Stock Market Today: Dow Jones Tops Key Stock Indexes As These Sectors Produce Breakouts | Stock News & Stock Market Analysis

The Dow Jones industrial average is capping a solid week of gains with a 1.5% advance Friday afternoon to help lead the major U.S. equity indexes. But more importantly, stocks in numerous sectors are showing strength following good breakouts.


Just one example: Tenaris (TS), the expert in steel pipes for the energy industry, burst out of a long cup with handle at 36.43 as shares rolled 2.5% higher to 37.09. Volume was running 150% above average, just what you like to see on breakout day.

Tenaris recently joined IBD Leaderboard. The Luxembourg-based company recently posted hot Q4 results (earnings per share up 575% to 27 cents, sales up 52% to $1.59 billion) and is expected to grow 2018 profit 42% to $1.09 a share.

Meanwhile, stocks in the leisure, internet, chip and medical sectors continued to command the upside.

Booking Holdings (BKNG), (WUBA), Bluebird Bio (BLUE) (extended past an aggressive entry at 215.10) and Google operator Alphabet (GOOGL) (forming a new cuplike base) all scored solid gains of more than 1% and continue to act as market leaders.

Booking, formerly known as Priceline Group, represents the strength of the airline, cruise and hotel markets. Shares posted a sixth straight gain, rising nearly 1% to 2,170 and edging nearly 5% past a breakout point of 2,068.09. Booking was highlighted in a Stock Market Today column earlier this week., the Craigslist of China and a former IBD Leaderboard member, is back above its 50-day line as shares jumped more than 6% to 82.41 in heavy turnover. Watch for a potential new cup base to form. The base’s left side peak is 87.65., now a mid-cap firm with a market value of $12 billion, has posted strong earnings in the past four quarters as revenue lifted 24%, 31%, 34% and 41% vs. year-ago levels in the same time frame.

The Street sees Q1 profit jumping 150% to 25 cents a share and rising 25% to $2.42 for the year, then accelerating 48% to $3.59 a share in 2019.

At 2 p.m. ET, the S&P 500 and the Nasdaq composite caught up with the 30-stock Dow, also gaining 1.5%. The small S&P 600 rallied 1.3% but is still trailing the 500 in year-to-date performance, up more than 3.3%. The 500 is up 3.9% since Jan. 1.

Volume is running mildly higher vs. the same time on Thursday in both main exchanges on Wall Street.

The Dow, which got scorched with a nearly 3.1% loss in the prior week, is close to recouping all of those losses. Watch to see if the blue chip index can retake its 50-day moving average.

The Nasdaq remains the leading index, striking new all-time highs. At 7532, the tech, medical, banking and retail-driven index is now up 9.1% since Jan. 1.

Which Steelmakers Will Lead Stocks Higher?

Going back to Tenaris, the stock enjoys a positive Accumulation/Distribution Rating of A- on a scale of A+ (heavy net buying by fund managers) to E (heavy net selling), as seen in IBD Stock Checkup.

The Accumulation/Distribution Rating helps offset Tenaris’ relatively weak EPS Rating of 79 and boosts the stock’s overall Composite Rating to a very healthy 95 on a scale of 1 to 99.

Keep in mind that commodity stocks can show big cyclicality in profits. Tenaris is no different.

Tenaris’ earnings peaked at $2.88 a share in 2012, then fell sharply over the next four years ($2.63 a share in 2013, $1.96 in 2014, a net loss of 17 cents in 2015, a net profit of 2 cents in 2016). Such a record certainly impacts a stock’s EPS Rating because IBD’s proprietary measure of profit growth takes into account three to five years’ worth of results, not just the past few quarters.

That dismal performance was likely tied to the severe drop in crude oil prices and a dismantling of exploration and production capacity in the industry. But now, WTI prices are aiming at making new multiyear highs and production is booming in North America.

Tenaris saw its earnings soar to 77 cents a share in 2017. The Street sees earnings rising 42% to $1.09 a share this year, and another 45% in 2019.

Revenue declined on a year-over-year basis for nine quarters in a row, through the first quarter of 2017. Yet since then, Tenaris has now grown the top line by 18%, 32% and 52% in the past three quarters. In Q4 of last year, net margin soared 760 basis points to 10.1%.

Amid a strong February U.S. jobs report, institutions sold long bonds. The yield on the benchmark U.S. Treasury 10-year note climbed to as high as 2.91%.

West Texas Intermediate oil futures shot 3% higher to $62.13 a barrel, trading 6% below the Jan. 26 peak of $66.14.

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(Please follow Saito-Chung on Twitter at @IBD_DChung for additional commentary and analysis on top growth companies, investing, entrepreneurs and financial markets.)


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Originally posted 2019-09-19 23:10:44.


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