Stock Market Today: Dow, Financial Stocks Strong, Apple Steady; Time To Buy Alphabet? | Stock News & Stock Market Analysis

Blue chip stocks led the field on Monday but techs slumped in the first full trading day that followed the Senate’s passage of a historic bill to rehaul the U.S. tax code. Banking and financial services firms showed mettle.

X Meanwhile, Apple (AAPL) remains slightly out of buy range following its latest move out of a cup with handle at 160.97. Shares dipped less than 0.3% to 170.59 and volume is just minimally higher than average.

Such action is normal following a solid two-week run post-breakout that sent the largest company on U.S. stock exchanges by market cap up from the 160.97 buy point to a new high of 176.24, good for a 9.5% advance. At 170.59, the stock is still slightly out of the 5% buy zone.

The Dow Jones industrial average rose nearly 0.6% while the S&P 500 was up just 0.2%. Chip, chip equipment, gaming software, desktop software, specialty enterprise software and computer networking gear firms weighed on the S&P 500. The Nasdaq composite, which fell 0.6% last week, lost another 0.6% on Monday.

The Dow transports rallied 2.3% on the back of hopes that a major tax cut for corporations will spur further investment in new products, equipment orders and increased infrastructure spending.

Volume is running lower vs. the same time on Friday on the NYSE and was nearly breakeven on the Nasdaq.

Alphabet (GOOGL) is down for a fifth session in a row, sinking nearly 1% to 1,015.53 and testing its 50-day moving average. The Google search engine operator’s breakout from a flat base at 1,006.29 had reached 7%, but now that gain is less than 1%.

At this point, an investor can watch and wait to see if fund managers show renewed buying appetite for the megacap tech.

The Nasdaq 100 is down 0.6%.

Some new issues, particularly in the building and consumer spending areas, are showing either nice gains or trying to preserve their uptrends with tests of support at key price levels.

Floor & Decor (FND), which was highlighted in a recent IBD Weekly article on new IPO leaders over the past 24 months, gapped up bullishly and rallied more than 5% to 43.55 in heavy volume, good for a five-month high. The expert in flooring materials is working on the right side of a new cup-type base. The left-side high is 46.99, and the Smyrna Ga.-based firm is now just 7% below that peak.

Watch for a potential handle to form. A handle must be a minimum five trading sessions in length and should slant lower along the price lows, not higher. You want a healthy shakeout of weak, uncommitted holders before a breakout takes place.

Analysts on consensus see Floor & Decor’s earnings rising 16% to 66 cents a share in 2017, then accelerating with a 29% gain to 85 cents next year.

Square (SQ) cut early losses but is still down nearly 3% to 37.17. Volume looks poised to double vs. its 50-day average of 15.6 million shares. The point of sale transaction technology innovator still holds a solid gain of 32% after clearing a flat base at 28.07 in October. But a break of an upper channel last week indicated that Square needs some time to cool off and consolidate its big gains.

The Street sees fourth-quarter earnings rising 40% to 7 cents a share, following EPS increases of 250% and 600% in the prior two quarters.

Elsewhere, crude oil futures fell as the U.S. dollar rose. The yield on the benchmark U.S. Treasury 10-year note was around 2.38%, up from a Sept. 7 near-term low of 2.05%. Higher interest rates likely improve the net interest margins for certain lenders.

Financial brokers, meanwhile, would likely be able to earn more interest-related revenue on margin loans.

LPL Financial (LPLA) hopped more than 3% higher to 54.76, surpassing a 54.02 buy point in a flat base in heavy volume. The financial advisor has strung together three quarters in a row of single-digit revenue growth following a six-quarter drought in sales.


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Originally posted 2017-12-05 10:40:20.


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