Dow Closing In On Two-Year High (BYD, LO, SOHU, CTV, ARTW)

Stocks posted moderate gains, but after flirting with a two-year high, the Dow was unable to get over the hump, as stocks lost steam late in the day. With both the Dow and Dow Transports closing in on two-year highs, it could be a nice bullish signal if both indices are able to break out. We remain bullish on the market in the near term, expecting a solid close to the year for stocks.

The Modular Building Stocks Index was the top performing tickerspy Index on the day, led by Art’s-Way Mfg Co. (ARTW) with a 15% gain.

Stocks rose on the day, with the Dow up 31 points to 11,164. The S&P added 3 points to 1,186, while the Nasdaq gained 11 points to 2,491. Oil rose 83 cents to $82.52 a barrel, while gold climbed $13.80 to $1,338.90 an ounce.

On the economic front, the National Association of Realtors said existing home sales spiked by 10% in September to an annual rate of 4.53 million from a revised 4.12 million in August. Economists had forecast a September rate of 4.25 million, and the gain was the largest in nearly 28 years.

In earnings news, casino operator Boyd Gaming (BYD) gained 4.9% after posting its third-quarter results. The company recorded net income of $5.6 million, or 6 cents per share, compared to $6.3 million, or 7 cents per share, in the same period last year. Excluding one-time items, Boyd posted 2 cents in adjusted EPS, -3 cents below analyst expectations. Revenue rose by 50% year over year to $540.9 million, which also missed the Street’s $589 million consensus. Two asset managers counted Boyd shares among their top-15 U.S.-listed equity holdings heading into the second half, and 205 tickerspy members hold the stock in their portfolios.

Cigarette maker Lorillard (LO) gained 1.3% after posting better-than-expected third-quarter earnings and revenue. The firm earned $274 million, or $1.81 per share, compared to $235 million, or $1.44 per share, in the year-ago period. Analysts were looking for $1.64 in EPS. Excluding excise taxes, sales totaled $1.07 billion, which was also ahead of the $1.01 billion consesus. At the end of the second quarter, 15 Pros held Lorillard in their top-15 U.S.-listed equity positions, and 127 tickerspy members currently hold the stock in their portfolios.

Sohu.com (SOHU) shares added 13.9% after online games helped the firm beat Wall Street’s Q3 estimates. The company’s net income rose 12% year over year to $38.7 million, or $1.01 per share, while adjusted net income rose 21% to $45.2 million, or $1.16 per share. Revenue was up by 20% to $164.1 million. Analysts were looking for 90 cents in EPS on $156.7 million in revenue.

CommScope (CTV) jumped by 30.5% after the company said the Carlyle Group might take it private for about $3 billion. The deal would be worth $31.50 per share in cash, a 36% premium to the stock’s closing value on Friday. No deal has been reached, and CommScope said it would refrain from commenting further until it is deemed appropriate.

Tags: ARTW, BYD, CTV, LO, SOHU