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Stocks Continue Winning Streak; Indexes Get Boost From Hot Software Sector

Stocks continued their recent upswing Wednesday, with the major indexes showing gains for a third straight session. Advances among big tech names lifted the indexes, with Microsoft (MSFT), Apple (AAPL) and Salesforce.com (CRM) all posting solid gains.

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Both the Dow Jones industrials and S&P 500 rose 0.8%. The Nasdaq tacked on 0.6%. But the small-cap Russell 2000 Index slipped 0.2%

Preliminary data showed volume easing from Tuesday's levels in the stock market today. NYSE turnover dipped 4.5%, while Nasdaq volume fell 8%.

Early market gains eased somewhat as traders awaited the results of meetings between U.S. and Mexican officials late in the day.

President Donald Trump threatened to impose 5% tariffs on Mexican goods, which would increase over time if Mexico doesn't help stem the tide of illegal immigration into the U.S. Optimism grew after Trump economic advisor Peter Navarro said the tariffs "may not have to go into effect," and influential GOP Sen. Chuck Grassley questioned Trump's authority to impose tariffs in this instance.

The Innovator IBD 50 ETF (FFTY) rose 0.5% after being up more than 1% earlier. That ETF includes the companies on the IBD 50 list, IBD's flagship growth stock screen.

Stock Market Today: Software Stays Hot

Among IBD 50 shares, specialty enterprise software creator Atlassian Corp. (TEAM) rose 3.1%. It's now extended 40% above the 89.92 buy point the stock breached in early January.

Veeva Systems (VEEV), a maker of cloud-based software for the health care and life sciences fields, increased 1.6% to a new high. Since breaking above its 109.15 buy point out of a 16-week consolidation pattern in late January, Veeva has repeatedly tested the 50-day moving average.

Upland Software (UPLD), another IBD 50 name in the enterprise software development business, rose 2.4%. The maker of cloud-based work management software broke out of a 26-week cup base in March, and is now extended 24% and eligible for profit-taking

Yet another software name, Paycom Software (PAYC), rose 3.7%. Paycom is ranked first in its group, and earns a Composite Rating of 99, the highest possible, and a Relative Strength Rating of 98.

All four of the previously mentioned software stocks are also on IBD's Sector Leader List, the most stringent stock screen for both fundamental and technical performance.

Salesforce jumped 5%. The customer-relations software maker is in a six-week flat base with a 167.66 buy point. With its rise on Wednesday the stock regained the 50-day moving average.

Among the best-known tech names, Microsoft rose 2.2% and Apple gained 1.6%. Both had been hit hard during the market's correction amid concerns over antitrust actions against big tech firms.

IPO Leaders Make Big Gains

Names on IBD's IPO Leaders list, likewise, showed strong gains.

Trade Desk (TTD) gapped up 4.2% to a new high after two weeks of trading below the 50-day moving average.

Coupa Software (COUP) also jumped 4.2%, also to a new high. It broke above a 100.10 buy point in late April and is now 16% extended.

Elsewhere, Uber (UBER) continued its rise following its recent IPO, tacking on 5.2%. It's in an IPO base with a 45.10 correct entry point.

Another IPO name, Innovative Industrial Properties (IIPR), surged 8.4%. In the middle of an 11-week consolidation pattern, it's now 2% below its 93.34 buy point.

Churchill Downs (CHDN) — the racetrack, casino and real estate company — jumped 6.1% after Telsey Advisory Group raised its rating on the stock. It's now extended from the 102.68 buy point.

Economy Sends Mixed Signals

Meanwhile, a raft of readings on the spring economy showed mixed results.

ADP's jobs gauge, based on readings from its own automated payroll customers, shows that just 27,000 new private-sector payroll jobs were created in May. That's the lowest in nine years, and way below the estimate of 175,000 jobs. Small businesses slashed 52,000 jobs in May, the report said, an alarming slump.

But not all the data for the late spring economy was bad.

The Fed's Beige Book of economic conditions noted that the U.S. economy grew at a "modest pace overall" during the period from April to mid-May. The central bank report said that growth was held back by some labor shortages and also concerns over growing tariff spats between the U.S. and key trading partners.

In yet another report, this from the Institute for Supply Management, the service sector rose 1.4 points to a reading of 56.9 in May. Anything above 50 indicates expansion. The solid service-sector growth is key, since services now make up more than two-thirds of U.S. output.

Slumping oil prices, a drop in copper prices and lower Treasury yields all seem to indicate that markets expect an economic slowdown is around the corner. As such, the economic data seems to bolster the case that the Fed might soon have to cut interest rates to keep the economy growing at a healthy clip.

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