A midsession rebound faded Thursday afternoon, as the S&P 500 and Nasdaq today fell below their important 200-day moving averages.
XThe S&P 500 dipped below the 200-day line, trading with a 1.1% loss. That's extending a moderate pullback for the market. The Nasdaq slipped below its 200-day line for the first time since Feb. 21. The composite was down nearly 1.4% and at session lows.
Larger Nasdaq stocks were even weaker, as the Invesco QQQ Trust (QQQ) showed a more than 1.4% decline for the Nasdaq 100-tracking ETF. Amazon.com (AMZN) and Facebook were down 2.5%. Alphabet lost more than 1.5%. The QQQ ETF traded below its 200-day line as well.
The Dow Jones Industrial Average slipped around 1%. Walgreens Boots Alliance (WBA) fell 2.2% and headed for its sixth straight decline in heavy volume. The stock hit a nine-month low and has lost 15.5% this month, after the company warned of pressure on reimbursements.
The Russell 2000 was off 0.8%. The small-cap benchmark is down more than 4% this week, about double the losses of the Nasdaq and S&P 500.
Volume was higher vs. the same time Wednesday. If that trend holds up, it would be a new indication that institutional investors are taking profits. Declining stocks led advancers by a 2-1 ratio on the NYSE and by 11-to-5 on the Nasdaq.
So far, however, the market pullback seems normal and not exactly a surprise.
Leading Stocks Hold Up Better
Leading stocks' losses were less than those of the major indexes. The Innovator IBD 50 ETF (FFTY) was down 0.6% in afternoon trading. The relative strength in top-rated stocks was a positive aspect for the market.
The software sector led after several days in which the No. 1-ranked IBD sector came under some pressure. Education, database, gaming and cybersecurity-software industry groups were among the day's top 20 of 197 groups.
Utilities, food producers, alcoholic beverage companies and home care providers — all of the defensive plays — also were in the top 20 groups.
Even in the IBD 50, much of the leadership was defensive. Of 18 stocks up at 2 p.m. ET, five were real estate investment trusts. Others included gold miner Kirkland Lake Gold (KL) and pipeline operator Tallgrass Energy (TGE).
Atlassian (TEAM), Palo Alto Networks (PANW), Trade Desk (TTD) (today's IBD 50 Stock To Watch), Paycom (PAYC) and Fortinet (FTNT) led the software sector higher. Trade Desk, a Leaderboard stock, belongs to IBD's Commercial Services-Advertising industry group. The industry ranked No. 16 for six-month price performance in the daily rankings of 197 IBD industry groups.
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