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Stocks Handle Ukraine News Well, Keeping Losses Small

Stocks spent the entire day in the red Thursday, but low volume communicated indifference. The Nasdaq lost 0.3%, while the S&P 500 shaved 0.2%. Volume fell across the board. Although the second read on Q2 GDP was stronger than expected and jobless claims lower than estimates, the market ignored the good news. The focus shifted to the international situation after reports that Russian troops …

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IBD’s Market Index Charts Page Gets Makeover

A longtime IBD staple has just undergone a face-lift.

The stock index charts page (see B2 in today’s IBD), called “What’s The Market Trend?,” was reshaped this month with a fresh way to study the market.

The basic frame hasn’t changed. Large price-and-volume charts of the major indexes, the IBD Mutual Fund Index and other market data are still there.

But the Nasdaq and S&P 500 daily charts are now even bigger. They illustrate nearly a full year of daily price and volume activity, giving investors a wider lens on the market.

The line graph plotting the put-to-call volume ratio also was lengthened to match the index charts. It now sits directly below the Nasdaq and S&P 500 charts, which makes it easier to compare this contrarian indicator to the market’s behavior.

The ratio compares to the number of generally bearish put options traded vs. bullish call options. When the ratio hits 1.10 or higher, it’s usually a sign of strong bearishness among options and equity traders.

Peaks in the put-call ratio are now highlighted with blue arrows (highs) and red arrows (lows). Those are significant, because they often coincide with changes in market direction. In particular, the highs in the ratio have been near market lows this year.

The lists of the 40 best and 40 worst industry groups are staying, although they now display some color highlights. If a group was among the day’s 10 best of IBD’s 197 industry rankings, it is printed in blue; if it was in the bottom 10, it is in red.

The full list of 197 groups runs in the Monday edition. It’s available every day at investors.com. Using the mouse, hover over the “Research” tab in the main navigation bar, then click on “IBD’s 197 Industry Groups.”

The chart of the Dow Jones industrial average maintains its old size, covering six months. This de-emphasizes the venerable average, which represents just 30 major companies and is not a good gauge of growth stocks. But the Dow remains an important barometer of U.S. companies, and its chart deserves to be on the page.

The IBD Mutual Fund Index also is staying on the page. It combines 20 of the most respected mutual funds in the U.S. The index provides a look at how some of the best stock pickers are doing. As such, it can be viewed as a sophisticated advance-decline line.

So, what about The Big Picture? The column, today on B3, that analyzes the market each day now appears on the page adjacent to the charts page.

Just because it is on a different page doesn’t mean it has any less importance. The Big Picture is mandatory reading for growth investors and market watchers.

Two tables — the IPOs with best price change and the best performers on the IBD 50 — stay on “What’s The Market Trend?” They identify leading stocks that could become superb investing opportunities.

Your Weekly Review: CBRE, Zebra Craft New Bases

With a fresh market uptrend in place, now is the time to heavily utilize IBD’s stock screens to find a screaming winner.
If you regularly check a multiple number of screens, that’s excellent. You might see a stock appear in several separate screens,…

Williams-Sonoma Outlook Sinks Home Furnishing Sellers

Home furnishing retailers stumbled Thursday on the heels of Williams-Sonoma‘s (NYSE:WSM) weak third-quarter guidance.

The group, down 3%, was one of the session’s biggest losers.

Prior to Thursday’s slide, it ranked No. 56 among the 197 industry groups tracked by IBD.

Williams-Sonoma — which owns the second best Composite Rating in the 13-stock group — plunged 12% in the highest volume of its two-year advance. That can be considered a sell signal.

After the close Wednesday, the San Francisco-based retailer reported Q2 earnings that met consensus estimates and revenue that just missed views.

It said it expects to earn 56-63 cents a share in Q3 on $1.1 billion to $1.13 billion in sales.

That fell short of Street estimates for 66 cents on $1.13 billion in revenue. The retailer also forecast full-year profit of $3.07 to $3.17 a share, below expectations for $3.20.

Its stock, which had broken out past a 73.55 buy point of a short base on Aug. 22, gapped down Thursday. Its loss from that entry is also a sell signal.

Williams-Sonoma’s news apparently weighed on Restoration Hardware (NYSE:RH), a fellow group member whose stock also took a hit late Wednesday. The industry leader gapped down and sank as much as 7% early Thursday, but closed in the upper half of its intraday range, a sign of support.

The stock fell below its 50-day moving average, but continued to form a base. It triggered the eight-week hold rule on June 30 after rallying 24% past a 76.20 buy point in less than three weeks. The hold period expired last week.

The Corte Madera, Calif.-based chain has turned a profit the past three years, snapping a four-year streak of losses. Analysts expect it to boost earnings 35% this year and 26% the next.

While the upscale furnishings chains accounted for most of the group’s losses, selling did not spread to other industry stocks.

Mattress Firm (NASDAQ:MFRM), No. 3 in the home furnishing group by Composite Rating, was little changed.

On Aug. 11, the Houston-based mattress store operator announced preliminary Q2 earnings of 58-61 cents a share on $410 million in sales, above views for 49 cents on $384.6 million in revenue.

