Major stock indexes rallied as earnings season kicked off with better-than-expected quarterly results for a number of bellwether companies. But the early solid gains for the major indexes shrank late in the day as some traders questioned the underlying strength of earnings.
XAmong those reporting better-than-expected results included Johnson & Johnson (JNJ), which jumped 1% after being up as much as 3% early on, Bank of America (BAC), which fell 0.2%, and investment fund giant BlackRock (BLK), which soared 3%.
The Dow Jones Industrial Average added 0.3% and the S&P 500 eked out a 0.1% rise. Meanwhile, both Nasdaq and the tech- and growth-oriented Russell 2000 tacked on 0.3%.
Trading volume rose on both the NYSE and Nasdaq, according to preliminary figures.
Among IBD's Sector Leaders, Amazon (AMZN) rose 1% as it continues to build a cup. Amazon this week announced it is considering launching a free music-streaming business. Also on the Sector Leader list, Veeva Systems (VEEV) increased 0.5%.
Chipmakers Make Gains
On IBD's Stocks on the Move list, cloud-based management and payroll software provider Paylocity Holding (PCTY) added 1% and now sits less than 2% from its 91.71 buy point. Paylocity has 99 Composite Rating, meaning it ranks ahead of 99% of all stocks on a variety of technical and fundamental factors. With an EPS Rating of 96, Paylocity has three quarters of earnings acceleration, a bullish sign.
Epam Systems (EPAM), up 1%, continued its rise out of a 21-week consolidation and is now 21% extended beyond its buy point. With a 97 Composite Rating and 93 EPS Rating, it is the No. 2 company in the tech services group.
Network equipment maker Ubiquiti Networks (UBNT) gained 1.9% and extended its recent run to 48% above its 115.54 buy point in just 11 weeks. Ubiquiti has a 99 Composite Rating.
Chipmakers also rallied. SPDR S&P Semiconductor ETF (XSD) leaped 2.5% to a record high.
Chip and controller designer Microchip Tech (MCHP) rose 2.3%, while Taiwan Semiconductor ADRs were up 0.9%. Up as much as 1.8% during the day, Intel (INTC) finished up just 0.8%.
China Bounces Back
U.S. trading also got a boost after China's bellwether Shanghai composite surged 2.4% in trading, as optimism over a U.S.-China trade deal continued to grow and as fears over an economic hard-landing for China waned.
Internet search giant Baidu (BIDU) rose 1%, climbing just above its 50-day average, while online marketing giant Alibaba (BABA) added 1.5%. Alibaba has been emerging from a cup with handle base and now sits 2% below its buy point of 188.18. Mobile communications powerhouse Tencent (TCEHY) jumped 2% as it struggles to complete an epic 64-week cup formation. It's currently about 18% below its 60.10 buy point.
Also rising strongly, online seller 58.com (WUBA) jumped 4% while Weibo (WB) popped 2.6%. After building a short cup with handle, Weibo now sits just 2% below its 72.10 buy point. Car buying and marketing web company Autohome (ATHM) rose 1.5% for the day.
News provided a backdrop for the markets' early gains.
Two influential Federal Reserve officials fed the market bullishness by offering an optimistic assessment of the economy and by proposing that the Fed might not automatically raise rates if inflation rose above 2%.
Meanwhile, the Fed reported that manufacturing was flat in March, after falling in both January and February. For the entire quarter, manufacturing slumped at a 1.1% yearly rate, the first quarterly drop since 2017. Industrial output dipped 0.1% for March, further confirmation of forecasts showing weak GDP growth in the first quarter.
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