The major averages closed with heavy losses as the weeklong market slide came to an important test.
X The Dow Jones industrial average led with a 4.6% loss, or nearly 1,200 points, after losing nearly 1,600 points earlier. The S&P 500 index lost 4.1%. Both indexes fell through their 50-day moving averages. A bounce from the line would be a positive sign. But if either index falls much below the 50-day line, the market could have even further to drop.
The Nasdaq composite was off 3.8%, below its 50-day line. The composite had a better performance than the Dow and S&P in the hot January market rally.
Volume was higher than at the same time Friday. Market breadth continued to deteriorate: Declining stocks led advancers by nearly 6-to-1 on the NYSE and 5-to-1 on the Nasdaq.
Exxon Mobil (XOM) and Chevron (CVX) pressured the Dow industrials again. Both oil companies sold off Friday after their earnings reports. Exxon Mobil drilled down nearly 6% and pierced its 200-day moving average. Chevron lost 5.2% and is 15% below its January high.
The two certainly aren't alone: The SPDR Energy ETF (XLE) is down 10% from its prior high and also falling below the 50-day line.
Industry groups in the energy, building, health care and banking sectors were some of the weakest in today's market.
Johnson & Johnson (JNJ) and Pfizer (PFE), two Dow components that also have been selling off since reporting earnings, were off more than 5%. J&J fell below its 50-day line, while Pfizer violated the 20-day average.
Most IBD 50 stocks were lower also, but some are holding up above the 50-day line. Fourteen of the 50 are trading below the 50-day moving average. Grubhub (GRUB) fell below its 50-day line Monday after Raymond James cut the rating to market perform from outperform. Earnings are due Thursday before the open.
On average, the IBD 50 stocks are down more than 8% from their 52-week highs, an average that has been skewed lower by big decliners such as PetMed Express (PETS), Five Below (FIVE) and Daqo New Energy (DQ).
In one breakout of note, Oppenheimer Holdings (OPY) briefly cleared the 28.85 buy point of a cup-with-handle base. Volume was more than double its average, and the relative strength line made a new high. But shares fell back below the entry point amid the market plunge.
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