A rally in semiconductor stocks lifted the Nasdaq composite to a gain of 1% in afternoon trading Wednesday. Micron (MU), Applied Materials (AMAT), Microchip (MCHP) and Lam Research (LRCX) were top gainers in the Nasdaq 100, but all four remain damaged goods after sharp sell-offs. The Dow Jones added 0.6%, helped by strength in Apple (AAPL) and Microsoft (MSFT).
The S&P 500 was up 0.7%, and the Russell 2000 small-cap index tacked on 0.8%. Volume on the NYSE and Nasdaq was tracking close to Tuesday’s levels (For updates on this story and other market coverage, visit the Stock Market Today page.)
In afternoon trading, the Nasdaq was poised for its ninth gain in 10 trading sessions. A pullback wouldn’t be out of the ordinary at this point. If it comes in light volume, even better. The S&P 500 and Dow Jones, meanwhile, are also approaching their 50-day moving average lines. Both are potential resistance levels to watch.
Dow Jones Gainers
Shares of Apple rose 1.9%. Reports that the company plans to cut its iPhone production by 10% were offset by positive comments from Morgan Stanley. The FAANG stock is trying to make a case that it’s hit a bottom, but it’s not a convincing one yet. Why? Its recent gains have come in light trade. In other words, bulls looking for renewed signs of institutional buying have been disappointed so far.
Microsoft, meanwhile, was on pace for its fourth straight gain. Shares were up 1.7% but still below the 50-day line.
In the stock market today, Constellation Brands (STZ) looked a little hungover after the company reported earnings and gave a disappointing outlook. Shares crashed 10.5%. Constellation invested $4 billion in marijuana company Canopy Growth (CGC) last year amid a drop in global alcohol consumption.
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Shares of Chipotle were up 0.6% to 500.61 as it continued to try to break out with conviction over the 500 level. It has the look of a turnaround story, with accelerating sales growth in recent quarters, plus big annual earnings estimates. Full-year earnings per share are expected to rise 29% in 2018 and 40% in 2019. Fourth-quarter results are due Feb. 6 after the close.
Wingstop, meanwhile, is near the top of a consolidation with a 72.10 buy point. Shares rose 0.3% to 70.49. It was featured in a recent IBD 50 Stocks To Watch column.
The IBD 50 delivered plenty of strong gainers Wednesday, helping the Innovator IBD 50 ETF (FFTY) to a gain of around 1.3%. But big gains by Illumina (ILMN), China-based ZTO Express (ZTO) and Medpace (MEDP) did little to improve the charts of each.
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