Dow Industrials In The Upside Lead; Optical Firm II-VI Roars Ahead

Blue chip firms paced the market’s upside, with the Dow Jones industrials leading the way with a 1.5% gain at Wall Street’s lunchtime hour.

Meanwhile, a few high-growth stocks pocketed rich gains, thanks to some nifty earnings surprises. Both the optics and laser technology firm II-VI (IIVI) and Virginia-based homebuilderNVR Inc. (NVR) roasted quarterly profit forecasts and shot higher in heavy trading.

The S&P 500 trailed the Dow with a 1.1% advance; the Nasdaq composite followed with a 0.7% rally. Volume was tracking fractionally higher on the NYSE and sharply up on the Nasdaq.

In the stock market today, II-VI posted a 25% jump in December Q2 profit to 30 cents a share, scorching the consensus view by 11%. That marked the fifth quarter in a row of double-digit EPS increases. The average year-over-year increase over that time frame was 32%.

Officials cited nice gains in its photonics segment, which also saw robust sales. Overall, net sales climbed 8% to $191.4 million, the biggest revenue increase in five quarters. CEO Francis Kramer noted that the company’s book-to-bill ratio improved to 1.08, signifying accelerating orders.

II-VI’s Relative Strength Rating is solid at 87 as seen on IBD Stock Checkup. On a daily chart, one can see its RS line, which tracks a stock’s price movement vs. the S&P 500, is scaling higher quickly, a good sign. The stock is trying to barrel through persistent resistance near 19.50. Average volume is rather thin at 295,000 shares, but the stock regained its 50- and 200-day moving averages early Tuesday, a promising sign.

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