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Stock Market Rallies As Earnings Boost Dow; IBD 50 Lags Badly

Key indexes rallied in the stock market today as earnings fueled big gains in the Dow Jones Industrial Average, and chips boosted the Nasdaq.

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The Nasdaq surged 1.3%, the S&P 500 rose 1.1% and the Dow Jones industrials advanced 1% around 1:35 p.m. ET. Small caps tracked by the Russell 2000 led with a 1.5% gain. Volume swelled on the NYSE and Nasdaq vs. the same time Monday.

UnitedHealth Group (UNH) surged more than 7% in robust trade to lead the Dow Jones index. The stock popped back above its 50-day line for the first time since early August. The biggest U.S. health insurer reported Q3 earnings and revenue that topped views, and raised its 2019 profit guidance.

JPMorgan (JPM) rallied 4% to a new high in more than twice normal volume, after delivering better-than-expected Q3 results. Shares retook a 117.34 buy point of a cup base first cleared last month. They are still in potential buy range, which tops out at 123.21.

Intel (INTC), Dow Inc. (DOW), Johnson & Johnson (JNJ) and Caterpillar (CAT) were among blue chips up more than 2% apiece.

Microsoft (MSFT) added 1.5% as it nears a 141.78 buy point of a flat base it briefly cleared Sept. 19. The operating system, software and cloud services giant leads IBD's desktop software industry group with a best-possible 99 Composite Rating.

Few Dow Jones Losers

Aside from Procter & Gamble (PG), down 2.5%, five other Dow Jones stocks gave up less than 0.5% each.

Managed care, biotech and chip stocks led the upside among IBD's 197 industry groups. Gold miners, food and utilities underperformed.

The Innovator IBD 50 ETF (FFTY) edged 0.1% higher, well underperforming today's stock market.

Nvidia (NVDA), up 6% in brisk trade, snared the biggest gain in the fabless chip group. The stock broke out past a 188.50 aggressive entry. Bank of America boosted its price target on the graphics chip designer to 250 from 225.

Among ETFs, VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) rose more than 2% each. SMH cleared a 123.23 buy point of a cup with handle, while SOXX is just shy of a 221.41 entry of a cup with handle.

Over in the IBD 50, Boot Barn (BOOT) rallied nearly 4% in a third straight advance and is now about 1% below a 37.72 buy point of a cup with handle. An Aug. 1 spike mars the base. But a 98 Composite Rating, which combines key fundamental and technical metrics into a single score, means Boot Barn outperforms 98% of all other stocks based on the composite score.

Among other IBD 50 winners, Universal Display (OLED) rose 3%. Financial stocks showed strength: Western Alliance Bancorp (WAL), Discover Financial Services (DFS) and Essent Group (ESNT) gained more than 2% apiece.

But PagSeguro Digital (PAGS) plunged 13% in heavy trade to a three-month low after the Brazilian payments company announced a secondary stock offering. It certainly hurt the IBD 50's performance. SolarEdge Technologies (SEDG) and Cyprus-based payments firm Qiwi (QIWI) lost about 5% each.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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