Two software companies advance on strong earnings, Dow Jones set for third straight gain

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After posting impressive quarterly results, shares of software companies Zscaler (ZS) and DocuSign (DOCU) soared into double digits on Friday morning.

After a short dip, the Dow gained 1%. Still, there was a 1.2% rise in the S&P 500. The Nasdaq Composite rose 1.7%, led by technology companies. Thanks to strong gains in small companies, the Russell 2000 Index jumped 1.6%.

NYSE volume was higher than Thursday, while Nasdaq volume was lower.

After trading at monthly lows earlier in the week, crude oil futures continued to rise into the weekend. The price per barrel of oil rose nearly 2.6% to $86.15. The 10-year Treasury yield, however, fell to 3.26% from 3.28%, but remained around multi-month highs in trading activity.

After breaking below this crucial support level last week, the S&P 500 has rallied and is now trading above its 50-day MA.

Big Picture columnist Tom Dispatch wrote on Thursday, “If the market is to stage a meaningful rally, you must be prepared to act quickly by keeping an eye out for major stocks that are approaching their respective buy targets. There could be a few potential next steps.

Growth stocks to watch outside of the Dow Jones

Although the IBD 50 ETF (FFTY) underperformed the market last week by falling below its 50-day moving average, it gained 1.3% on Friday, making it the best performing ETF in the market. daytime.

Cross Country Healthcare (CCRN), one of the leading stocks in the IBD 50, saw a significant price increase. Despite this, the stock market has recouped some of its early losses and is now up about 1%.

The healthcare staffing firm opened wide, then broke a cup-with-handle buy target of 27.87 before pulling out of entry. Gains of nearly 10% have been made by shareholders this week, and the stock’s relative strength line is now at an all-time high.

Due to the increased need for healthcare workers, Cross Country was one of the companies whose stock price rose due to the pandemic. As a result, the healthcare worker stock reported earnings of 15 cents per share in 2019. In 2020, the number rose to 46 cents; in 2021, it has risen to $3.06. According to IBD’s MarketSmith, analysts expect earnings growth of 53% in 2022, reaching $4.69 per share.

Sociedad Quimica Y Minera (SQM), a fertilizer producer, also exceeded the buy target of 113.80 after breaking out of a cup with a handle pattern. As a result, the stock’s relative strength line hit a new high as it widened 3.7% before stabilizing at a gain of around 1%.

Some of the other top IBD 50 winners were Talos Energy (TALO), SM Energy (SM) and Ovintiv (OVV). On Friday morning, prices for each item rose more than 4% and approached new highs in the form of mugs with handles.

Earnings Season Brings Changes to These Stocks

Shares of Kroger (KR) rose early Friday after the nation’s largest grocery store operator posted earnings above and below analysts’ expectations.

After raising its full-year earnings outlook, shares jumped 5.5% on strong volume. Earnings per share (EPS) came in at 90 cents, up 12% from the same period last year and well above the 83 cents that Wall Street had predicted.

Totaling $34.6 billion, sales were up 9% year over year, just above forecast. As a result, Kroger raised its earnings forecast for the year by 10 cents to $4.95 to $4.05 a share from its June projection.

Zscaler, a cybersecurity company, saw its stock price surge more than 19% after announcing impressive earnings. According to the San Jose, Calif.-based company, adjusted earnings per share were 25 cents, up 78% from 14 cents a year earlier.

Additionally, revenue grew 61% year-over-year to $318.1 million in July-September. For Zscaler, the consensus forecast was 21 cents per share of earnings on $305.4 million in revenue.

DocuSign, an enterprise software provider, rose more than 10% on better-than-expected results, but pared its gains to around 8% afterward.

With quarterly earnings per share of 44 cents on sales of $622.2 million, the e-signature firm soared as results beat Wall Street expectations. But, for now, the title continues its long downward trajectory.

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