X The major indexes fell mildly in unison Tuesday and volume rose on both exchanges, according to preliminary figures. The action hints at a new instance of heavier than normal institutional selling as investors seek clues to how the British national elections will play out.
The Nasdaq composite and S&P 500 both dropped 0.3%, while the Dow Jones industrial average, seeing four of its 30 components fall 1 point or more, lost 0.2%.
A rally in metals and oil stocks, particularly in gold mining, oil exploration and oil and gas field services, helped blunt the overall market decline. U.S. near-term expiring crude oil futures advanced 1.8% to $48.26 a barrel, further underlining the market's tendency in recent months to hold close to the $50 level.
Gold futures rallied more than 1% to $1,295.80 a troy ounce on the Comex. The heavily traded SPDR Gold Shares (GLD) ETF, meanwhile, gained 1.1% to 123.12 as volume climbed 31% above usual levels. It was the ETF's second upward gap in price in three sessions, a bullish sign for gold. Further gains could mark a shattering of a nearly six-year downtrend that began in September 2011.
Back to equities, a handful of stocks with good IBD SmartSelect Ratings got handed bigger losses than the general market. Such action is normal for the best growth stocks. But if selling intensifies among the key indexes, expect true high-growth companies to fall as much as 1.5 to 2.5 times the market's general decline.
This is why when the key indexes fall 10% or more, you tend to see more stocks fall anywhere from 15% to 25% or more from their 52-week highs. Those that fall the least show the most power and are more capable of building and finishing brand-new bases.
Criteo (CRTO) sank hard for a second day in a row, losing support at the key 50-day moving average. Shares dropped more than 2% to 47.75 in volume running nearly 90% above usual levels. Those who bought at the January breakout past a 44.24 buy point should consider at least selling some shares to preserve profits because the stock has triggered a sell signal.
Criteo is part of IBD's Commercial Services-Advertising industry group, and shows mixed ratings including a decent but not great Composite Rating of 83, an 87 EPS Rating, and an A for Sales + Margins + Return on equity (SMR). However, due to big drops on Monday and Tuesday, Criteo's Relative Price Strength Rating has slid to a mediocre 65 on a scale of 1 to 99. This means that the stock is now performing just 65% of all public companies over the past 12 months.
Check all of a stock's most important gauges of fundamentals, price strength, and level of institutional ownership via IBD's time-saving Stock Checkup tool.
A pair of consumer-spending plays have not triggered sell signals, but they should both be watched carefully for potential weakness. Diet products expert Nutrisystem (NTRI) slumped more than 2% to 50.15 in average volume. The stock is now basing but is seeing stubborn upside resistance at the 50-day moving average. Grubhub (GRUB) fell nearly 2% to 43.76, but volume was dull. The mobile and online food ordering service is holding a slim gain above a 42.35 breakout point.
Grubhub's second-quarter earnings are seen rising 13% to 26 cents a share, which would mark the smallest increase in five quarters. In the year-ago quarter, earnings jumped 35%, making for a tough comparison. But revenue growth continues to stay hearty.
The fast-growing chipmaker still has a lot of ground to recover after last week's breakout past an 84.34 cup buy point quickly turned tail. However, support near 80 and the 50-day line provide some clues that institutional investors are not completely fleeing the stock.
In fact, mutual funds and hedge funds owning shares have climbed nicely in recent quarters, up to 1,610 funds and a combined 192.4 million shares as of the end of Q1 this year, vs. 1,288 funds and 177.8 million shares at the end of June 2016.
After-tax margin also improved nicely, rising 220 basis points to 14.1%, certainly a quarterly record since the company went public in October 2014 at 16 a share.
Shares fell more than 2.6% in after-hours trade but are still sharply extended past a prior flat-base breakout at 58.35. The six-week flat base began forming in early January.
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