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Stock Market Falls Again, But Dow Jones On Track For Monthly Gain

The Dow Jones Industrial Average and other key indexes reversed sharply lower in the stock market today. But they closed off session lows to end a volatile week that included a formal impeachment inquiry of President Trump.

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Major indexes opened higher Friday. But they began selling off after a Bloomberg report that the White House is weighing putting limits on portfolio investments in China as well as delisting Chinese stocks from U.S. exchanges. That could heighten tensions in the U.S.-China trade war.

The Nasdaq dived 1.1%, the S&P 500 stumbled 0.5% and the Dow Jones industrials fell 0.3%. Small caps tracked by the Russell 2000 shed 0.8%. Preliminary data showed higher volume on the NYSE and Nasdaq.

With Friday's losses, the Nasdaq fell further below its 50-day moving average, while the S&P 500 tested the support line. The Dow Jones index remains 1% above its 50-day line. For the week, the Nasdaq sank 2.2%, the S&P 500 shed 1%, and the Dow gave up 0.4%. Though the Dow shed nearly 400 points the past two weeks, it still holds a 417-point, or 1.5% gain, for September.

Several Dow Jones heavy hitters fell 1% or more each, including Microsoft (MSFT), Chevron (CVX) and Disney (DIS). Microsoft, down 1.3%, tested its 50-day line. But volume was below average and a flat base with a 141.77 buy point is still intact.

Chevron, down 1.3% in average trade, breached its 50-day line Thursday. It's still working on a flat base with a 127.44 buy point. Light sweet crude prices slid 1.1% to $55.81 a barrel.

Disney Slips Further

Disney eased 1%, also in below-normal turnover, to close at its lowest level since mid-April. At 11% off the left-side high of its current pattern, it's still in flat-base range. Recent signs of institutional selling include an E Accumulation/Distribution Rating and a 0.9 up/down volume ratio.

Health-care-related names bucking the decline included Pfizer (PFE), up 1.2%, and Walgreens Boots Alliance (WBA), up 0.6%.

Also in the Dow, Intel (INTC) down as much as 1.1%, pared its loss to 0.3%. Chip stocks have been volatile in recent months, since many rely on China for parts. Intel is 14% off its 52-week high. Friday's China news pressured chip stocks, but so did disappointing guidance from Micron Technology (MU).

The memory-chip maker's stock gapped down and plunged 11% in triple normal trade, closing well below its 50-day line for the first time in three months. Micron late Thursday delivered an earnings and sales beat for fiscal Q4. But the stock sold off Friday on lower-than-expected current-quarter guidance.

VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) shed more than 2% each to test their respective 50-day lines. Both ETFs are still near record highs: SMH is 4% off its high and SOXX, 5%.

Solar, software and chip equipment makers led the downside, while department stores and other select retail groups advanced.

Over in the IBD 50, InMode (INMD) crashed 16% in heavy trade. It triggered sell signals by giving up a 23% gain from a 23.83 buy point of an IPO base and falling more than 7% below the entry.

China gaming platform Huya (HUYA) skidded 10% to test its 50-day average. New Oriental Education (EDU), down 6%, slid below its support line. An ascending base with a 115.98 buy point remains intact, for now.

The Innovator IBD 50 ETEF (FFTY) dropped 2.6% to fall back below its 200-day line.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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