Initial gains stalled in weak trade Monday, leaving the market's momentum narrowly intact.
X General Electrical (GE) and Caterpillar (CAT) hauled the Dow Jones industrial average up 0.3%, easily taking a new high and adding a seventh day to the index's advance. The S&P 500 clawed its way to a 0.2%, also a new high and gaining some margin above the 2500 level. The Nasdaq recovered to a 0.1% gain, following a late afternoon dip, ending just below new high territory.
Small caps easily outperformed in Monday's action, with the Russell 2000 taking a 0.7% gain and posting its sixth gain in seven sessions.
Volume was lower than during Friday's session — no surprise because Friday was a day of options and futures expirations called a quadruple-witching session, which generally means a surge in volume.
Some strong bank lending date for August triggered a rally in China. Europe's markets borrowed from that momentum and from a positive start to the U.S. trading session. Monday's oil prices were flat. Gold dipped 1% to $1,311 an ounce. Natural gas spiked 4% to $3.15 per million British thermal units. The National Association of Home Builders reported its Housing Market Index fell to 64 for September, down from an initial estimate of 68 for July and below consensus views for a dip to 66.
Homebuilding stocks nevertheless gained ground, with Taylor Morrison (TMHC), NVR (NVR) and Toll Bros. (TOL) all up more than 1% apiece. IBD 50 stock LGI Homes (LGIH) rose 0.9% as it moves up the right side of a basing pattern with a possible buy point at 50.05.
Fiber optic telecom stocks posted the session's best gain among the 197 industry groups tracked by IBD. Applied Optoelectronics (AAOI) was the pacemaker, soaring 14% and giving the stock a nice boost up the right side of a possible basing pattern.
Caterpillar ran up a powerful 1.9% gain after a UBS upgrade to buy, from hold. But still placed second among Dow industrials. General Electric took the brass ring, up 2% but still 24% below its December high.
Apple (AAPL) gave up its early advance and backslid to a 0.9% decline. That left shares a mere 1% above its 156.75 buy point after clearing that entry in early August.
Netflix (NFLX) climbed 0.6%, the only FANG stock to gain ground as Amazon.com (AMZN) dropped 1.5% and Facebook (FB) took a 1% tumble. Netflix ended 4% below its 191.60 buy point. Amazon is 11% below its potential buy point. Both are IBD Leaderboard names.
Internet of Things specialist Silver Spring Networks (SSNI) bolted 24% higher after Itron (ITRI) said it would pay roughly $830 million to acquire the firm. Itron shares rose 5% and other stocks in the space also felt some of the updraft, with Extreme Networks (EXTR) jumping almost 5% and Arista Networks (ANET) ending 4% higher.
Chip developer Nvidia (NVDA) gapped up to a 4% gain on a handful of positive analyst reports. The gain left the IBD 50 stock extended above a 174.66 buy point in a flat base.
Chip equipment makers also posted a solid session, as Applied Materials (AMAT) rose 2% and ASML Holdings (ASML) climbed 3% after upgrades from analysts. Applied Materials ended Monday in a buy range, above a flat base buy point at 47.69.
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