Key stock index funds rose Thursday as the FANG stocks and other big-cap techs powered big gains in the tech-heavy PowerShares QQQ Trust.
PowerShares QQQ Trust (QQQ) led the upside with a 1.7% gain, while SPDR S&P 500 (SPY) and SPDR Dow Jones Industrial Average (DIA) added a respective 0.7% and 0.8%. Small caps lagged slightly as iShares Russell 2000 (IWM) and iShares Core S&P Small-Cap (IJR) climbed 0.3% and 0.1%, respectively.
The FANG stocks boosted techs. Facebook (FB) gapped up and soared almost 9% to retake its 200-day moving average for the first time in five weeks. After the close Wednesday, the social network reported Q1 results that topped views on both the top and bottom lines. Amazon and Netflix popped about 3% each as both stocks regained their 50-day lines. Alphabet (GOOGL) advanced 1.6% to reclaim its 200-day line.
Intel (INTC) and Microsoft (MSFT) rose more than 2% each on the Dow. Both stocks are 3% off their all-time highs. Apple (AAPL) added 1%. It’s been a tough week so far for the iPhone maker as shares traded below their 200-day line. Analysts expect Apple to earn $2.69 a share on $60.98 billion in revenue when it reports Tuesday.
Chips, technology and biotechs were among the biggest sector fund gainers in the stock market today. VanEck Vectors Semiconductor (SMH) gapped up and rose 2% to retake its 200-day line. Advanced Micro Devices (AMD) surged 14% and regained its 50-day line after an earnings and sales beat late Wednesday, as well as a higher revenue outlook.
Real estate, homebuilders and financials underperformed.
Healthy Play?
Some stock funds are ailing amid volatility in the market, but a health care play that holds Medtronic (MDT) and Abbott Laboratories (ABT) is finding healthy support.
IShares U.S. Medical Devices (IHI) continues to consolidate since marking a record high in late January. It tumbled to its 200-day moving average as the stock market slumped in early February. But the ETF found support and has been trading around its 50-day line since then. If it can climb back to its highs and the market environment improves, the potential buy point would be 193.44.
The $1.7 billion fund, which tracks the Dow Jones U.S. Select Medical Equipment Index, turns 12 years old next month. Health care equipment represented the biggest sector weighting as of Tuesday, at nearly 88% of assets. Life sciences tools and services made up 11.5%, and health care services the rest.
Top five holdings included Medtronic, Abbott Labs, Thermo Fisher Scientific (TMO), Becton Dickinson (BDX) and Danaher (DHR). The five accounted for about 35% of the 55-stock portfolio.
Thermo Fisher has produced a 13% gain through Wednesday’s close, Danaher 8% and Becton Dickinson 7%. Abbott is up 3%, while Medtronic is down 2%. Medtronic has had a rough start to the year. Shares weakened in mid-February after the medical device maker suggested the first use on humans of its Hugo surgical robot could be delayed to 2019. It previously planned to start operating on patients at the end of fiscal 2018, which ends this month.
The fund returned 8.1% year to date through Tuesday, according to Morningstar Inc. That’s far ahead of the S&P 500’s 0.9% loss. Its average annual returns of 16.2%, 20.1% and 13.5% over the past three, five and 10 years have also outperformed the S&P 500. The broader index’s gains over the same periods are 9.8%, 13.1% and 8.9%.
IHI carries a 0.44% expense ratio.
Wednesday’s picks, SPDR S&P Bank (KBE) and SPDR S&P Regional Bank (KRE), saw a mixed finish. Both continue to work on right side of their respective shallow bases.