Growth stocks made an impressive reversal on Monday, but the early sell-off in stocks briefly sent the key S&P 500 briefly below a November short-term low. Such action reaffirmed the increased whipsawing action on Wall Street.
XMeanwhile, fast-growing companies are fighting to hold near or at their long-term 200-day moving averages, such as retailers Five Below (FIVE) and Ulta Beauty (ULTA). Others, such as Atlassian (TEAM), ServiceNow (NOW) and turnaround restaurant play Chipotle Mexican Grill (CMG), are fighting to stay above their medium-term 50-day lines.
Leaderboard stock Verizon Communications (VZ) bounced bullishly off its 50-day moving average. It rose 1% to end a four-session selling streak. The megacap telecom play had broken out of a base on base with a 55.31 buy point.
The S&P 500, down as much as 1.9% in the early going, finished the rocky session up nearly 0.2%. The Nasdaq composite showed a similar swing, going from a 1.3% intraday meltdown to an advance of around 0.7%. The Nasdaq 100-tracking Invesco QQQ Trust (QQQ) ETF jumped 1%.
The Dow Jones industrial average rose about 0.2%. Volume edged higher on the NYSE and fell mildly on the Nasdaq, according to early data. The Dow utility average rose nearly 0.4%, but the Dow transports fell more than 0.7%.
The Nasdaq composite refused to undercut the 6830 low set on Nov. 20. The next session, the tech-heavy Nasdaq rose, marking Day 1 of a new rally attempt. Then on Nov. 28, the composite issued a Day 5 follow-through following comments by Federal Reserve chief Jerome Powell on the future prospects for more rate hikes in 2019.
Interest Rate Hike Prospects Diminish
The heavy selling in stocks and corporate investment-grade bonds has been so severe that the CME Group now reports a less than 50% chance of a single quarter-point hike in the fed funds rate in all of 2019.
The U.S. central bank has raised short-term rates three times in both 2017 and in 2018. The Street still expects a fourth quarter-point jump in the fed funds rate at the end of this year's final FOMC meeting on Dec. 18-19.
Meanwhile, Apple (AAPL) staged a positive reversal, gaining less than 0.5% after hitting a session low of 163.33. At that price, the iPhone, Apple Watch and digital services giant has now fallen 30% from an all-time peak of 233.47.
Market breadth remained dour.
On the Nasdaq, losing issues beat winners by a nearly 3-2 margin. On the NYSE, losers topped winners by more than 2 to 1.
On the Dow, JPMorgan Chase (JPM) was one of just three components to fall 1 point or more. The banking titan briefly fell below 100 for the first time in more than a year. Other large banks have been doing worse. Bank of America (BAC) fell more than 2%, hitting lows last seen in September.
JPMorgan is trading around 14% below a 52-week high while Bank of America is 23% below its recent peak of 33.05.
In Other Financial Markets
Sellers returned in crude oil. WTI futures sank more than 3% to $50.84 a barrel. Gold and silver fell modestly.
The yield on the benchmark U.S. Treasury 10-year bond edged 1 basis point lower to 2.84%.
Please follow Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
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