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Stocks Rally Again To Close Bad October; Has The Market Bottomed?

The stock market today handed out a Halloween treat as tech stocks boosted the key indexes to solid gains, wrapping up a scary October.

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Though they closed off session highs, the Nasdaq composite surged 2%, the S&P 500 rose 1.1% and the Dow Jones industrial average added 1%. Small caps took part too, though they lagged: the Russell 2000 climbed 0.3%. Despite the last two days' gains, the indexes suffered sizable losses in October: 9.2% for the Nasdaq, 7% for the S&P 500, the Dow 5.1% and the Russell 2000, about 11%.

Volume was mixed Wednesday — slightly lower on the NYSE and higher on the Nasdaq — according to preliminary figures.

Is it possible the market has found a bottom? An earlier Stock Market Today column detailed bullish items that suggest it's possible.

Big-cap techs and financials led the upside on the Dow. Visa (V) and Goldman Sachs (GS) rallied nearly 4% and 3%, respectively. Microsoft (MSFT) and Cisco Systems (CSCO) gained nearly 3% each. Caterpillar (CAT) gapped up for an advance of more than 3%.

Apple (AAPL) gained nearly 3% as it heads back up toward its 50-day moving average. Volume was 10% higher than normal. The IBD 50 stock has held up relatively well during the correction and may be building a new base. Analysts expect the iPhone maker to post a 35% EPS jump on 17% higher sales when it reports fiscal Q4 results after the close Thursday.

Most blue chips scored big gains. But several defensive stocks including Johnson & Johnson (JNJ), Procter & Gamble (PG) and McDonald's (MCD) underperformed.

Stock Market Today: FANG Rally

The FANG stocks rallied. Facebook gapped up and leapt 4%, to extend its gain from Tuesday, when it rose 3%. Shares are 5% below the 50-day line and 30% off a late July peak. After the close Tuesday, the social network reported mixed results — an earnings beat and revenue miss. The sales miss wasn't as bad as analysts feared and Facebook's revenue guidance was better than previous reports, but several analysts cut their price targets.

Amazon.com (AMZN) popped 5%, Netflix (NFLX) vaulted 6% and Alphabet (GOOGL) leapt 4%. All four FANG stocks remain below their 200-day lines. In Facebook's case, the 50-day line fell below the 200-day in mid-September.

Among other tech stocks, security software maker FireEye (FEYE) surged nearly 10% in heavy trade. Late Tuesday, it reported better-than-expected Q3 earnings and revenue. The stock surged past the 18.16 buy point of a cup-with-handle base.

In the IBD 50, ServiceNow (NOW) leapt more than 7%, Trade Desk (TTD) jumped 7% and Canada Goose (GOOS) also leapt 7%. Losers included Integra Lifesciences (IART), down 14% after its earnings report, and Paycom Software (PAYC) and American Eagle Outfitters (AEO), off about 3% each. Paycom announced results late Tuesday.

The Innovator IBD 50 ETF (FFTY) rose 1.1%, extending its 1.3% Tuesday bounce. Like the broader market, it may have found a bottom.

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