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Dow Jones Industrials, Small Caps Lead Stock Losses

The stock market indexes closed off session lows Thursday but still lower, as the Dow Jones Industrial Average and small caps showed the weakest action.

The Dow Jones industrials fell 0.5%, the largest decline among the major indexes. Caterpillar (CAT) contributed to its lagging performance. The heavy equipment maker fell 2% and is back below the 140.72 buy point of an undefined pattern.

Caterpillar is having a hard time staying above the buy point since it first topped the entry on Monday. Today's drop appeared to be related to news that China is getting cold feet about signing a long-term trade agreement with the U.S.

The Nasdaq composite fell 0.1%. Invesco QQQ Trust (QQQ) ETF, which tracks the big-cap Nasdaq 100, actually rose 0.1% as major stocks it tracks such as Facebook (FB) performed well. The S&P 500 lost 0.3%, erasing most of its gains for the week.

The Russell 2000 fell 0.7%, and small caps did not outperform the past two days the way they did earlier in the month.

Volume was higher on the Nasdaq and lower on the NYSE compared with the same time on Wednesday, early data showed.

IBD 50 Outperforms Dow Jones Industrials

Innovator IBD 50 ETF (FFTY) fell less than 0.1%, a gentle decline. Two stocks — Tempur Sealy (TPX) and Universal Display (OLED) — carried the IBD 50.

Tempur Sealy jumped to new highs after a strong earnings report late Wednesday. The mattress company is on IBD Leaderboard. Universal Display also surged on a good earnings report. It climbed back above the 50-day moving average but still needs work to reach a buy point.

Other earnings reports caused breakouts Thursday.

Cirrus Logic (CRUS) soared past the 60.10 buy point of a base-on-top-of-base formation. Volume was well above normal levels after the chip company breezed past earnings expectations. EPS rose 44% and sales climbed 6%, the first quarter of rising revenue since the June 2017 quarter. The relative strength line hit new highs, a good sign.

LKQ Corp. (LKQ) shot out of a cup-with-handle base after the company beat profit views. The supplier of recycled auto parts raced past the 32.24 buy point of a handle and also past the 33.27 buy point of a cup entry, best seen on the weekly chart.

NuVasive (NUVA) gapped past the 69.20 buy point of a base in heavy volume. Shares of the medical products company remain in buy range to 72.66.

Amgen (AMGN) rose above the 212 buy point of a cup without handle as shares continued to climb since the biotech giant reported earnings Tuesday. But volume was modestly below average.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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