X Investors brushed off concerns of a slowdown in consumer prices and most key indexes gained on Monday. But the Dow Jones industrial average edged 0.1% lower on the back of 1-point drops or more by at least 4 of the Dow industrials' 30 components.
The Nasdaq composite led the rally, rising 0.7% for the day, while the S&P 500 rose nearly 0.2%. Volume fell on both main exchanges, according to preliminary data.
The Dow Jones transports slipped 0.3%.
Last week, the S&P 500 large-cap benchmark rallied 1.5%, on top of a nearly 0.9% lift in the prior week. The Nasdaq had risen more than 4% over the prior two weeks, a clear signal that money continued to flow in the technology sector.
In a heavy day for economic data, even bond investors didn't seem overly concerned about a surprise 0.1% dip in the March PCE prices gauge, excluding volatile energy and food prices, the first month-on-month drop since September 2001, according to Reuters. Plus, in the 12 months through March, the PCE index was up just 1.6%, vs. up 1.8% through February.
The Federal Reserve has made it widely known that it wants to see inflation hitting at least 2% before taking more steps at reducing liquidity from the banking system. On Monday, meanwhile, investors sold U.S. government bonds hard; the yield on the 10-year Treasury bond inched up to 2.32%. The spread between the 2- and 10-year yields have slimmed a tad over the past 30 days.
The interest-rate-sensitive Dow Jones utility average fell nearly 0.7%.
Back to equities, looking at IBD's rankings of 197 industry groups, four of the top 10 groups come from the telecom and tech sectors (wireless services, semiconductor equipment, computer networking and computer data storage).
Other top groups within the top 20 included the gaming group, which has vaulted from No. 80 to No. 13 over the past six weeks. Restaurants have jumped from No. 82 to No. 17 over the same time frame, while the lodging group has risen from No. 70 to No. 14.
Among the four tech groups mentioned above, these names have stood out.
Brooks Automation (BRKS) was up more than 5%, to 26.76, in heavy volume. The expert in automation and cryogenic systems for chipmakers and life sciences companies is extended sharply after a successful rebound off the 10-week moving average, near 16.90, in late January.
Brooks also has been highlighted in the IBD Stock Spotlight.
Western Digital (WDC) was down 1% to 87.97. The stock probed 52-week highs on Friday and has overall done well since it burst past an 81.77 flat-base buy point March 30. The stock is up almost 30% year to date, and harbors an A- Accumulation/Distribution Rating from IBD Stock Checkup.
Western gets a superb 99 Composite, the maximum allowed, from IBD Stock Checkup, as well as an A for SMR (Sales + Profit Margins + Return on equity) Rating on a scale of A to E.
Lam Research (LRCX) was up nearly 3% to a new high of 148.85. Shares are extended and it could be weeks before another entry develops. EPS growth in Q1 accelerated to 137%, up from gains of 20%, 0% and 43% in the prior three quarters, as sales rose 64%.
Lam has been a fixture on the IBD Big Cap 20 (see the Stock Lists section on Investors.com) for several months, and currently ranks in the top 10 within the IBD 50.
Other chip equipment names with outstanding Composite Ratings and excellent stock price action include ASML Holding (ASML) (broke out past an 110.24 early entry in late December, 2nd test of the 10-week moving average), and Applied Materials (AMAT), part of IBD Big Cap 20.
Also in the group, Cabot Microelectronics (CCMP) is trading at new highs. But its recent pullback has produced a faulty cup base that falls short of the six-week minimum. Notice on a weekly chart how Cabot has gone two weeks down, then two weeks up into new high ground.
At the same time, the 9.3% drop within the narrow consolidation was perhaps not enough to justify the V-shape-like action as an outright sell signal.
Cabot faces a tough comp in fiscal Q3 earnings as profit grew 103% in the year-ago quarter that ended in June. Q3 profit this year is seen rising 5% to 83 cents a share.
Among the fast-rising nontechnology groups:
Chipotle Mexican Grill (CMG) was up more than 1% to 479.29 as it made a rebound off Monday's session low. The stock has climbed sharply in recent weeks, and last week the taco-and-burrito chain marked a solid Q1 rebound in profit ($1.60 a share on an adjusted basis) and revenue ($1.07 billion, up 28%, the largest gain in 10 quarters).
The strong top-line result indicated that Chipotle is winning back trust among its customers. In Q1, the Denver-based firm, with founder Steve Ells now back as sole CEO, added 57 new shops while closing 15 ShopHouse Southeast Asian Kitchen restaurants and one Chipotle restaurant. Total restaurant count on March 31 reached 2,291.
Chipotle arguably broke out of a first-stage bottoming-base pattern at 434.79 at the end of March and also is extended.
The Denver-based fast-casual dining pioneer sports a decent 77 RS Rating; other high-quality companies in IBD's Retail-Restaurants group with even better RS Ratings are Dave & Buster's (PLAY) at 83; Restaurant Brands (QSR) at 84; and Yum China (YUMC) at 87.
Shares went public on Nov. 1 and ended their first trading session on the NYSE at 26.19.
The Street expects earnings to grow 17% this year to $1.41 a share and 11% the next.
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