The major market averages snapped back early Monday with big gains in the stock market today amid the easing of trade war concerns. Top retail stock and Leaderboard member Lululemon (LULU) fell ahead of its quarterly earnings announcement late Tuesday.
The Nasdaq looked to recoup a portion of last week’s 6.5% fall. The tech-heavy composite remains below its 50-day line after the day’s 1.8% rise. Meanwhile, the S&P 500 and Dow Jones industrial average moved up 1.7% and 1.8%, respectively. Both are looking to find support at their 200-day moving average lines.
Among the Dow industrials, Microsoft (MSFT) rallied nearly 6% after Morgan Stanley raised its price target on the software firm from 110 to 130 early Monday — an 18% increase and nearly 50% above Friday’s closing price. Shares triggered a sell signal on Friday when they fell more than 7% below a 96.17 flat-base entry.
Among companies reporting earnings, yoga-gear maker Lululemon will report after the close Tuesday. The stock has been fighting for support at its 50-day line since early February and had been holding up well during the market’s recent weakness. The stock’s relative strength line — the blue line painted on every MarketSmith and IBD daily and weekly charts — is at a new high, signifying that the stock has been markedly outperforming the general market. Shares were mostly unchanged Monday.
Red Hat (RHT) will announce its Q4 earnings after the close. Analysts expect the Linux software maker to earn 81 cents per share on revenue of $762 million. Shares are in the midst of a two-week pullback, but are still nicely above the 50-day line. Shares moved up 3% Monday.
FANG stocks Netflix (NFLX) and Amazon.com (AMZN) advanced 3.5% and 2.5%, respectively. Both top stocks have held up well in the midst of the market’s weakness and have been trending nicely above their 50-day lines.
On the downside, Facebook (FB) fell about 2%, as it continued lower after last week’s near-14% decline. Shares broke down through the long-term 200-day line and are about 20% off their 52-week high.
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