2008 record      

 

The stock market moved up sharply, shrugging off the impeachment drama and instead focusing on two new trade deals and a raft of bullish economic data. Leaderboard stock Advanced Micro Devices (AMD) and other chipmakers rose, along with cellphone and streaming entertainment heavyweight Apple (AAPL).

The stock market got out of the gate fast, after the Senate approved the U.S.-Mexico-Canada Agreement (or the USMCA) just one day after President Trump signed the U.S.-China Trade Deal. Trade issues dominated trading, even as the House sent articles of impeachment to the Senate and prepared for an impeachment trial.

Nasdaq led the big indexes higher, gaining 0.8%, with the Dow Jones Industrial Average not far behind, up 0.7% and working on its fourth straight rise. The S&P 500 gained 0.6%. The big winner in early trading was the small-cap Russell 2000 Index. It rose 1.2%.

Volume was off from the same time a day before on both major exchanges. NYSE trade dipped 5%, while Nasdaq action declined 6%.

On the Dow, tech names helped the index higher with Apple rising 0.9%, Microsoft (MSFT) up 1.4%, and Cisco Systems (CSCO) adding 1.7%.

Microsoft remains in a buy zone above a 131.47 buy point over a flat base. Apple remains 42% extended above a Sept. 11 breakout from a lengthy flat base with a 221.47 buy point. Cisco, meanwhile, is in the bottom half of a consolidation pattern, still working to regain its 200-day moving average.

With the semiconductor industry in the middle of a turnaround, chip stocks popped after Taiwan Semiconductor (TSM) reported better-than-expected EPS in Q4. Early gains of more than 2% fell back to just 0.3% late in the session.

IBD Leaderboard chipmakers Nvidia (NVDA) and Advanced Micro Devices both showed solid gains. Nvidia, up 0.9%, remains in a buy zone above a 241.91 follow-on entry from a three-weeks tight formation.

AMD, meanwhile, jumped 2.4%, further extending above a 41.89 alternative entry, also out of a three-weeks-tight formation. AMD broke out of a cup base on Nov. 4, and has continued to find support at its 10-day moving average line, a strong sign.

On the Dow, pioneer chipmaking stock Intel (INTC) spurted 0.8%, but remains well off its 59.59 high of last April and has struggled to regain its 50-day and 200-day moving average lines. Its relative strength line has lagged.

Chips also figured prominently in gains on the Nasdaq 100. Western Digital (WDC), Micron Technology (MU) and Qualcomm (QCOM) all racked up gains of 2% or more, while Lam Research (LRCX) jumped 1.9%.

Among the IBD 50 stocks, volatile medical aesthetics IPO InMode (INMD) jumped 4.6%, pushing back above its 50-day moving average as it forms the right side of a possible first-stage base.

Enterprise Software Leaders

Cloud-based human capital management stocks Paylocity (PCTY), up 1.3%, and Paycom (PAYC), with a 1.2% gain, continued their recent rise.

Paylocity is in the profit-taking zone extended 23% above a cup base with a 112.56 buy point. Paycom remains in a buy zone above a 280.05 buy point from a flat base.

IBD Live discussed Paylocity on Thursday.

Other notable gains on the IBD 50 list included Chegg (CHGG), up 2.8%. The cloud-based online learning site carries a 98 Composite Rating and a No. 1 ranking in its industry group. It's aiming to complete the right side of a long and deep cup base with a 48.32 buy point.

Align Technology (ALGN), maker of Invisalign orthodontics, jumped 3.5%, regaining a 281.67 buy point in a cup-with-handle base. The 5% buy zone goes up to 295.75.

Among exchange traded funds, the Innovator IBD 50 ETF (FFTY) rose 0.4%.

Beyond The Stock Market: Strong Economy Continues

A spate of economic reports showed the U.S. economy remains surprisingly strong in the New Year. Weekly jobless claims fell for a fifth-straight week, while retail sales rose a stronger-than-expected 5.8% in December from a year earlier.

Meanwhile the National Association of Home Builders survey of industry sentiment said December and January were the best months since 1999. Also, the Philadelphia Fed's index of manufacturing hit its highest level since last May.

And IBD's own IBD/TIPP Poll showed economic optimism rose 0.7% in early January to a reading of 57.4, its highest since May. A reading over 50 indicates growing optimism.

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