The stock shot up 14% that day, surging past a 50.44 flat-base buy point in heavy volume. It’s now 12% above the entry.

Analysts have since lifted their forecast to a per-share profit of 60 cents on $406.6 million in revenue. Mattress Firm is slated to officially report Sept. 4 before the open.

Rival mattress seller Select Comfort (NASDAQ:SCSS) rounds out the top four in the group by Composite Rating. The stock is still working on the right side of a base that kicked off in October and is 16% below its high.

The Minneapolis-based company has faced a slowdown in profit the past seven quarters, but is expected to end that streak with an 11% increase to 40 cents a share in Q3.

Splunk, Avago Up After Hours On Earnings Reports

The stock market closed mildly lower in a slow day leading up to the Labor Day weekend, shaking off worries about Russian troops in Ukraine.
In the stock market today, the Nasdaq finished down 0.3%, the S&P 500 fell 0.2% and the Dow Jones indust…

Nasdaq Drops Mildly As Labor Day Lull Starts Early

Stocks finished mildly lower Thursday, shaking off worries about Russian troops in Ukraine. Volume appeared to have ended lower as the Labor Day weekend approached.
The Nasdaq fell 0.3%; the S&P 500 was off 0.2% and the Dow Jones industrial aver…

Stocks Indexes Fall Modestly, Shaking Off Ukraine Unrest

Major averages showed modest losses with a little over one hour remaining in Thursday’s session — a fairly resilient performance amid heightened violence in Ukraine.

The Dow Jones industrial average and Nasdaq each lost 0.2% while the S&P 500 gave up 0.1%. Nasdaq volume fell 7% from Wednesday’s levels. NYSE was tracking about equal with Wednesday.

In the stock market today, Medicaid provider Centene (NYSE:CNC) reclaimed its 50-day moving average as it works on a potential base. Shares rose 3%. Medicaid has become a growth story, thanks to ObamaCare, and Centene is positioned to be a prime beneficiary.

The S&P Dow Jones Indices announced Wednesday that Centene will move from the S&P 600 to the S&P 400 at the close of trading Sept. 3.

Elsewhere, IBD 50 name Open Text (NASDAQ:OTEX) eased 0.2% in soft volume. The software maker continues to hold gains smartly after its bullish gap up on July 31.

Meanwhile,Regeneron (NASDAQ:REGN) lost 0.1%. It’s trading just underneath a handle buy point of 353.15. Regeneron is presenting detailed alirocumab data this weekend in Spain. Alirocumab is showing promise as an LDL cholesterol-lowering drug.

In earnings news, Williams-Sonoma (NYSE:WSM) took a hit, falling 11% after the home-products retailer reported so-so earnings late Wednesday and issued a disappointing outlook. It forecast Q3 EPS of 58-63 cents a share on revenue of $1.10 billion to $1.13 billion. Analysts had seen earnings of 66 cents and $1.13 billion in sales. Restoration Hardware (NYSE:RH) fell in sympathy, but was sharply off lows. Shares slumped 7% early, but were recently down only 3%.

Autohome (NYSE:ATHM) extended losses after plunging 11% Wednesday in heavy volume. The stock lost an additional 5%. A breakout from a deep cup base was short-lived. Not only did Autohome erase an 11% gain from a 52.08 buy point Wednesday, but it also dropped 8% below the buy point Thursday. Both are sell signals.

In economic news, second-quarter gross domestic product was revised slightly higher than expected to 4.2%.

Arista Networks Breaks Out; Foot Locker Extends Gains

Even though stocks struggled for direction Wednesday, a few leaders still went on to new highs. June new issue Arista Networks (ANET) bolted 6.99, or 9%, to 83.16. The stock blew past a 79.98 buy point from a cup-with-handle base in more than twice its average volume. It closed 4% past 79.98, leaving shares in buying range. Despite the strong price and volume action on its breakout, its base has …

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Long Term, Tech Funds Lag Energy and Real Estate

Tech stocks are often at the forefront of the stock market’s advances, but as a broad group their returns in the past 15 years pale against the energy and real estate sectors.

For example, tech mutual funds have risen an average annual 2.30%, well behind energy funds’ 13.70% and real estate funds’ 11.43%, beating out only communication services funds’ 0.88%, according to Morningstar data. The S&P 500 managed a 4.55% average annual gain.

Several tech funds have performed well above the group average. Waddell & Reed Science & Tech handed investors an average annual 10.55% the past 15 years, though it lags the market this year with a 4% gain v. the S&P 500′s 10%. The fund’s recent holdings included Facebook (NASDAQ:FB).

Columbia Seligman Communications & Information’s recent holdings included Skyworks Solutions (NASDAQ:SWKS). The fund is up 18% this year and has produced an average annual return of 6.28%.

IPO Leaders: Athlon Grows Quickly In Permian Basin

Don’t look now, but several new issues in the energy space have started work on the right sides of bases, including fast-growing oil and gas producer Athlon Energy.
The firm, with a $4.4 billion market cap, went public in August 2013 at 20 and closed …