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Is Trump Rally Over? Dow Gives Up 20,000; Chevron, Exxon, Alphabet Thumped

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The major averages pared losses into the close Monday but still ended sharply lower. The Dow fell below 20,000; Chevron (CVX) and Exxon Mobil (XOM), down 2% and 1%, respectively, were among the Dow's biggest losers.

Chevron extended its slide beneath the 50-day moving average, which it gapped down below on Friday.

Meanwhile, another Dow 30 component, Apple (AAPL), as well as tech stalwarts Amazon (AMZN) and Facebook (FB) eased ahead of earnings.

The Nasdaq fell 0.8%, while the Dow Jones industrial average and S&P 500 each shed roughly 0.6%. Small-cap stocks lagged, with the Russell 2000 shedding more than 1.3%. Volume was higher across the board vs. Friday, according to preliminary figures.

Oil, fiber optics and transportation stocks led the downside in today's stock market action, while retailers and homebuilders led the upside. West Texas intermediate crude prices fell 1% to below $53 a barrel; gold futures rose 0.6% to $1,197.80 an ounce.

Apple, down more than 1% intraday, pared its loss to 0.3%. Share remain in buy range from a 118.12 cup-with-handle entry cleared Jan. 6. Analysts expect the iPhone maker to report a 2% dip in fiscal Q1 EPS to $3.22 on a 2% sales increase to $77.38 billion. Apple's iPhone 8 will launch this fall. All eyes will be on Apple's earnings, due out after the close Tuesday.

Other big-cap techs also fell but closed off lows. Amazon pulled back 0.6% in average trade and managed to close above an 821.75 cup-with-handle-entry, in buy range. Pacific Crest Securities, which gives Amazon an overweight rating and 905 price target, said in a research note the online retail giant was the clear sales winner for the holiday season.

Wall Street forecasts earnings per share minus items to rise 35% to $1.35 on a 25% revenue increase to $44.7 billion when Amazon reports Thursday after the close.

Facebook, which reports fiscal Q4 results late Wednesday, is also in a buy zone. Shares gave up 0.9% Monday in light trade and are 1% above a 129.37 cup-with-handle buy point. Analysts expect the social network to report a 66% EPS jump to $1.31 on 36% higher revenue to $8.5 billion.

But Alphabet (GOOGL) sank 2.5% in active turnover, pulling back below an 824.40 cup-with-handle entry. Canaccord Genuity raised its price target on the Google parent to 950 from 925, with a buy rating. Alphabet late Thursday reported mixed Q4 results, as earnings missed but revenue beat forecasts.

On the IBD 50, United Continental (UAL) shed nearly 4%, gapping down under its 50-day line before finding support around the 70 level. The stock is shaping a flat base with a 76.90 buy point.

Airlines have hit a rough patch between Friday's capacity expansion worries and President Trump's executive-order-driven immigration ban from select Muslim-majority nations. The airline group fell 2% Monday, with American Airlines (AAL), Delta Air Lines (DAL) and SkyWest (SKYW) down more than 4% each.

Economic data on tap Tuesday include the S&P CoreLogic Case-Shiller home price index for November, Q4 employment cost index, and Chicago PMI and consumer confidence for January.

Companies reporting Tuesday include Advanced Micro Devices (AMD), Aetna (AET), Electronic Arts (EA), Exxon Mobil and MasterCard (MA).

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