Wire reports pointing to a willingness by President Donald Trump to prevent a further escalation in the U.S.-China trade war boosted Wall Street on Friday. The Dow Jones industrial average led other market indexes, rising more than 0.5%. Nine of the 30 Dow Jones industrial components gained 1 point or more, including UnitedHealth Group, 3M, Travelers and McDonald's.
XMeanwhile, numerous growth stocks in the IBD 50 continue to rebound.
At around 2:15 p.m. ET, the Nasdaq composite cut losses to less than 0.3%, yet continued to struggle amid weakness in FANG stocks and the semiconductor sector. Nvidia (NVDA) led a severe drop among fabless chip firms, diving as much as 21% to a session low of 161.61 after reporting a sharp deceleration in quarterly growth. But Applied Materials (AMAT) reversed higher, rising 2% following dismal quarterly results (EPS up 4%, sales up 1% in the October-ended fiscal fourth quarter).
Meanwhile, market leadership appears to be emerging from the consumer, financial transactions, restaurant and medical areas of Wall Street. Euronet Worldwide (EEFT), McDonald's (MCD), Chipotle Mexican Grill (CMG), Attunity (ATTU), Repligen (RGEN) and Edwards Lifesciences (EW) have rallied nicely in recent weeks.
While some have already broken out, a few others are sculpting new base patterns, which could lead to promising new breakouts and new highs.
Chipotle Is Forming A Base
Chipotle is making a stronger recovery lately. The burrito and taco chain is down for the week, but the stock continues to work on a large cup with handle.
The Street sees a 2% dip in fourth-quarter earnings to $1.31 a share for Chipotle. But full-year profits are still likely to rise 29% to $8.52 a share. Analysts also forecast accelerating earnings growth next year, up 40% to $11.96 a share.
For now, Chipotle's Earnings Per Share Rating is a middling 60 on a scale of 1 to 99, according to IBD Stock Checkup. The reason: the company's earnings are still on a recovery path after plunging from $15.10 a share in 2015 to $1.28 a share the next year amid a food poisoning crisis.
McDonald's, which joined IBD Leaderboard on Oct. 23 as a half-size position, surged nearly 2% and has now rallied 8% past a 172.10 correct entry point in a long saucer with handle.
This means the global burger and fries chain is now extended past the proper buy zone.
Repligen, also a Leaderboard stock since Nov. 1, jumped more than 2% to 65.55. The biotech materials expert has rallied as much as 19% after it broke out past a 59.09 buy point in a six-week flat base.
S&P 500 Joins Dow Jones In The Black
The Nasdaq 100 slumped more than 0.5%. The S&P 500 edged up nearly 0.2%. Homebuilding, oil and gas royalty trust, gold mining, diversified medical, diversified operations, ethical drug, meat, and electric utility stocks bucked the Nasdaq sell-off. All of these groups gained 1% or more.
The small-cap S&P 600 traded virtually flat, while the Russell 2000 eased less than 0.2%. At 1521, the Russell is still down 1% year to date.
The Dow utility average powered nearly 2% higher as beleaguered California utility PG&E (PCG) rebounded 37% to 24.34. But the stock is still down nearly 39% for the week. At 24.34, shares also trade 66% below a 2017 peak of 71.57 as the company faces potential liabilities linked to deadly wildfires in the northern California town of Paradise.
Please follow David Saito-Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
YOU MIGHT ALSO LIKE:
The Cup With Handle, And Why This Base Makes Money For Stock Investors
Inside IBD 50: This Is The Ideal Market Cap Among Growth Stocks Now
Investor's Corner: What Is A Breakaway Gap, And The Art Of The Breakout
When A Cup Without Handle Forms, Be Wary Of Wild Action: These IBD 50 Stocks Show Why
