Earnings Fuel Dow, Nasdaq Tops 6000; CAT, Netflix Hit Buy Points – Investor's Business Daily

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Loading the player…Strong gains continued in the stock market for a second consecutive day. The Dow Jones industrial average paved the way with a 1.1% gain at lunchtime in New York on Tuesday, driven by a number of bullish earnings releases among its components. The Nasdaq and S&P 500 followed up with milder 0.6% rises as the tech composite claimed the 6000 mark.

 Among the Dow industrials, heavy-equipment maker Caterpillar (CAT) surged more than 6.6% out of a flat base after reporting Q1 earnings that handily surpassed the Street’s estimates. This morning’s gap-up put shares well above the flat base’s 99.56 buy point, but shares remain within buy range.

Other Dow earnings reporters McDonald’s (MCD) and DuPont (DD) provided more fuel to the Dow’s fire early Tuesday. Both beat Q1 earnings and sales estimates. McDonald’s jumped 4.6% and is now extended above a 130.10 entry, while DuPont traded 2.6% higher.

Strength in financials continued in the stock market today with Morgan Stanley (MS) and Bank of America (BAC) rising 1.3% and 2.5%, respectively. Both global banks are facing a key test of their 50-day lines, which have transitioned into resistance areas. Small-cap regional bank Seacoast Banking (SBCF) extended its win streak to seven days; shares are barely within buy range from last week’s cup-with-handle breakout. The base showed a 24.48 entry.

Netflix (NFLX) surged on Tuesday after announcing it had entered China by signing a licensing agreement with iQiyi, the Chinese online video service. Shares moved up almost 5% on their way into all-time highs, topping a 148.39 buy point from a three-weeks-tight consolidation.

On the downside, homebuilders drastically underperformed for a second straight day. PulteGroup (PHM) reported Q1 revenue that disappointed the Street, sending shares to their lowest level since a Feb. 27 cup-with-handle breakout. Gains from the 22.09 entry, which had exceeded 10%, have all but disappeared as the shares pierced the 50-day line in heavy volume. Shares fell 4.2%, but they have rebounded from their intraday lows. Fellow homebuilder Toll Bros. (TOL) fell 1.5%, but appears to be finding support at its 50-day line.

Among leading growth stocks, China education providers New Oriental Education (EDU) and TAL Education (TAL) paced the advancers, with rises of 7.2% and 3.8%, respectively.

On the downside, biotech Bioverativ (BIVV) fell 1.5%.

RELATED:

Dow’s Caterpillar Breaks Out Into Buy Zone, Steamrolls Earnings Estimates

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