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Stocks Rebound; Focus Like A Laser On Coherent’s Breakout | Stock News & Stock Market Analysis

Blue-chip stocks led the indexes midday Wednesday, but volume was mixed vs. the same time of day in the previous session. NYSE volume fell, and trade on the Nasdaq was only slightly higher.

X The Dow Jones industrial average strolled ahead 0.6%, while the Nasdaq and the S&P 500 tacked on 0.5% each. The small-cap Russell 2000 popped 0.3%.

In the 30-component Dow, winners led losers by an 8-to-3 ratio. IBM (IBM) was the top gainer, up 4.01 to 167.86. Barclays upgraded IBM shares from underweight to overweight, lifting the price target from 133 to 192. IBM will report results after Thursday’s close.

IBM has seen revenue drop for five years in a row. The Street expects the company to report lower revenue for 2017 but an increase in Q4. That would be IBM’s first quarterly sales gain in at least 18 quarters.

In the IBD 50, a proxy for top-rated stocks, laser technology firm Coherent (COHR) surged almost 6% in torrid volume. The midcap stock broke out of a shallow base-on-base pattern. The buy point is 320.83.

In fiscal 2017 ended in September, Coherent’s earnings zoomed 165%. The Street expects earnings to increase 22% in fiscal 2018.

Other breakouts midday Wednesday included Commercial Vehicle Group (CVGI), Taiwan Semiconductor (TSM) and Analog Devices (ADI). None of the three stocks had a Composite Rating of at least 90, the minimum strength that IBD-style investors look for.

The Composite Rating combines all five IBD ratings into a single number. A rating of 90 puts the stock in the top 10% among all the stocks in IBD’s database.

The S&P 500’s top gainers midday Wednesday included two chip-equipment stocks — Lam Research (LRCX) and Applied Materials (AMAT). Both stocks are working on the right side of late-stage bases. Going into Wednesday’s session, the chip-equipment group was No. 111 among 197 groups. Three weeks ago, the group was higher at No. 46.

Among IBD’s 197 industry groups, the best performers of today’s market included semiconductor-equipment stocks and food and dairy. On the downside, office supplies and money centers fell the most.

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