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Stocks Slip Despite Retail Rally; Are Apple, Microsoft In Reach?

The major market indexes were lower Friday despite big gains from a number retailers including Foot Locker (FL) and Ross Stores (ROST).

X SPDR Dow Jones Industrial Average (DIA) fell 0.4%, PowerShares QQQ Trust (QQQ) gave up 0.3% and SPDR S&P 500 (SPY) dipped 0.2% in the stock market today. But emerging markets and small caps rallied as iShares MSCI Emerging Markets (EEM) rose 0.7%, while iShares Core S&P Small-Cap (IJR) and iShares Russell 2000 (IJR) gained 0.5% each.

Wal-Mart (WMT), Intel (INTC) and Coca-Cola (KO) weighed on the Dow with declines of about 2% apiece. But Nike (NKE) gapped up and leapt more than 3%, running past a 57.35 buy point of a cup with handle in above-average volume.

Among sector funds, chips, utilities and real estate led the downside. VanEck Vectors Semiconductor (SMH) fell nearly 2% from its Thursday record high. Applied Materials (AMAT) reported better-than-expected fiscal Q4 results and boosted its current-quarter guidance. Shares surged initially but reversed lower.

Retail, energy and gold miners bucked the decline. SPDR S&P Retail (XRT) gapped up and rose almost 3% to retake its 200-day moving average for the first time in over two months.

Retailers including Foot Locker, Hibbett Sports (HIBB) and Abercrombie & Fitch (ANF) scored double-digit gains following their earnings reports. Gap (GPS) and Ross Stores broke out of bases after their quarterly results.

Oil ETFs were mostly higher as West Texas intermediate crude prices surged 2.6% to $56.59 a barrel. Gold futures rose 1.3% to $1,2394.60 an ounce.

Big-Cap Techs In Reach?

Think hot stocks like Apple (AAPL), Microsoft (MSFT) and now Wal-Mart (WMT) are out of buy range?

On an individual-stock basis, they are technically extended. But you can still gain access to such names via an exchange traded fund that holds those stocks and is itself in a buy zone. For instance, a solid rebound off the 50-day moving average can set up a potential buy opportunity for ETFs.

Schwab Fundamental U.S. Large Company (FNDX) remains in buy range as it bounces off the support line. Shares advanced 5% from an early-September pullback to the 50-day line to their Nov. 7 intraday high.

The $3.4 billion fund, launched in August 2013, tracks the Russell RAFI US Large Company Index. The index comprises big-cap companies that are weighted based on fundamental measures of size, including retained operating cash flow, adjusted sales and dividends plus buybacks. That tends to lead to stocks with more of a big-cap value tilt than those trading at higher valuations, according to Morningstar Direct.

Information technology accounted for the biggest sector weighting as of Nov. 15 at about 17% of assets, followed by 14% each in financials and energy. Consumer discretionary represented 12%; health care and industrials made up roughly 11% apiece. The top 10 holdings included Exxon Mobil (XOM), Apple, Chevron (CVX), Microsoft and Wal-Mart, which soared 11% Thursday to a record high after Q3 earnings and sales beat analyst expectations.

Apple had a fine day too, gaining 1.2% to end a five-day losing streak. Shares are extended from a 160.97 cup-with-handle buy point cleared on Oct. 27. An analyst said the iPhone maker could hit a market cap of $1 trillion next year if, among other factors, Apple sees a major iPhone upgrade cycle.


IBD'S TAKE: On the lookout for ETF ideas that may be worth a closer look? Check out IBD's weekly ETF Leaders column for a featured fund and a list of highly rated ETFs.


FNDX has generated a 10.2% return this year through Nov. 15, trailing the S&P 500's 16.6% gain. It also lags the benchmark index over the past three years, with an average annual return of 8.1% vs. the S&P 500's 10.2% advance.

The ETF carries a 0.25% expense ratio.

Thursday's pick, Vanguard High Dividend Yield (VYM), also remains in buy range from a Thursday bounce off its 50-day line. The ETF also owns Microsoft and Exxon among its top holdings.

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