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Nasdaq Closes At New Record, But Alphabet Lower After Earnings

The stock market closed with the Nasdaq advancing for the 11th time in the past 12 days and reaching another record high.

X The composite climbed 0.4% with the aid of software, biotech, fiber-optic and other Nasdaq-heavy industry groups, which led the market.

However, Alphabet (GOOGL), one of the Nasdaq's largest components, fell more than 2% in after-hours trading after Google's parent company announced non-GAAP earnings of $8.90 a share and revenue of $26.01 billion. The consensus estimate was gross revenue of $25.64 billion and net revenue of $20.9 billion, with adjusted earnings of $8.25 a share. Shares closed regular trading Monday at 998.31, near a potential buy point at 1008.71.

The S&P 500 fell 0.1% for a third consecutive minor loss. The Dow Jones industrial average lost 0.3%. General Electric (GE) fell 2% more after sliding 3% Friday on a disappointing outlook. GE shares are at October 2015 lows. But another Dow component, Travelers (TRV), acted bullishly as shares found support at the 50-day moving average.

Volume was lower, according to early numbers. Winners led losers by 7-to-6 on the Nasdaq but on the NYSE losers led 5-4.

Fiber optics were one of the top-performing industry groups as two of the group's leaders added to their advances.

Applied Optoelectronics (AAOI) climbed 6% to a new high in about double its usual volume. Needham & Co. raised its price target on the stock to 115 from 100, saying it expects strong Q2 results and guidance when Applied announces results Aug. 3. A Needham analyst also downplayed Applied's heavy customer concentration on Amazon.com (AMZN).

Lumentum Holdings (LITE) climbed past the 67.40 buy point of a base-on-base pattern in heavy volume. The relative strength line made a new high also. While that's a bullish sign, investors must bear in mind that the stock is clearing a late-stage base, meaning the chances of a sizable price advance is much less likely than in was in earlier bases.

Other breakouts lacked much force Monday. Chemours (CC) edged past the 46.12 buy point of a cup without handle. Volume was tracking about 40% less than normal, which was another limp characteristic of the breakout attempt.

The maker of industrial chemicals has been turning itself around after earnings per share declined for six quarters in a row in 2015-16. Sales rose 11% in Q1 after at least 17 quarters of year-over-year declines. Analysts expect 2017 profit to surge 226%.

Fabrinet (FN) made a modest move past a 46.68 buy point of a cup-with-handle base. A Barron's article says a deal by Macom (MTSI) and Fabrinet to supply Amazon with some fiber-optic technology poses a threat to some fiber-components makers such as Applied Optoelectronics.

The toys and hobbies industry group was Monday's worst, down more than 9% after Hasbro (HAS) plunged 9% in huge volume after sales missed expectations. The stock pierced its 50-day moving average as 5.6 million shares changed hands, more than seven times its 50-day average. The severe decline justified taking profits by recent new shareholders.

Some retail, energy and apparel groups also faltered.

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