Stocks Enjoy Some Quiet Time; Smith & Wesson Breaks Out

Stock indexes wandered quietly to little effect Friday, apparently content to avoid more trouble. The Nasdaq added 0.3%, while the S&P 500 inched up 0.1%. Small caps outperformed as the S&P 600 popped 0.6%. The IBD 50, though, dropped 0.3%. Volume fell on both major exchanges. After Monday’s wild intraday plunge, which took the Nasdaq 18% off its high, bulls might be happy with any kind …

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A Warning Sign For S&P 500 ETF As Energy Stocks Lead

The major index-tracking ETFs hiccupped Friday after two stellar trading sessions as consumer confidence eased to a three-month low in August. Exchange traded funds holding energy stocks had led the broad market higher around midday on the back of rising oil prices. By early afternoon, the market was losing ground again.

SPDR S&P 500 (ARCA:SPY) edged 0.2% higher intraday, but a bearish sign appeared on its chart. It entered the “Death Cross” as the 50-day moving average crossed below the 200-day line.

Top 25 holdings Exxon Mobil (NYSE:XOM) andChevron (NYSE:CVX) gained 0.9% and 3.4% respectively by midday. U.S. crude oil briefly crept above $45 a barrel.

SPDR S&P Oil & Gas Exploration & Production (ARCA:XOP) popped 1.3% on the stock market today.

Market Vectors Oil Services (ARCA:OIH) advanced 3.7%.

Both ETFs have been gutted in the past year as commodity prices plunged.

XOP is 52% off its 52-week high.

While ETFs tracking the tech-heavy Nasdaq and blue-chip Dow Jones Industrial Average benchmarks also wavered between wafer-thin gains and losses shortly after noon, small caps held steadily higher.

IShares Russell 2000 (ARCA:IWM), following a basket of U.S. small-cap stocks, rose 1%.

Top 10 holdings Tyler Technologies (NYSE:TYL) rose 1% and Ultragenyx Pharmaceutical (NASDAQ:RARE) 3% in mid-day trade.

International ETFs holding China equities were both among the biggest winners and losers Friday.

A-share ETF portfolios, holding stocks traded in Shanghai and Shenzhen, gained as much as 4%. Peers holding H-shares, listed in Hong Kong, fell around 2%.

IShares China Large Cap (ARCA:FXI) was down 2% on the day and poised to end the week essentially flat.

ETFs holding physical gold ticked up but were headed toward their largest weekly drop in five weeks. Those losses come amid higher expectations of a rate increase by year-end.

Gold struggles to compete with yield-bearing assets when rates are rising.

Here’s a look at how benchmark exchange traded funds tracking various asset classes are performing today.

Following daily ETF market action can be key to successful investing:

10 Bellwether ETFs:

SPDR Gold Shares (ARCA:GLD), +0.8%, RS 49

IShares Russell 2000 (ARCA:IWM), +0.7%, RS 56

IShares Core S&P Mid-Cap (ARCA:IJH), +0.4%, RS 59

PowerShares DB U.S.$ Bullish (ARCA:UUP), +0.3%, RS 80

SPDR S&P 500 (ARCA:SPY), 0%, RS 59

PowerShares QQQ (NASDAQ:QQQ), 0%, RS 71

IShares Core U.S. Agg Bond (ARCA:AGG), -0.1%, RS 71

SPDR Dow Jones Industrial Average (ARCA:DIA), -0.2%, RS 52

IShares MSCI EAFE (ARCA:EFA), -0.2%, RS 47

Vanguard FTSE Emerging Markets (ARCA:VWO), -1%, RS 27

Follow Aparna Narayanan on Twitter: @IBD_ANarayanan.

Will Clinical Trial Firm Icon Pass This Market Test?

Will Clinical Trial Firm Icon Pass This Market Test?

Will Clinical Trial Firm Icon Pass This Market Test?

Despite last week’s sell-off on the Nasdaq and S&P 500, Ireland-based contract research organization (CRO) Icon has found support and shown resilience. Icon provides phase I – phase IV clinical trial services to pharmaceutical, biotech and medical device companies.


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When the market goes through a rocky phase, pay close attention to stocks like Icon (NASDAQ:ICLR) that weather the storm better than most. Like drugmakers Allergan (NYSE:AGN) and Perrigo (NYSE:PRGO), contract research organization (CRO) Icon is based in Ireland.

It provides phase one to phase four clinical trial services to help pharmaceutical, biotech and medical device companies bring their products to market more quickly and at lower cost.

Key Fundamentals

On July 28, Icon posted mixed results for Q2, beating on earnings but missing on revenue.

For the full year, analysts expect EPS to rise 37%, followed by a 19% gain in 2016. Estimates for both years were recently revised higher.

In addition to a 19% return on equity, Icon sports a five-year annual EPS growth rate of 27%. Its three-year growth rate is even more impressive, at 82%.

Chart Analysis

The stock has already made a big run, rising more than 200% from a breakout in July 2012 until it pulled back to form a later-stage base in March of this year.

It shot past a 72.50 buy point in huge volume on July 28 after beating earnings views, raising full-year guidance and increasing its stock buyback program by $400 million.

It was adding to those gains in tight trading until it got dragged down by the recent sell-off in the S&P 500 and Nasdaq.

But Icon found support at the 10-week moving average and bounced back above it.

While the stock is in a proper buying zone, see if Icon offers a new entry once a new market uptrend begins.

But keep in mind that the recent base was later-stage, and that entails more risk.

See related video at

Connect with Matthew Galgani: @IBD_MGalgani | Facebook

Brazil Tops World Markets, Even As Q2 GDP Tumbles

Brazil’s stock market edged lower Friday after official data showed the country’s GDP declined for a second straight quarter in Q2, putting South America’s largest economy officially in a recession.

