Corporate earnings results grabbed front and center stage and are helping to propel U.S. equities higher in late-afternoon trading Tuesday, as the major indexes are padding last week's nice gains.
The Dow Jones industrial average, boosted by better than expected results in several of its 30 components including Caterpillar (CAT) (Q1 EPS up 100%) and DuPont (DD) (EPS up 30%), rose more than 1.2%. That's better than gains of 0.7% to 0.8% for the Nasdaq composite and the S&P 500.
The Dow Jones industrials, at 21,002, are now up nearly 6.3% since Jan. 1, but the Nasdaq composite, breaking 6000 for the first time, is ahead with a nearly 12% gain. Big-cap techs and select consumer-oriented stocks have helped the Nasdaq's cause. But keep monitoring earnings results and see if more money flows into blue-chip-type large caps outside the tech realm.
Caterpillar also notched a surprise 4% gain in revenue, its first year-over-year increase in 10 quarters. The last time the construction and mining gear titan saw a top-line lift came in the third quarter of 2014 (up 1%).
Cat shares vaulted past a 99.56 flat-base buy point with a gap up at the open, and it's enjoying heavy institutional buying with shares seeing triple normal turnover. The stock opened the day at 102.80, within the 5% proper buy zone following Tuesday's breakout.
The Russell 2000 rallied more than 1.2%. Volume is running firmly higher vs. the same time Monday on both main exchanges, a sign of heavy institutional demand for equities.
Crude oil futures, meanwhile, rebounded after getting hammered Monday. WTI futures rose 0.9% to $49.67 a barrel but are still down more than 7% year to date.
Gold mining stocks and other defensive plays led the market's downside. Newmont Mining (NEM) sank nearly 3% to 32.91 in heavy volume. The mining giant grew first-quarter profit 4% to 25 cents a share on a 13% pickup in revenue.
Four months into 2017, it's clear that institutional investors are favoring certain industrial sectors over others. That's good news for stock pickers. Here are five stocks that, in addition to high-growth names in the IBD 50 and Sector Leaders, show more mature fundamentals or are turnaround situations but have the potential to beat the S&P 500.
The stock was a huge leader in 2016, rising 261% from a cup-with-handle breakout at 33.16 back in March that year.
Nvidia sports a solid 98 Earnings Per Share Rating on a scale of 1 to 99 and earnings in the April-ending fiscal first quarter are seen rising an impressive 46% to 67 cents a share, on top of the 39% gain in the year-ago quarter. But keep in mind that in the next three quarters, Nvidia faces absolutely steep year-over-year comps, as Q2, Q3, and Q4 profit rose 56%, 104% and 117%, respectively.
Given the giant gains in 2016, Nvidia's current correction is very respectable, falling no more than 21% from its all-time high of 120.92.
Celgene (CELG), $98 billion market value: The highly respected biotech pioneers treatments for chronic and difficult diseases including multiple myeloma. The stock jumped 2% to 125.87 after finding vital support at the 50-day line. It's up slightly from an earlier 122.49 cup-with-handle entry.
The Street sees full-year earnings rising 22% to $7.22 a share in 2017 and up 21% in 2018.
Intuitive Surgical (ISRG), $31 billion: The robotic surgery firm, which recently posted double-digit top and bottom-line growth in Q1, is up more than 31% since Jan. 1. It bolted out of a saucerlike base at 727.23 in late February.
Intuitive gets a rock-solid 96 Composite Rating in IBD Stock Checkup, among the top 5 in IBD's Medical-Systems/Equipment industry group. That group is ranked No. 1 among 197 industry groups and subgroups for six-month relative price performance.
Watch for potential new buy points to emerge, in the form of a new base or a gentle pullback to the 10-week moving average, as seen on a weekly chart.
In some cases, a stock may not fall back to the 50-day line but find support at the 10-week line. So it's crucial to study a stock's price action on both the daily and weekly charts.
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