U.S. stock indexes pushed to fresh all-time highs Thursday afternoon, as volume continued to rise.
The Nasdaq popped 0.5%, while the S&P 500 and the blue chip Dow Jones industrial average added 0.4% and 0.55%, respectively. Small caps led as the Russell 2000 jumped 1.5%. Volume in the stock market today was up across the board.
Turnover has trended mostly upward in recent sessions. Over the past five sessions, the winning groups include: steel makers, up 9%; consumer loans, up 8%; chip stocks, up 7%; and retail apparel and shoes, up 7%.
Retail is a bit of a surprise. The retail sector is a laggard (No. 22 among 33 sectors) but scored 30 new highs Wednesday, a tally surpassed only by the red-hot banking sector.
Lululemon Athletica (LULU) leapt 15.6% on unexpectedly strong quarterly results reported late Wednesday.
A rotation into retail and apparel would be healthy for the stock market. Strength in retail stocks would suggest an increase in consumer spending is ahead. A recent IBD/TIPP survey found economic optimism in the U.S. has surged to a 10-year high.
Stocks that moved early in the Trump rally have done well. For example, 15 stocks in the IBD 50 broke out in the week of the presidential election. Fourteen went onto double-digit gains and these were sometimes from breakaway gaps. The only stock that didn't pay off was biotech Celgene (CELG), which is now about 5% below its buy point. And that downward move was largely fallout from President-elect Donald Trump's critical comments on drug prices.
The successful breakouts elsewhere confirm the wisdom of an old IBD rule: When the stock market goes to uptrend (as it did Nov. 9), an individual investor should try to buy at least one breakout, and buy additional breakouts if the first stock works.
Since then, the uptrend came under pressure Dec. 1 but then signaled a resumed uptrend Wednesday. Individual investors should again be shopping for breakouts to buy.
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