Dow Jones Lags Again As Nasdaq Rises; Will This Top-Rated Leisure Stock Win Big In 2018?

The Dow Jones industrial average struggled to recover Wednesday's minor losses and traded near breakeven, but the Nasdaq composite continued to exert market leadership in afternoon trading Thursday.

Boosted by strength in leisure, software and select medical stocks, the Nasdaq composite rose 0.3%, on top of Wednesday's positive reversal in which the leading U.S. equities benchmark reversed from a 0.8% loss to a 0.3% gain. The Nasdaq 100, also seeking its fourth straight advance, rose 0.4%. Nasdaq volume is running higher vs. the same time Wednesday.

The S&P 500 edged 0.1% higher on the back of gains in the gaming, airline, generic drug, medical services and tobacco industries. The small-cap S&P 600 was off less than 0.2% but still leads its large-cap elder with a year-to-date advance of almost 2%.

Airline stocks rallied, helping trim the Dow Jones transports' loss to less than 0.2%.

American Airlines (AAL), United Continental (UAL) and Southwest Air (LUV) all hustled 1% to 2% higher, but none of the three are breaking out yet. They are forming bases.

Meanwhile, Booking Holdings (BKNG) is reasserting leadership as shares jumped nearly 1.5% to 2,154. The fifth straight advance has hoisted the company, formerly known as Priceline Group, out of a seven-month cup-style base with a 2,068.09 buy point.

On Feb. 28, the stock gapped up powerfully in heavy volume following a solid fourth-quarter report (EPS up 19%, revenue up 19% to $2.8 billion).

Shares remain in buy range. The permissible buy zone goes up to 2,171.49, or 5% above the proper buy point. The decline within the base was nearly 22%, too deep for a flat base.

Booking has delivered consistent top and bottom line growth over the years. In 2009, the megacap leisure play earned $8.52 a share; in 2017, it posted a net profit of $77.03 a share.

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The Street sees earnings rising 13% to $86.86 a share this year and up another 14% to $99.15 in 2019.

Travel is apparently a major priority for discretionary spending among many generations of Americans, and the rise of the Chinese middle class has led to a huge desire to travel not just to the major metropolises of Beijing, Shanghai and Shenzhen, but outside the Middle Kingdom as well, Zak Dychtwald writes in his book "Young China: How The Restless Generation Will Change Their Country And The World."

Booking holds a Composite Rating of 91 on a scale of 1 to 99 within IBD's Leisure-Travel Booking industry group, as seen in IBD Stock Checkup. The best growth companies tend to show a Composite of 90 or higher at the start of their big price runs.

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