Stocks closed broadly higher Monday, although the Dow Jones industrial average and S&P 500 came up a bit short in reclaiming their 50-day moving averages. Netflix (NFLX) rose after the close as the company announced results.
XThe Dow climbed 0.9% and ended slightly below its 50-day moving average. Getting back above that trend indicator would be a positive sign for the market, which continues to climb from a bottoming signal about a week ago. The S&P 500 also closed just below the 50-day line, up 0.8%.
The Nasdaq composite was up 0.7%. The small-cap Russell 2000 climbed 0.9%. Volume was higher on the Nasdaq and nearly flat on the NYSE compared with the same time Friday. Winners led losers by a 13-to-5 ratio on the NYSE and by about 2-1 on the Nasdaq.
Netflix shares rose about 7% after the close on the company's earnings. Shares are extended after finding support in a pullback to the 50-day moving average. The video streaming company reported quarterly earnings. The company earned 64 cents a share, up 60% and in line with views. U.S. subscriber growth was strong.
Amazon.com (AMZN) is dropping plans to sell drugs to hospitals, CNBC reported. The news caused drug distributor stocks to rally. McKesson (MCK) jumped 3.5% and traded back above the 50-day moving average. Cardinal Health (CAH) rose 3% as it bounces from a four-month low. Drugstore, medical wholesale supply, medical product distributor stocks also were some of Monday's top industry groups in afternoon trading.
Amazon.com shares were up 0.7% but continued to trade below the 50-day moving average.
The transportation sector continued to lead, with logistics, trucking and truck manufacturing among the top 10 industry groups in today's market. J.B. Hunt (JBHT) jumped 6% in heavy trading after the company beat profit expectations earlier today. The stock climbed back above the 50-day moving average and is forming a base with a 126.59 buy point.
Banks continued their earnings announcements, with Bank of America (BAC) beating first-quarter earnings this morning. Earnings rose 51% to 62 cents a share. Adjusted revenue rose nearly 4% to $23.1 billion. Analysts had expected 59 cents on revenue of $22.907 billion. The stock erased losses and was up more than 0.4% at the close.
Among defense contractors, United Technologies (UTX) rose 0.9%, Raytheon (RTN) 1.4% and Northrop Grumman (NOC) 0.3%. Raytheon climbed above the 222.92 buy point of a flat base, but volume was fading. Northrop is forming a base with a 359.53 buy point. Boeing (BA) was up 0.8%.
Defense contractors have been seeing increased interest. Late Friday, the U.S., France and Britain launched a coordinated strike on Syrian chemical weapons facilities after accusing Syria of using such weapons on civilians.
Among breakouts Monday, Proofpoint (PFPT) rose past the 123.97 buy point of a flat base. But volume was weak. Proofpoint was among several cybersecurity stocks rising Monday as an industry conference got underway and analysts speculated on buyouts for the company.
Cal-Maine Foods (CALM) broke out in volume about 30% more than average. Shares of the egg producer topped the 48.50 buy point of a cup-with-handle base but closed a bit below the entry. Cal-Maine has been profitable the past two quarters, after posting losses in five of the past six quarters. Sales have rebounded sharply, up 42% in the February-ended quarter.
Several optical stocks slid after the U.S. Commerce Department barred a Chinese company from importing to the U.S.
Officials said the firm illegally shipped telecommunications equipment to Iran and North Korea.
Lumentum (LITE)tumbled 9%, Oclaro (OCLR) 15%, Acacia Communications (ACIA) 36% and Finisar (FNSR) 4%. Those stocks are in IBD's fiber optics industry group, which had rebounded to No. 26 out of 197 groups. But only Lumentum has an IBD Composite Rating above 90.
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