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Techs Slam Nasdaq Again, Intel Thumped But This Dow Jones Stock Breaks Out

Broad selling across the technology sector hurt the indexes broadly and only a few industry groups showed upside in stocks today. Intel sold off hard, falling more than 8% to 47.68 in more than double usual turnover and undercut its long-term 200-day moving average for the first time since it broke out in September 2017.

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Intel (INTC), which also down ended more than 8% for the week despite reporting a 44% jump in second-quarter earnings per share, had cleared a 36.80 proper buy point in a long saucer with handle during the week ended Sept. 15. Shares rolled 55% to a peak of 57.60 before correcting.

On June 18, a Stock Market Today column noted a sell signal triggered by Intel, when it finished the session just above 53.

The Dow Jones industrial average fell 0.3%, ending a three-day winning streak. But the index of large and megacap companies rose 1.5% for the week and staged a fourth weekly gain in a row.

At 25,451, the Dow Jones industrials still sits 4.4% below its all-time high of 26,616.

Intel was one of four components within the 30-stock Dow Jones industrial average to fall 2 points or more. Ten names surrendered 1 point or more.

The S&P 500 dropped nearly 0.7% for the day. Yet at 2818, the large-cap benchmark still rose 0.6% for the week. The Nasdaq composite slid nearly 1.5%. At 7737, the Nasdaq dropped 1.1% for the week. It lies less than 3% below a 7933 all-time high set earlier this week.

American Express (AXP), however, bucked the sell-off with a 1.3% lift to 103.85. The stock is moving past a 103.34 buy point in a nearly nine-week flat base. Volume picked up in the dying minutes of trade and finished 2% above its 50-day average turnover of 3.57 million shares per day.

Favor those stocks that break out in volume that expands at least 40% above average. In some cases, big volume comes in days, or even weeks, after the actual breakout.

Apple Earnings Coming Up

Apple (AAPL), which reports fiscal Q3 results after the close Tuesday, slumped 2% to 190.33.

Earlier in the week, Apple broke out past a 194.30 buy point in a new flat base but failed to sustain the advance.

Read this Stock Market Today column on several reasons why Apple could sustain its big rally since breaking out back on Jan. 6, 2017.

Small Caps Tumble Too

The Nasdaq 100 lost 1.4% and the S&P SmallCap 600 fell 1.7%.

A 1.6% lift within the semiconductor equipment industry group failed to offset big losses among software, internet content and data storage companies. As many as 18 of IBD's 197 industry groups sank 3% or more for the day. They included security software, enterprise software, solar, gaming software, shoe, jewelry retail, clothing manufacturing and internet content.

ServiceNow (NOW) dropped 4% to 183.95 in vigorous trade and is fighting to stay clear of its 50-day moving average. Earlier this week, the cloud-based IT software firm reported a 123% leap in Q2 earnings to 49 cents a share. That was the biggest year-over-year gain in five quarters.

Sales in the member of IBD's enterprise software industry group grew 41% to $631.1 million, extending a long track record of 30%-plus top-line growth.

Defensive shares didn't do much better.

The Dow Jones utility average fell 0.5% as interest rates stayed firm. Following Friday's report that showed an initial reading of 4.1% growth in the U.S. GDP in the second quarter, the yield on the U.S. Treasury benchmark 10-year bond fell 2 basis points to 2.96%. That's still below a May 17 year-to-date peak of 3.11%.

EA Triggers A Sell Signal

Alphabet (GOOGL), Proofpoint (PFPT), Electronic Arts (EA) and LogMeIn (LOGM) also fell hard.

EA slumped below its 50-day moving average in volume running quadruple its 50-day average, triggering a key sell signal. The gaming software giant reported a 52% drop in earnings to 15 cents a share in the fiscal first quarter.

AmEx Up, But Still Lags The S&P 500

Going back to American Express, the stock's relative strength line, painted in blue in all IBD weekly charts and in MarketSmith, is rising but still not yet hitting new high ground.

A rising RS line means a stock is outperforming the S&P 500.

Last week, the credit card and financial services giant notched a fourth quarter in a row of double-digit earnings growth as profits rose 25% to $1.84 a share.

Revenue rose 11% to $10.71 billion. While that marked a second quarter in a row of slower top-line growth, AmEx stretched its streak of double-digit revenue gains to five straight quarters.

According to IBD Stock Checkup, AmEx gets a decent 88 Composite Rating on a scale of 1 to 99.

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