The stock market today sold off hard as U.S.-China trade concerns remained squarely in focus, sending the Dow Jones Industrial Average and other key indexes sharply below a key technical gauge.
XThe Nasdaq plunged 1.7%, the S&P 500 dived 1.6% and the Dow Jones industrials shed 1.2%. Small caps tracked by the Russell 2000 sank 1.6%. Preliminary data showed higher volume on the NYSE and Nasdaq.
All three major indexes fell well below their 50-day moving average lines at the open, failing a key test of support. They closed at or near session lows.
Stocks gapped down at the open amid worries about upcoming China trade talks. They pared some losses after Fed chief Jerome Powell signaled openness to further rate cuts. But the market headed sharply lower after the U.S. imposed visa bans on Chinese officials for human rights violations against Muslims in Xinjiang.
Only one Dow Jones stock avoided the rout: Walmart (WMT), up 0.3%. It remains in potential buy range, though all purchases are riskier than usual with the market uptrend under pressure. Walmart's proper buy point is 115.03.
Cisco (CSCO) and Dow (DOW), the two biggest blue chip losers, fell nearly 3% each. Cisco is 19% off its high and Dow, 26% below its peak. IBM (IBM) and JPMorgan (JPM) lost more than 2% each. Another 17 Dow stocks gave up more than 1% apiece.
Chip Stocks Hit Hard
With the current administration on Monday blacklisting eight more Chinese tech companies, U.S. chipmakers tumbled.
Video-chip maker Ambarella (AMBA) plunged 10%, gapping down below its 50-day line in heavy trade. Ambarella gets about 20% of its revenue from two of the companies on the blacklist, according to KeyBanc Capital Markets.
Other chip stocks selling off more than 3% apiece included Marvell Technology (MRVL), Monolithic Power Systems (MPWR) and Nvidia (NVDA).
VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) gave up 2.6% and 3.1%, respectively. Both ETFs are testing their 50-day lines.
Software, chip and other computer-related stocks led the downside among IBD's 197 industry groups. But gold miners, automakers and airlines bucked the downtrend.
Atlassian (TEAM) skidded 6% in fast trade. It's been consolidating below its 50-day line as a new base forms. But at 17% off its prior high, Atlassian has some work to do. Other software stocks down more than 3% each included Workday (WDAY), Upland Software (UPLD) and Veeva Systems (VEEV).
Among IBD 50 winners, SolarEdge Technologies (SEDG) rose 2% and Kirkland Lake Gold (KL) gained 2.9%. Both stocks recently found support at their 50-day lines.
Gold miners led the few sector ETFs scoring gains. VanEck Vectors Junior Gold Miners (GDXJ) and VanEck Vectors Gold Miners (GDX) rose nearly 3% each. Gold prices climbed 0.5% to $1,511.60 an ounce.
The Innovator IBD 50 ETF (FFTY) shed 1.9% in today's stock market.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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