NEW YORK — U.S. stocks edged back from record levels Monday as they head for the final stretch of what looks to be their latest winning month.
The S&P 500 slipped 19.27 points, or 0.4%, to 5,069.53 after closing last week at an all-time high. The Dow Jones Industrial Average fell 62.30, or 0.2%, to 39,069.23, and the Nasdaq composite dipped 20.57, or 0.1%, to 15,976.25.
The S&P 500 is on track to close out its fourth straight winning month and is coming off its 15th winning week in the last 17. And the stock market may not have been cheap even when it bottomed out in October 2022. That marked the priciest bear-market low in history, according to some measures of stock prices against corporate earnings, says Doug Ramsey, chief investment officer of Leuthold.
A trader looks over his cellphone Sept. 14, 2022, outside the New York Stock Exchange in the financial district of Manhattan in New York.
This recent rally got going last October amid hopes that inflation is cooling enough for the Federal Reserve to cut interest rates several times this year. Such cuts would relax the pressure on the economy and financial system, while goosing investment prices.
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Expectations are still high for rate cuts to come eventually this year, but traders have been delaying their forecasts following some stronger-than-expected reports on the economy. That data in the meantime raises hopes that growth in profits for companies can strengthen, which helps stock prices too.
Homebuilder stocks were mixed after a report showed sales of new homes strengthened last month by less than economists expected.
Intuitive Machines lost more than a third of its value after the company said its lunar lander may stop working Tuesday after it landed sideways near the south pole of the moon.
Last week, stocks got a big boost after another blowout report from Nvidia added more chum to the frenzy that’s already built around artificial-intelligence technology. Nvidia, whose chips help power AI technologies, rose another 0.3% Monday.
Earnings reporting season for the big companies in the S&P 500 is in its tail end, but this week still offers updates from several big names. They include several that could give color on how well spending by U.S. households is holding up. Such spending has been one of the main reasons the U.S. economy has blasted through expectations for a possible recession.
On the economic calendar, the U.S. government on Thursday will give the latest update on the measure of inflation that the Federal Reserve prefers to use. The hope on Wall Street is that inflation will continue to cool fast enough to convince the Federal Reserve to begin cutting rates by June.
Treasury yields ticked higher in the bond market. The yield on the 10-year Treasury rose to 4.27% from 4.25% late Friday.
7 proven strategies to identify potential breakout stocks and boost your investment portfolio
7 proven strategies to identify potential breakout stocks and boost your investment portfolio
A stock that surpasses its support or resistance level is considered a breakout stock. These levels represent the price points that the stock has struggled to move beyond during a specific period. Breakouts are seen as a strong indicator that the stock is likely to continue its upward trend.
However, identifying breakout stocks that will perform well in the future can be challenging. To spot potential winners, using a combination of analysis and intuition is necessary. It’s important to remember that investing in individual stocks can be risky, and there is no guarantee that a single stock will perform well. If you need help with your investment plan, a financial advisor can play a valuable role in helping spot potential breakout stocks by using their expertise to balance risk and potential rewards.
Bankrate has compiled seven ways to identify and profit from potential breakout stocks.
1. Look for companies with a competitive advantage
If you want to look for stocks that might exceed their resistance level, focus on companies with a competitive advantage. These companies are more likely to outperform their peers, increasing the chance of a breakout. Look for companies with patented technology, strong brand recognition or unique business models. All these factors could give them an edge over their competitors, boosting the chance of a stock breakout.
2. Watch for key market trends
Anyone who deals in stock trades should keep an eye on market trends, and breakout stock traders are no exception. By keeping an eye on market trends, you can identify sectors that may experience growth in the near future. Pay attention to areas where demand is increasing, and where there is room for new players to enter the market.
3. Monitor volume and price
One way to identify potential breakout stocks is by looking for those with increasing volume and price momentum. Breakout stocks often have a sudden surge in trading volume, which may indicate growing investor interest. Additionally, keep an eye out for stocks that are breaking through key resistance levels or forming bullish chart patterns, such as cup-and-handle, ascending triangles or flag patterns.
4. Identify companies with strong fundamentals
To identify promising companies, look for those with strong fundamentals, like increasing revenue, growing profits and positive cash flow. Those indicators suggest that they are doing well financially, and these companies tend to be more likely to break out. You can find these numbers in quarterly reports or with a web search for “(Company name) earnings.”
