. Southern Company (SO) is 17% off its high, a decline that has boosted its annualized dividend yield to 5.3%. PPL Corp. (PPL) is 25% off its high, lifting the yield to 5.4%.

Losers for the day included travel bookers and automakers.

Meanwhile, Congress ended a brief government shutdown and President Trump signed legislation that approved a two-year spending plan. This is expected to end the usual cycles of threats of a government shutdown.


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Originally posted 2018-02-10 21:58:05.


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