Key equity indexes gapped down at the open and stayed down in the stock market today, as Apple (AAPL) weighed on the Dow Jones industrials and the Nasdaq composite.
XThe Nasdaq sank 0.8%, the S&P 500 shed 0.5%, and the Dow Jones Industrial Average gave up 0.4%. Small caps as tracked by the Russell 2000 lost 0.9%. Preliminary data showed volume rising on both the NYSE and Nasdaq vs. Friday.
The Dow Jones index was down 178 points at one point during Monday's session, bringing its two-day loss to as much as 222 points. But it remains near its Wednesday record high and at its best close since Oct. 2.
Apple and Merck (MRK), down about 2% each, weighed on the Dow Jones index. Apple gapped down after a Rosenblatt Securities downgrade to sell from neutral, citing "fundamental deterioration" in the next six to 12 months due to "disappointing" iPhone sales. The stock continues to work on a base with a 215.41 buy point.
Boeing (BA) also pressured the Dow with a 1.3% drop. A Saudi Arabian airline canceled a $6 billion order for 30 Boeing 737 Max planes, which continue to face scrutiny after crashes. The model has been grounded in the U.S. and may not return to service before the end of the year. The SEC is also reportedly probing Boeing's financial disclosures related to the jet's grounding.
Boeing has been consolidating the past four months, but is now back below its 50-day and 200-day moving average lines. Boeing stock is 21% off its high.
Dow Jones Winners
Bright spots on the Dow included consumer plays such as Nike (NKE), Procter & Gamble (PG) and Walmart (WMT).
Strong U.S. jobs data Friday lowered expectations for a big rate cut, though the Street still expects a cut at the Fed's July 31 meeting. Yardeni Research said in a note it still sees "no rate cut," which could "put more downward pressure" on the stock market this month. Fed chief Jerome Powell will testify before the House Financial Committee and Senate Banking Committee this week.
Chips, banks and telecom-related stocks led the downside among industry group losers. But discount and specialty retailers, as well as restaurants, bucked the decline.
Breakout Stocks
Chipotle Mexican Grill (CMG), up 1.1%, climbed past the 749.34 buy point of a three-weeks-tight pattern before settling slightly below the entry. The fast-casual burrito chain joined IBD's Leaderboard list of elite stocks early Monday. Darden Restaurants (DRI) added 1.1% to mark a new closing high.
Over in the IBD 50, China stocks New Oriental Education (EDU) and Baozun (BZUN) lost a respective 5% and 2.5%. But tech services provider Epam Systems (EPAM), software firm Atlassian (TEAM) and yogawear chain Lululemon Athletica (LULU) gained 2% or more apiece. Epam broke out past the 180.65 buy point of a flat base. Volume ran 31% higher than usual.
The Innovator IBD 50 ETF (FFTY) slipped 0.5% in the stock market today. The growth-stock ETF has rallied 27% this year, outpacing the S&P 500's 19% year-to-date gain.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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