For the week, Sao Paulo’s benchmark Ibovespa index rebounded from the lowest level in more than six years . That and a rally in Buenos Aires’ Merval index in Argentina were two of the top performances among global benchmark indexes in a wildly unpredictable week of trade.

Brazil’s real swooned to a 12-year low and posted its worst month in a year that has seen its value drop 25%. Official data from the Brazilian Institute of Geography and Statistics estimated GDP growth declined 1.9% in Q2, much worse than expected. In Q1, GDP fell 0.7%. Private consumption saw its worst drop in 14 years.

Despite the week’s gain by Brazil’s stock market, the Ibovespa fell more than 6% in August, and is nearly 18% off its May peak.

Also unclear in Brazil and Argentina was how stocks powered up while commodities prices — a vital element in both economies — posted a mixed week.

Brent crude oil rose 10% for the week, and West Texas intermediate gained 11.7% — easily the best week for both since the oil price rout began in June 2014.

But copper was flat and silver fell 6%. Spot iron ore prices were down 4% for the week, although futures rebounded from an early dive to post a 4% gain.

Among Brazilian companies trading on U.S. markets, steel producer Companhia Siderurgica (NYSE:SID) bounced 9% for the week, but remains deep in a multiyear correction. Water utility Comp De Saneamento (NYSE:SBS) surged 5%. Beer and soft-drink heavyweight AmBev (NYSE:ABEV) climbed 4%.

Beyond South America, China’s leading indexes continued to take a beating. The Shanghai Composite dived 19% through Wednesday, then trimmed its loss to 7.8%. The Shenzhen Composite narrowed a 19% dive to a 9.4% loss. In Hong Kong, the Hang Seng index fell 3.6% — its 12th slip in 14 weeks.

But Asian markets outside China and Japan were generally strong for the week.

South Korea’s KOSPI benchmark gained 3.3%. In Taiwan, the TAIEX climbed 2.9%, while Jakarta’s composite JCI in Indonesia rose 2.5%. The Bursa Malaysia KLSE in Kuala Lumpur notched a 2.4% gain.

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Earnings Send These Leaders Back To New High Ground

The new highs list was savaged last week as the Nasdaq fell as much as 18% off its July high. But a pair of Spotlight stocks bucked the trend and hit new highs on bullish quarterly reports.
Specialty clothing retailer Express (NYSE:EXPR) blew away e…

Stocks Take A Quiet Step Back; Micron, Veeva, Ulta Beauty Jump

Stocks scratched out narrow losses in weak trade Friday, as global market action and a slip in August consumer confidence dragged on morning trade.

The Dow Jones industrial average and the Nasdaq shed 0.5% each and the S&P 500 dipped 0.2%. All remained in positive territory for the week.

Volume dipped 21% below Thursday’s morning levels on the Nasdaq and fell 17% lower on the NYSE.

The stock market today took an early breather after three days of rallying out of the starting gate. Tuesday’s early rally reversed to a loss. Thursday’s rally lost volume support in late afternoon trade. But in combination, the moves have the market looking a lot better at the end of this week than it did last week — despite a weighty plunge on Monday.

July personal spending and income numbers were largely in line with forecasts, and holding steady to their June increases, the Commerce Department reported. One surprise gain came from the wage and salary column within the personal income category, which showed its largest increase since November.

Consumer sentiment eased to a three-month low in August, the University of Michigan reported, lowering its Consumer Sentiment Index to 91.9 for the month. That was below its initial August estimate of 92.9 as well as July’s reading of 93.1. Economists had forecast an increase to 93.3. Turbulent action in global stock markets weighed on consumers’ views in the second half of the month, the group said.

Oil-related industry groups posted seven of the 15 strongest early moves among 197 industries tracked by IBD, although oil prices were under moderate early pressure, ahead of Baker-Hughes’ release of its weekly land rig count scheduled for 1 p.m. ET.

Dow stocks were nearly all lower, but none showing so much as a 1% decline. Activision-Blizzard (NASDAQ:ATVI) jumped 5%, the best gain on the Nasdaq 100. Autodesk (NASDAQ:ADSK) sat at the bottom of the list, down 5% after reporting late Thursday its Q2 earnings beat, revenue met consensus views and Q3 earnings guidance was less than half the consensus estimate.

Micron Technology (NASDAQ:MU) jumped 5% after Reuters reported that the chairman of China-based Tsinghua Unigroup was in the U.S. this week to revive an earlier, $23 billion takeover bid of the Boise, Idaho-based chipmaker.

Medical software developer Veeva Systems (NYSE:VEEV) popped 5%. It reported after Thursday’s close its Q2 earnings jumped 44% and revenue swelled 30%, both better than forecast by analysts. The stock tumbled out of a basing effort in mid-July.

At the top of the IBD 50 list, Ulta Beauty (NASDAQ:ULTA) wobbled between a 1% and 3% gain as investors combed through the retailer’s Q2 report delivered after Thursday’s close. The stock recovered from a 26% dip on Monday, but is struggling to gain ground after retaking an earlier, 159.95 buy point.

WisdomTree (NASDAQ:WETF) slipped 2%, the worst loss in the group. The investment advisor fell 36% from an Aug. 5 high and is meeting resistance as it tries to retake its 50-day moving average.

Trouble In China? No Problem For Top Tech Stock CDW

China’s woes have pummeled global markets in recent days, but that’s not a problem for top tech stock CDW (CDW). The provider of information technology hardware and software hit a new high Thursday, climbing 56 cents to 40.04 as the market rebounded for a second day. It’s in buying range, 2% past a 39.42 entry of a 14-week consolidation. All of CDW’s customers are in North America, mostly in the …

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