Chip stocks rallied Tuesday on Qualcomm's (QCOM) sweetened bid for NXP Semiconductors (NXPI), which helped the Nasdaq composite climb while other indexes fell in afternoon trading.
X The Nasdaq climbed 0.6%. The S&P 500 fell 0.1% and was trying to hold above the 50-day moving average.
The Dow Jones industrial average fell 0.5%, dipping slightly below the 50-day line. Dow component Walmart (WMT) tumbled more than 9% in heavy trading after the largest brick-and-mortar retailer disappointed with its latest quarterly results.
Walmart's point loss single-handedly accounted for the Dow's loss; without Walmart, the Dow would be up. Walmart gapped below its 50-day line, erasing all gains from a breakout past a 100.23 buy point, what had been a gain of nearly 10%. Shares are nearly 6% below the entry and the break of the 50-day line should cause investors who bought near 100.23 to consider cutting losses short.
Market volume was tracking lower compared with the same time Friday. Losing stocks led winners by 9-to-7 on the NYSE and by 8-to-5 on the Nasdaq.
Semiconductor stocks led after Qualcomm raised its buyout offer for NXP to $127.50 per share, or $44 billion. The bid also bolster's Qualcomm's defense against a hostile takeover bid from Broadcom (AVGO).
IBD's chip equipment, chipmaking and fabless chip industry groups were three of the four strongest in today's market, up 2.5% to 3.6%.
Applied Materials (AMAT) is one chip stock to watch. The chip-equipment maker is working on a double-bottom base with a 58.83 entry. The base is late-stage, however.
Financials also were higher, though not necessarily leading the market, as a couple of regional banks broke out.
Sterling Bancorp (SBT) broke out of a flat base, topping a 14.11 buy point in big volume. Seacoast Banking (SBCF) tried to break out past a 27.60 buy point. Volume was heavy but the stock was struggling to rise past the entry. Seacoast is being added to the small-cap S&P 600 before the open Wednesday.
HealthEquity (HQY) rose 3% to a new high. The stock cleared a 14-week pattern, but it had already broken out of a cup-with-handle buy point at 52.53. HealthEquity is a member of IBD Leaderboard at Investors.com.
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