Stocks Mixed In Afternoon Trade; Microsoft, PayPal, Proofpoint Soar

Major averages closed mixed Friday, but near the day's best levels as earnings reports once again took center stage.

Big gains from Microsoft (MSFT) and McDonald's (MCD) didn't help the Dow industrials much as the blue-chip index fell 0.1%after a brief move into positive territory. The S&P 500 fell less than 1 point.

But the Nasdaq composite rose 0.3%, helped by strong earnings from Microsoft and PayPal (PYPL). The Nasdaq closed above its 50-day moving average for the first time since Oct. 11

Microsoft gapped out of a flat base with a 58.80 buy point, rising 4.3% to 59.69. PayPal jumped 10.1% to 44.15. It's still in buy range after gapping up over a 41.40 buy point. The stock was featured as an option play in the latest Earnings Preview column.

Volume on the NYSE was tracking higher than Thursday's levels. Nasdaq volume was tracking close to Thursday's levels in the stock market today,

In other news, shares of Reynolds America (RAI) soared 14% after British American Tobacco (BTI) offered to buy the rest of Reynolds it doesn't already own for $47 billion. Shares of British American Tobacco slumped 4%.

Elsewhere, Proofpoint (PFPT) led a rally in security software stocks after reporting strong earnings. Proofpoint, which is now profitable, gapped above its 50-day moving average, rising nearly 11% in very strong volume. The company turned its second straight quarterly profit, with earnings of 19 cents a share nearly tripling the consensus estimate. Sales growth accelerated for the third straight quarter, rising 44% to $99.8 million.

IBD Sector Leader Paycom Software (PAYC) rallied 2.4% to 49.94. It's still below its 50-day moving average as it works on a flat base with a 53.03 buy point.

IBD'S TAKE: For more on what's driving growth at Paycom, check out today's New America story.

Proofpoint 'Continues To Separate From Security Pack' As Q3 Beats

BAT Offers $47 Billion For Rest of Reynolds American