Stock indexes rebounded Monday after selling off early on disappointing earnings for Wall Street bank heavyweights Goldman Sachs (GS) and Citigroup (C).
XThe Dow Jones Industrial Index, S&P 500 and Nasdaq all fell about 0.1% for the day, while the tech-heavy Russell 2000 was off 0.5%. All of the indexes were down early, but closed near their intraday highs by day's end.
NYSE volume fell 17%, while Nasdaq volume declined just under 7%, according to early data. This signaled institutions were sitting on the sidelines.
Goldman fell 3.3% on heavy volume after Q1 earnings dropped sharply. Citigroup was off 0.1%, also on above-normal volume, but still remains above its 66.93 buy point after pulling out of a 28-week cup with handle three weeks ago. Bank of America (BAC), dropped 1.4%.
Streaming Battle Heats Up
Also on the downside, Netflix (NFLX) continued to decline following Friday's big sell-off. Netflix plunged 4.5% Friday and another 1.4% Monday, following Disney's (DIS) announcement last week of its Disney+ video streaming service. At a cost of $6.99 a month, Disney+ is expected to create intense price competition for Netflix. Netflix is due to report earnings after Tuesday's close.
Netflix stock has been moving sideways in a 42-week consolidation pattern. But in recent days Netflix stock pierced the key 50-day average line on the downside in heavy volume.
Major Chinese names also declined, including Alibaba (BABA), off 2.8%, Baidu (BIDU), down 2.8%, and Chinese retailer JD.com (JD), which fell 2.9%. Chinese GDP data for the first quarter comes on Wednesday. Also, the planned merger of China's two major MSCI stock indexes has been postponed until November. That has forced institutions to sell holdings of companies in the indexes.
Big Cap Winners
But not all was doom and gloom on the big exchanges.
Waste Management (WM) gapped up 2.5% after announcing it would buy Advanced Disposal Services (ADSW) for $2.9 billion. Advanced Disposal stock surged 19% on the news.
Elsewhere, Fortinet (FTNT), No. 3 on IBD's Big Cap 20 Stock List, jumped 2.7% and is now 7% extended above its 88.70 buy point. Fortinet stock has earned a 99 Composite Rating from IBD, the highest possible for both technical and fundamental stock performance metrics. In addition to being No. 1 in the Computer Software-Security Group, Fortinet has a 98 EPS Rating.
Palo Alto Networks (PANW) rose 1.4% as it continues to make a flat base. Shares trade 5% below a 260.73 buy point. Palo Alto Networks stock has a 99 Composite Rating and a 99 EPS Rating.
Australia-based software managerial team-builder Atlassian (TEAM) rose 1.4%, and is now 27% extended above its 89.92 buy point.
Another name on the Bid Cap 20 list, cable provider Comcast (CMCSA), rose 1% and is now just above its 40.62 buy point, coming out of a lengthy cup with handle base.
Earnings Season Arrives
Meanwhile, Innovator IBD 50 ETF (FFTY) was nearly flat, bolstered by strong gains in Fortinet and Atlassian, which is due to release earnings on Wednesday.
Earnings season will see a flood-tide of reports this week. Major companies expected to report earnings include financial names Bank of America, Morgan Stanley, American Express (AXP), household products company Johnson & Johnson, computer services giant IBM (IBM), streaming video pioneer Netflix, Alcoa and PepsiCo, among others.
Please follow Jones on Twitter at @IBD_TJones for more on growth stocks, financial markets and the economy.
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