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Stock Market Rally Continues; Dow Jones Stock Microsoft Is Breaking Out Today

The stock market rally continued early Thursday, in the wake of the Fed interest rate cut on Wednesday. The Dow Jones industrials gained about 60 points in morning trade.

Among the Dow Jones stocks, Cisco Systems (CSCO) and Microsoft (MSFT) were early winners, while Apple (AAPL) was still in buy range. Elsewhere, Target (TGT) announced a new buyback program, while Costco (COST) was downgraded.

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Dow Jones Higher Amid Current Stock Market Rally

Despite a recent pullback, the major stock indexes still hover near record highs. The tech-heavy Nasdaq composite led the day with a 0.6% gain. The S&P 500 rose 0.3%, while the Dow Jones Industrial Average moved up 0.2%. Year to date, the Nasdaq has climbed about 23%. The S&P 500 has gained about 20%, while the Dow Jones has moved up about 16%. (For more market updates today, visit the current stock market.)

On July 16, the Dow Jones Industrial Average reached a record high of 27,398. After a mild correction, the index is once again approaching fresh highs. Elsewhere, the Nasdaq and S&P 500 are also nearing record levels.

Among exchange traded funds, Innovator IBD 50 ETF (FFTY) rose 0.8%, and are trying to extend win streak to four trading sessions. Shares are rebounding their long-term 200-day line.

Dow Jones Stocks: Microsoft Is Breaking Out

Dow Jones stock Microsoft announced it intends to buy back up to $40 billion in stock. The software leader also raised its dividend by 11% to 51 cents per share. The blue chip is breaking out above a 141.78 buy point in a bullish flat base with a 2.7% rise.

Microsoft stock holds a 94 out of a highest-possible 99 IBD Composite Rating. Investors can use the Composite Rating to easily measure a stock's fundamental and technical metrics. Another positive note, the stock's relative strength line is holding near highs, indicating significant stock market outperformance.

Cisco Systems rallied near 1%, but is still about 15% off its 52-week high. Shares are also below their 50- and 200-day lines.

Elsewhere, Apple treaded water above its 221.47 buy point after regaining that level Wednesday. Shares are in the 5% buy range after last week's breakout above the flat-base entry, according to MarketSmith chart analysis.

Stock Market News: Costco 'Too High'

In stock market news, retail chain Target authorized a $5 billion share buyback program, as shares moved up 0.4%. The stock is holding near highs after a bullish breakaway gap on Aug. 21.

Elsewhere, Costco slid over 2% after Bernstein downgraded the retailer from market perform to underperform. The analyst firm called Costco's valuation "too high" and commented investors are overpaying for the quality of Costco's earnings and dividends.

Costco stock is still holding above a recent 284.41 buy point in a flat base after a recent breakout. Shares are still holding above their 50-day line amid the current pullback. The top retailer is a Leaderboard stock idea.

Top Growth Stocks To Watch: Essent Nears Entry

Among the IBD 50 top growth stocks, Essent is once again approaching a 50 buy point in a double bottom. Shares gained 1.6% in morning trade.

According to IBD Stock Checkup, Essent stock has a 95 out of a highest-possible 99 IBD Composite Rating.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.

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