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Stocks Pare Gains; Netflix Up On Bullish Views

Canaccord Genuity analysts put a buy recommendation on Netflix on Friday. (AP)

Stocks were off session highs but still up for a fourth straight session after a manufacturing report spurred indexes higher, with internet stocks such as Netflix (NFLX) and Amazon.com (AMZN) rising in active trading.

The Nasdaq climbed 0.3% in afternoon action as rallying biotechs gave the composite a boost. The S&P 500 and the Dow Jones industrial average added 0.1% each. The Dow transports surged 0.6%. Volume was tracking lower ahead of the three-day weekend.

Energy, metals, retail and cyclical stocks led the market.

The Institute for Supply Management's index of manufacturing activity rose to 53.2 in June from 51.3 in May. It was the fastest pace in more than a year and the fourth straight month of expansion. The June figure also topped economists' forecasts.

Construction spending fell 0.8% in May, more than was expected, but construction stocks were mostly higher anyway.

There was another breakout in the building sector after Beacon Roofing Supply (BECN) topped the 45.82 buy point of a flat base in heavy trading. The chain of roofing and other building products has a lofty 96 Composite Rating from IBD.

Eagle Materials (EXP) rose as high as 79.75 but later pared its gain to less than 1% at 77.73. The building products supplier has climbed back above its 50-day moving average. It is forming a long cup with handle with an 83.10 buy point. LGI Homes (LGIH) climbed 2% and is extended from a 29.42 buy point.

Netflix climbed 5% in heavy volume after Canaccord Genuity initiated coverage of the stock Friday with a buy recommendation and a 120 price target, which is 25% above where shares are now.

"We think Q3 may also bring more modest growth, given tougher comps and a few temporary headwinds," analyst Michael Graham said in a research report. "That said, our analysis suggests a long runway for international sub growth in Q4 and beyond, and we believe this is the key metric for the stock through next year at least." Netflix, he added, should have a strong Q4 and 2017-18.

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Netflix shares are in a seven-month-old correction amid a string of weaker profits.

Amazon.com rose more than 1%, although volume was tailing off from a higher pace early on in the stock market today. The stock is rising from support at its 50-day moving average, a follow-on buy area.