Wall Street did not fret too much about a drone strike that has paralyzed Saudi Arabia's flagship oil production infrastructure, sending crude oil futures up more than 12%. In the current stock market, the Dow Jones Industrial Average fell 0.5% as solid gains by its two oil and gas components helped offset losses of 2 points or more each in six other members of the blue chip index.
XThe Nasdaq composite, at one point down nearly 0.7%, shaved its loss to just under 0.3%. The S&P 500 fell 0.3%. Oil and gas, consumer electronics, coal, transportation equipment, solar and meat stocks also defied the general decline with gains of 1.6% or more. Plus, at 8153, the tech-rich Nasdaq continues to keep a decent cushion above its critical 50-day moving average.
See the entire daily performance of the 197 IBD industry groups at IBD Data Tables. The rankings are based on six-month price-weighted performance. Historically, the best growth stocks hail from the top 40 industries. But sector rotation can also occur.
Volume fell vs. Friday's session on the Nasdaq. The shrinkage in turnover indicates that Monday's decline was not bearish. But NYSE turnover rose; that includes heavy-volume gains among numerous oil and gas exploration firms.
For instance, ConocoPhillips blasted nearly 10% higher and battled upside resistance at the long-term 200-day moving average. Volume surged 161% above its 50-day average to 15.9 million shares.
The S&P SmallCap 600 continued to show recent mettle. It closed the day with a gain of 0.4%, on top of weekly rallies of 2.5%, 1.2% and 4.9% in the prior three weeks.
Beyond Dow Jones: More Small Cap Leaders Emerge
In the small cap space, NuStar Energy (NS), a NYSE-listed MLP (master limited partnership) involved in storing and transporting petroleum products, burst past a 29.63 buy point in a six-week flat base. But it eased slightly to close at 29.24.
NuStar made the IBD Stocks On The Move screen.
At Monday's session high of 982, the 600 now stands merely a 1.2% advance away from taking out its year-to-date peak of 994.
Meanwhile, one good litmus test for growth stock investors to watch? How far a true market leader falls below a recent proper buy point. Mastercard (MA), aerospace components play Hexcel (HXL) and Coupa Software (COUP) recently tripped below the proper buy point following a recent breakout.
Hexcel ranked No. 20 in the IBD 50 heading into Monday's market action. Last week, the stock nipped past an 85.73 buy point in a mild flat base, but turned tail quickly.
A 7%-8% loss-cutting sell rule has not been triggered yet for any of the three high-growth companies. But if these stocks go sideways for a week, a new base may form and set up a brand new proper entry.
A proper base can establish an excellent new buy point. It provides the highest likelihood that a true leader is ready to make a significant gain and make new highs in a limited period of time.
Mastercard, which entered IBD Leaderboard on Jan. 31 this year when it traded near 211, recently shuffled past a 283.43 entry in a narrow flat base. But gains were very limited. On Sept. 9, the credit and debit card processing giant reversed lower, falling nearly 2.8% in heavy turnover. Shares also closed below the rising 50-day moving average for the first time in three weeks.
But at last week's low of 269.20, Mastercard has so far limited its loss from the 283.43 proper buy point to 5.1% — not a big enough loss to justify a defensive sell.
The megacap consumer spending play has notched earnings increases of 49%, 51%, 33%, 36%, 18% and 14% vs. year-ago levels in the past six quarters. The Refinitiv consensus forecast calls for a 13% jump in Q3 profit to $2.02 a share.
According to IBD Stock Checkup, Mastercard garners a 96 Composite Rating on a scale of 1 (regrettable) to 99 (very remarkable). The Composite Rating combines key fundamental, stock price and fund ownership quality factors key to determining the best growth stocks on Wall Street.
Innovator IBD 50 ETF (FFTY) rose 0.7%. Trading near 32.78, FFTY is holding a gain of more than 18.6% year to date.
In Other Financial Markets
West Texas Intermediate oil futures reached as high as $63.38, the highest level since May.
In economic news, the September reading for the Empire State manufacturing survey sharply fell vs. a month ago to 2.0 and missed the Econoday consensus forecast of 4.9.
Keep in mind that the range of estimates was fairly wide on a percentage basis (-1.0 to 5.4).
Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, stock market insight and chart analysis.
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