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Stock Market Today: Indexes Calm, Apple In Buy Range, J&J Breaks Out; 2 Leading New IPOs To Watch | Stock News & Stock Market Analysis

While the major indexes moved little in late-afternoon trading Tuesday, individual stocks still moved with gusto as earnings results continued to roll in at a faster pace.

XAutoplay: On | OffLeading the market were the managed health care and diversified medical industry groups. The main reason: a pair of mega-cap plays, UnitedHealth (UNH) and Johnson & Johnson (JNJ), rallied sharply on positive third-quarter results. J&J gained more than 3% and cleared a 137.18 buy point in an excellent three-month saucer base in heavy trading.

The Dow Jones industrial average edged 0.1% higher, while the Nasdaq composite and S&P 500 gave up less than 0.1%. Volume is running lighter vs. the same time Monday on the NYSE and is a touch higher on the Nasdaq.

The Russell 2000 fell 0.3%. The yield on the benchmark U.S. Treasury 10-year bond inched up to 2.31%. Crude oil bounced off intraday lows and edged higher, with WTI futures rising almost 0.2% to $51.95 a barrel.

Dow Jones industrial average component J&J posted a 13% increase in earnings to $1.90 a share, matching the biggest gain in 12 quarters, as revenue growth accelerated (up 10% to $19.65 billion). The pharmaceutical, medical product and personal care giant had grown sales by 2% to 4% in each of the prior five quarters.

J&J’s saucer base could also be viewed as a long flat base as well. Either way, the buy point is the same, 10 cents above the base’s left-side high.

UnitedHealth notched a fifth quarter in a row of 20%-plus EPS growth as earnings rose 23% to $2.66 a share. Revenue grew 9%, stretching a high single-digit pace for a fourth straight quarter.

Elsewhere in stocks today, Apple (AAPL) gained an additional 0.3% to 160.28 in dull volume. On Monday, shares boosted back above a 156.75 buy point in an 11-week flat base that was cleared Aug. 2. Apple also is now back above the 50-day moving average, a bullish sign for techs and the major indexes.

Since late 2016, investors have been warming up to Apple after the iPhone giant proved it can still grow.

Earnings had fallen 18%, 23% and 15% in the three quarters through fiscal 2016, ended in September that year. But in the three most recent periods, Apple grew its profit 2%, 11% and 18%, and Wall Streets sees Q4 profit rising 12% to $1.87 a share.

Revenue is seen climbing 9% to $50.9 billion, then rising 10% to $85.91 billion in the holiday quarter ending in December.

Apple has gained more than 39% since clearing a first-stage cup with handle, part of a long bottoming base pattern, at 118.12 on Jan. 6-9. As seen in Stock Checkup, Apple’s ratings have improved markedly as a turnaround play since the start of the year.

Meanwhile, among newer issues, Azul (AZUL) (April 11 IPO) and Bright Scholar Education (BEDU) (May 18 IPO) deserve close watch as potential new market leaders.

Azul, the Brazilian airline, dropped for a third straight session and is testing support at the 50-day moving average for the fourth time since Aug. 30.

The Street expects Q3 profit of 26 cents a share, up from a penny in the year-ago quarter. Revenue has climbed 30%, 32%, 20% and 15% in the past four quarters. Q3 revenue is expected to rise 18% to $631 million.

China’s Bright Scholar focuses on K to 12th grade international and bilingual education. The firm grew its revenue 34% to a record $159 million in 2016.

The small cap is up 152% since its debut at 10.50 a share.


IBD’s TAKE: At least three of the current stocks on IBD Leaderboard are also relatively new in the market, having gone public in 2014 or later. New growth companies help drive new bull markets. Leaderboard stocks feature charts that are annotated in real time to help users spot buy points, sell signals, and areas of support and strength. See the entire list here. 


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