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Stock Market, Nasdaq Rise On Retail Data; Two Chip Stocks Break Out

U.S. stock indexes advanced moderately in late morning trade Thursday, as retail sales grew the most in six months and first-time jobless claims were fewer than expected.

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In the retail sector, stocks working on bases include upscale steakhouse Ruth’s Hospitality Group (RUTH), Floor & Decor (FND), restaurant chains Texas Roadhouse (TXRH) and Wingstop (WING), and farming and ranching supply store operator Tractor Supply (TSCO).

The Nasdaq advanced 0.8%, while the S&P 500 added 0.3% and the Dow Jones industrial average was flat. Small caps trailed as the Russell 2000 was just below the break-even line.

Volume rose slightly vs. the same time Wednesday on both major exchanges.

High-end steakhouse restaurant Ruth’s stock is working on a flat base with a 28.85 buy point. The small cap grew earnings 42% and 29% in the past two quarters. Earnings are expected to grow 24% this year, which would be the best in six years.

Retail sales set a bullish tone for the stock market, rising 0.8% in May. That was twice as much as the upwardly revised 0.4% in April and the fastest growth in six months. Going into Thursday’s session, the retail sector was up 14.6% year to date, which was No. 6 among 33 sectors.

In other news, the European Central Bank said quantitative easing would likely end in December rather than September. A rate hike is unlikely to come before the summer of 2019, according to the ECB. Analysts saw the moves as a compromise between the hawks and the doves.

Meanwhile, China threatened to junk U.S.-China trade deals if the Trump administration does not step away from its protectionist stance.

Stock Breakouts

Three stocks were either breaking out or attempting a breakout Thursday morning.

Chip-equipment maker Brooks Automation (BRKS) crossed above a 34.04 buy point in a large cup with handle in volume 107% above average. The stock is No. 1 in its group in Stock Checkup at Investors.com.

Fellow chip-equipment maker ASML Holding (ASML) rose just above a 216.10 proper buy point in a flat base, but then eased under the entry. Volume was initially running 65% above average but has slowed down to just mildly above normal levels.

April initial public offering Ceridian HCM Holding (CDAY) rumbled 9% higher, clearing a 38.97 buy point but then reversed to a 3% loss. Ceridian provides a software platform for managing the entire employee life cycle.

For tips when investing in IPOs, see this Investor’s Corner article on why an IPO breakout may take more than one try.

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