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Stocks Mostly Up; Why Apple May Have More Thrust Left | Stock News & Stock Market Analysis

U.S. stock indexes sauntered to small gains midday Friday, with only small caps holding a losing hand for the week. Volume was running higher on the NYSE but flat on the Nasdaq.

X The Nasdaq and the S&P 500 added 0.3% and 0.1%, respectively, while the Dow Jones industrial average sagged 0.2%. The small-cap Russell 2000, which was on track for a loss for the week, rose 0.8%.

Breakouts midday Friday in strong volume included Signature Bank (SBNY), up 3% in volume 78% above average, and Lions Gate Entertainment (LGFA), up 3% in volume 330% greater than usual. Lions Gate has been rallying on word that the company is in buyout talks.

Investors also might want to monitor stocks that are either in buy zones or close to buy points. For example, despite rising 25% last year and 5% year to date, the 30-component Dow Jones industrial average still has some potential buy opportunities.

Stocks in their 5% buy zones include Goldman Sachs (GS), 3M (MMM), Apple (AAPL), Johnson & Johnson (JNJ) and DowDuPont (DWDP).

Dow stocks in bases and not far from potential buy points include Coca-Cola (KO) and Travelers Companies (TRV).

Of the above seven Dow stocks, four are expected to accelerate earnings growth in 2018. The four are Apple, Travelers, DowDuPont and Coca-Cola. Each has a base that is either first or second stage.

As a stock advances, it pauses to consolidate. Breakouts from the first two bases are more likely to work than those from later stages.

The base count is one reason why Apple may have more left as an investment. Also, Apple grew earnings 11% in fiscal 2017 ended in September, and the Street expects growth to pick up to 24% in fiscal 2018. While the 24% growth may be priced into the stock, earnings surprises offer the potential for additional thrust.

Meanwhile, among IBD’s 197 industry groups, three groups have shown uncommon strength this week.

Over the past five sessions, the chip equipment group jumped 7% (think of stocks such as Applied Materials (AMAT)), while the commercial document group popped 4% (think label company Multi-Color (LABL)) and the hotel segment rose 3% (think La Quinta (LQ)). The biggest loser for the week was office supplies, down 5%.

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