Stocks clocked out with healthy gains Tuesday, in a second session cut from the bullish weak-start/strong-finish pattern.
The Dow Jones industrial average added 0.7% and broke an eight-session pullback, its longest string of daily declines in a half-decade. The S&P 500 chiseled a 0.7% gain and the Nasdaq climbed 0.6%. Small caps kept pace with the general action, leaving the Russell 2000 up 0.7%.
Tuesday's moves showed the Dow and the S&P 500 finding support at their 50-day moving averages, although trading volume in both cases was weak. The Nasdaq rebounded from its 50-day line Monday and extended that gain Tuesday.
Shipping fleets took the day's largest gain among industries, with Star Bulk Carriers (SBLK), Safe Bulkers (SB) and Golden Ocean Group (GOGL) all surging more than 9% on upgrades to overweight from Morgan Stanley.
Seven Dow industrial stocks booked gains better than 1%. Apple (AAPL) led the group, popping 2% to a new high but remaining in a buy range above a 141.12 buy point in a three-weeks-tight pattern. Caterpillar (CAT), JPMorgan (JPM) and Goldman Sachs (GS) were next in line.
Amazon.com (AMZN) rose more than 1% during the session, as Stifel Nicolaus raised the stock's price target, to 1025, from 912, after the company reached a deal to buy Souq.com, reportedly one of the largest e-commerce operations in the Middle East. Amazon shares continue to trade below a four-weeks-tight buy point of 860.96.
Darden Restaurants (DRI) and Red Hat (RHT) carried the strongest gains among S&P 500 stocks, both opening strong after reporting quarterly results.
Darden gapped up and gained 9% to clear a cup-with-handle base in huge volume. The cup with handle is a common bullish pattern. Darden topped the Street's estimate on quarterly earnings and raised guidance.
Red Hat scored a 5% gain after reporting a solid fourth-quarter beat late Monday. The stock is testing 10-week support in the fifth week of a shallow consolidation.
Charles Schwab (SCHW) topped the IBD 50 list, rising nearly 3% in weak trade. The stock is battling to recover support at its 50-day moving average after dropping almost 14% from its March 17 high.
Dave & Buster's Entertainment (PLAY) posted a 2% gain and Ollie's Discount Outlet (OLLI) added 1% during the regular session. Both were scheduled to report quarterly results after the close.
Tuesday's losses were generally moderate. Seasonings maker McCormick (MKC) took the S&P 500's hardest hit, down 3% in strong trade. The stock is shaping a possible handle on an eight-month cup base. McDonald's (MCD) and Johnson & Johnson (JNJ) were the only two decliners on the Dow, down a fraction each.
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