U.S. stock indexes battled midday Friday to escape a recent small-ball pattern, but the Nasdaq eased off its high for the day.
XAutoplay: On | OffThe Nasdaq popped 0.4% in the first hour of trade but then eased to a 0.3% gain. The S&P 500 and the Dow Jones industrial average added 0.2% each. The small-cap Russell 2000 lagged with a less than 0.1% gain.
Volume in the stock market today was higher on the NYSE but lower on the Nasdaq vs. the same time in the previous session.
The major stock indexes have played small ball — timid gains and timid losses —since a strong move Oct. 5. Part of the caution may be because of earnings season, which is just getting underway.
So far this week, a handful of major banks reported quarterly results. The stocks haven’t moved much despite generally better than expected earnings and revenue.
On Friday, Alphabet (GOOGL) climbed above a 1,006.29 buy point. Volume was 36% above average. Alphabet’s base is first stage. As a stock rises, it pauses to consolidate. Breakouts from the first two patterns are more likely to work than those from later consolidations.
Alphabet, the parent company of Google, will report third-quarter results Oct. 26. The Street expects earnings to grow 15% on a revenue gain of 21%.
In the IBD 50, a list of some of the best stocks in fundamentals and technicals, advancing issues led declining issues by a 7-to-3 ratio. Big gainers included electronics parts provider Kemet (KEM), which rose 5% to a new high; and chip equipment maker Ichor (ICHR), which added 2% as it scored a new high.
On the downside, managed care provider Centene (CNC) gapped down 5%, piercing its 50-day line in huge volume. President Trump’s executive order would clear the way for small businesses to join together to get better prices for health insurance.
Centene provides health plans through Medicaid, Medicare and ObamaCare.
Other companies are expected to benefit from Trump’s order, if the order withstands legal challenges. Online discount insurance and benefits plan provider Health Insurance Innovations (HIIQ) rose 2%. The stock is on track for its ninth gain in the past 11 sessions.
Meanwhile, health savings accounts provider HealthEquity (HQY) has added a handle to its base. This lowers the potential buy point from 55.05 to 52.97.
Among IBD’s 197 industry groups, oil drillers, steel makers and retail held the day’s biggest gains. Medical groups were taking most of the hardest hits.
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