The major market averages continued to move higher in the second session of the new year, reaching fresh record highs with strong gains among leading chip stocks. The tech-heavy Nasdaq led the way with a 0.6% gain Wednesday, while the S&P 500 and Dow Jones industrial average rose 0.4% and 0.3%, respectively.
X Among the Dow Jones industrial components, IBM (IBM) advanced a Dow-best 3% Wednesday after being upgraded from sector perform to outperform at RBC Capital. The stock recently reclaimed its 50- and 200-day lines, but remains about 13% off a 52-week high.
On the downside, Intel (INTC) dropped 2% — but appeared to find support at the 50-day line — after the Register reported that some Intel chips have a security flaw that will force redesigns in Linux and Windows Operating Systems. Shares are below a 47.40 buy point. Rival Advanced Micro Devices (AMD) moved up 6%, but remains below its long-term 200-day moving average line.
Leading chip stocks were sharply higher in the stock market today following the Register’s report, extending Tuesday’s strong gains. Graphics-chip maker and IBD 50 name Nvidia (NVDA) advanced another 4% to get back above its 50-day line. The stock is building the right side of potential cup-shaped base.
Chip equipment maker Applied Materials (AMAT) rose over 1%, as it approached its 50-day line where it may be finding resistance. Shares have been below that key level since Nov. 29’s sell-off.
Meanwhile, two FANG stocks were moving closer to potential breakouts. Netflix (NFLX) moved up nearly 1%. The video streamer is building a flat base with a 204.48 buy point. Shares were less than 1% away from a potential breakout. Facebook (FB) advanced 1% to move within striking distance of a 184.35 flat-base buy point.
Elsewhere in the IBD 50, PayPal (PYPL) gained nearly 3%, as shares rallied from their 50-day line. The stock is approaching a 79.49 flat-base buy point.
On the downside, China Lodging (HTHT) dipped 3%, giving back a portion of Tuesday’s 10% gain. Shares remain extended from a 142.90 cup-shaped base entry after Friday’s breakout.