The Dow Jones Industrial Average fell nearly 0.1% yet continued to trade in a fairly tight intraday range. The Dow Jones lagged the Nasdaq’s gain of less than 0.2% in the current stock market. Small caps outperformed, as the Russell 2000 rallied nearly 0.6% in midafternoon trading.
Apple (AAPL), meanwhile, continued to underperform the general market. Shares edged up slightly. But at 170, the iPhone and digital services giant continues to dwell below its 200-day moving average. Apple stands nearly 27% below a 233.47 all-time high.
Meanwhile, watch these leading companies in the retail or the retail support space: Five Below (FIVE) (forming a deep cup-type base, 136.23 entry), Shopify (SHOP) (clearing a 176.70 buy point in a long, choppy base), and Chipotle Mexican Grill (CMG) (extended for now after breaking out past a 501.08 entry in a double bottom).
Five Below is likely to report results for the fiscal fourth quarter that ended in January in March.
IBD Stock Checkup shows the Philadelphia-based discount and variety retail chain as ranking No. 1 in Composite Rating with a maximum 99.
The S&P 500 traded flat. It too reflected a “watch and see” attitude by equity traders as the market weighs the potential outcome of more negotiations by U.S. and China trade officials, as well as the conflict between President Trump and a Democrat-majority House of Representatives over funding border security.
The Innovator IBD 50 (FFTY) ETF also outperformed the S&P 500, rising nearly 0.8%.
Leading Industry Groups Today
Among the 197 IBD industry groups today, solar, automaker, restaurant, telecom infrastructure and long-term medical firms led the upside. A nearly 2% drop in WTI crude oil futures hurt oil and gas royalty trust shares, down 1.2%. Managed care, tobacco, gas distribution and diversified insurers also dropped nearly 1% or more.
Shopify is part of the watch list on IBD Leaderboard. The company provides an e-commerce platform for small and medium businesses and is slated to report fourth-quarter results Tuesday. Analysts surveyed by Thomson Reuters see profit climbing 33% to 20 cents a share on a 47% jump in revenue to $327.9 million.
Meanwhile, business software firms continued to flourish.
A New Breakaway Gap
Insperity (NSP) broke out of a cup-type base with a 121.25 standard buy point. The stock, rising more than 14% on a breakaway gap, also surpassed an aggressive entry point at 119.09, 10 cents above the Nov. 8 intraday high.
Due to the breakaway gap, buying shares as close as possible to Monday’s open price of 122.66 is also acceptable.
On Monday, the specialist in payroll administration, workmen’s compensation and personnel records management for small and medium firms posted a 25% jump in fourth-quarter profit to 69 cents a share, beating the Wall Street view by 4 cents. Revenue rose 17% to $966.8 million. That marked the sharpest top-line increase in at least 19 quarters.
The 25% earnings-per-share increase is especially impressive when considering that a year ago, Q4 profit leapt 90%.
Decelerating growth, however, could continue. Prior to the news, the Street was forecasting a 12% pickup in earnings to $1.58 a share in the current first quarter. That would match the smallest gain since Q1 of 2017.
Please follow Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
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