Major stock market indexes continued their steady advance in pre-Thanksgiving trading Wednesday, feeding off recent optimism over a U.S.-China trade deal and benign government economic data. Solid gains for McDonald's (MCD), Visa (V) and Apple (AAPL) gave the Dow a boost as the 30-stock index struggled to stay in the green.
XThe Nasdaq and small-cap Russell 2000 Index paced the market gains for the day, rising 0.7% and 0.6%, respectively. The S&P 500 added 0.4%. The Dow Jones Industrial Average struggled early but rose just under 0.2% in late trading.
Volume fell in preholiday trading. NYSE turnover fell 37%, while Nasdaq trades dropped 18% compared with the same time on Tuesday.
On the Dow, McDonald's rose 1.2% after settling for $26 million a lengthy lawsuit with the state of California over alleged underpaying of workers. After hitting a peak of $221.93 a share in early August, McDonald's shares slid all the way down to $187.55 by early November. Since firing controversial CEO Steve Easterbrook in early November, McDonald's stock has firmed.
Credit card giant Visa gained 1% as it moved back into a buy zone following a Nov. 19 breakout from a cup-with-handle base over a 182.50 buy point. Visa has an 89 Composite Rating from IBD, but a strong 95 EPS Rating.
Cellphone behemoth Apple continued its gains, rising 1.3% after breaking out of a flat base with a 221.47 buy point on Sept. 11. It's now 20% extended from its base, making Apple stock eligible under the CAN SLIM investing system for profit-taking.
IBD 50 Makes Gains
The Innovator IBD 50 ETF (FFTY), an exchange traded fund that shadows the IBD 50, rose 0.6%.
Some individual stocks among the IBD 50 continued to outperform. Chinese online leader Alibaba (BABA) gapped up 3.2%, and is now extended from the 188.38 buy point of a cup with handle. The stock is building on growing optimism over a U.S.-China trade deal and Alibaba stock's listing on the Hong Kong exchange this week. Alibaba stock remains just below its all-time high of 211.70 reached in June 2018.
Chinese social media platform Momo (MOMO) added 3.8%. After testing its 50-day and 200-day moving averages in recent weeks, it bounced impressively this week after reporting a stronger-than-expected Q3 EPS gain of 31%. Momo stock has been stuck for 34 weeks in a saucer base, but is now moving within range of a 39.77 buy point.
Stock Market: The Big Winners
There were a number of big winners on IBD's Stocks on the Move list.
Computer-aided design stock Autodesk (ADSK) jumped 5.4% as it released earnings that continued to beat estimates. The stock broke out above a 179.05 buy point from a cup base.
Israeli medical equipment maker InMode (INMD) rose 6.1% as it continues to move out of an IPO base, trading just below its all-time closing high of 55.84 a share. Despite going public just last August, InMode stock has earned a highest-possible 99 for both its Composite Rating and EPS Rating.
Computer database software maker Splunk (SPLK) jumped 2.4%. With a 98 Composite Rating and No. 1 industry group ranking, Splunk broke out of a pattern on Monday. It reported a 53% Q3 EPS gain after the stock market closed last Thursday.
Drugmaker Jazz Pharmaceuticals (JAZZ), with a 98 Composite Rating and also ranked first in its industry group, increased 0.5%. Since hitting a bottom of 116.52 in mid-October, the stock has surged 29%. It was added to the IBD 50 list last week. The company on Nov. 5 reported Q3 EPS growth of 15%, beating estimates, and raised guidance for 2020.
Meanwhile, stock gains also found support from solid economic reports from the federal government.
Durable goods orders rose 0.6%, versus an estimate for a 1% decline. Third quarter GDP growth, meanwhile, came in at 2.1%, faster than the first estimate of 1.9%, and jobless claims unexpectedly fell to near-record lows for the most recent week. In addition, consumer spending rose in October for an eighth straight month, a strong sign that economic growth will likely continue into next year.
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