Institutions sold growth names with abandon and the Nasdaq led the massacre in stocks today, falling more than 2%. At one point, the Nasdaq composite sank as much as 2.7% and fell below the 7500 level for the first time since June 1.
XAt 2 p.m. ET, Apple (AAPL), meanwhile, fell 1.7% to 181.72 in average trade. The megacap tech remains close to testing a 179.04 buy point in a seven-week double bottom. The iPhone giant broke out of that narrow base on May 4, then rallied 8.5% over the next several weeks to reach a new all-time high of 194.20.
Apple, however, is now in danger of erasing those mild gains. Also watch to see if the stock can rebound close to or back above the key 50-day moving average in the coming days. Strong leaders tend to find support near or right at the 50-day or 10-week moving averages during general market pullbacks.
The largest company in the U.S. financial markets by market cap, Apple had departed IBD Leaderboard on June 14 due to lagging action vs. other growth stock leaders. Apple's current market cap: $893 billion on 4.92 billion shares outstanding.
Sell-offs by fellow tech giants Intel (INTC) (down 4.2%, sinking further beneath the 50-day line) and Microsoft (MSFT) (down 2.6%, touching its 50-day moving average for the first time since May 4) are depressing other key indexes.
The Dow Jones industrial average slid more than 1.4% and undercut the 200-day moving average for the first time since a positive reversal on May 3. American Express (AXP) bucked the decline, rising more than 1.4% and roaring off its 200-day moving average.
At least 11 of the 30 components in the Dow Jones industrial average lost 2 points or more. At 24,158, the 30-stock Dow is now down roughly 2.3% since Jan. 1 after rallying a stout 25.1% in 2017.
Institutional investors are showing more concern about the impact that a growing tit-for-tat trade conflict may have on the global economy.
Reuters reported that a government official said on Sunday that the U.S. Treasury department is considering a new policy that would block any company with at least 25% Chinese ownership from buying any U.S. firms with "industrially significant technology."
Large And Small Caps Sell Off
The S&P 500 slumped more than 1.5% and is testing support at its own 50-day moving average, currently near 2715. At 2702, the large-cap benchmark is now 6% below an all-time peak of 2872. (For updates on this story and other market coverage, check Stock Market Today).
Food, utility and other defensive companies gained some ground, but remain laggards since Jan. 1.
The S&P Small Cap 600 fell 1.9%, but still holds bigger year-to-date gains than the S&P 500. At 1022, the 600 still holds a 9.2% year-to-date gain, vs. a 1% lift for the 500.
The growth-centered Innovator IBD 50 ETF (FFTY) raced more than 3.3% lower to 35.07. Volume is running more than triple usual levels as the exchange traded fund wiped out more than five weeks' worth of gains.
Innovator IBD 50 is also now trying to fight to stay above the 50-day line. The ETF rallied 34% in 2017.
Go to any IBD daily chart to see a stock's 50-day average turnover, illustrated as a thin red line drawn across the volume bars. The Innovator IBD 50 trades on average 207,000 shares each day.
Apple's IBD Stock Ratings Today
Returning to Apple, the stock's Accumulation/Distribution Rating has turned a bearish D on a scale of A (heavy accumulation) to E (heavy net selling by funds). Yet the stock has not really fallen much more than the major indexes in recent weeks.
Plus, Apple's long-term uptrend remains intact.
One reason is the company's solid earnings outlook.
While the Thomson Reuters consensus estimate has recently been revised lower, Apple is still expected to grow profit by 25% to $11.49 a share in the current fiscal year ending in September. This represents an acceleration in growth after the Cupertino, Calif., company increased earnings by 11% to $9.21 in FY 2017.
Earnings in the June-ending fiscal third quarter are seen rising 31% to $2.18 a share on a 15% boost in revenue to $52.27 billion as the company expands its digital revenue and gains more traction in new products such as new editions of the Apple Watch.
(Please follow Saito-Chung on Twitter at @IBD_DChung for more commentary on top growth stocks, buy points, sell signals, and financial markets.)
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