The stock market rallied higher on Monday, as the S&P 500 hit a new record high. The Dow Jones moved up about 170 points in the morning and held gains of roughly 140 points, or 0.5%, into the close. The rally got a boost from FAANG gang members Apple (AAPL) and Alphabet (GOOGL), as Apple hit fresh all-time highs and Alphabet stock traded near a key buy point ahead of its earnings Monday.
XAmong the major Dow Jones stocks, Microsoft (MSFT) rallied nearly 2.5% after the company announced a $10 billion contract with the Pentagon, beating Amazon (AMZN) for the deal. Telecom leader AT&T (T) powered 4% higher nearing its 38.85 entry point on better than expected growth in new wireless customers.
And utilities stock PG&E (PCG) plunged more than 24% as the company expanded its power shutdown to 940,000 homes in Northern and Central California, to avoid wildfire hazards in those areas.
Dow Jones: Big Earnings Week Ahead
The Dow Jones has another big earnings week ahead of it. Earnings results from Dow leader Apple and tech giant Facebook (FB) report late Wednesday. Dow Jones pharma companies Pfizer (PFE) and Merck (MRK) report on Tuesday. Additionally, results from Dow Jones oil giants Exxon Mobil (XOM) and Chevron (CVX) are due later this week on Friday.
The market closed Monday with the Dow Jones up 0.5%, the S&P 500 up 0.6%, and the Nasdaq up 1%.
All three major stock indexes found support near their 200-day moving averages on Oct. 3 and have been acting bullish ever since. Stocks moved higher last week after CNBC reported the U.S. and China are close to finalizing a phase-one trade deal. In other economic news, the Dow Jones transports edged up Monday, following three consecutive weeks of 2% to 3% gains. A strong rally in transports signals institutional investors feel an economic recession is unlikely in the near term.
With the market's recent direction and change in trading volume, be on the lookout for new buyers entering the market. This is a pivotal time and stocks could be headed for a break out higher.
Year to date, the Nasdaq composite is up about 25%. The S&P 500 gained about 20%, while the Dow Jones Industrial Average rose about 15%.
Stocks To Watch
The IBD 50 (FFTY) climbed back above the key 50-day line, a bullish sign, and closed at 33.14 on Monday, up 0.1%. It rallied 1.9% last week.
Last week, IBD 50 stock Microsoft reported better-than-expected third-quarter results due to strong commercial cloud sales, sparking a rally back above the 50-day line. The stock broke out above its 142.47 buy point from a flat base reaching a record high of 146.44 on Monday. Shares closed off session highs at 144.19, up 2.4%.
IBD Leaderboard stock Apple hit a record high with shares extended past the recent flat base with a buy point at 221.47. The stocks relative strength line continues to make new highs as AAPL holds a Relative Strength Rating of 93.
Alphabet stock is breaking out above a 1,268.49 buy point from a cup with handle base ahead of its quarterly earnings results after the close Monday. Shares gained 2.6% on Monday, but then fell around 1.5% after hours after it missed Wall Street's Q3 EPS estimate.
The company reported EPS of $10.12 a share on revenue of $40.5 billion. Analysts expected EPS to report $12.38 a share on revenue of $40.32 billion.
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