The Dow Jones Industrial Average sold off Tuesday after Apple (AAPL) warned that its revenue may be lower than expected due to the China coronavirus outbreak. Meanwhile, Tesla (TSLA) shares rallied more than 6% after multiple analyst upgrades.
XStock Market Rally Halts On Conronavirus News
Apple shares dropped more than 3% on Tuesday, while the Dow Jones average fell as much as 1% on the news before paring losses.
Apple's announcement serves as one of the first concrete indicators for measuring the severity of the coronavirus impact on multinational businesses. However, the full economic impact of the coronavirus remains unclear.
In addition, the number of virus cases rose sharply last week. This indicates the outbreak is not yet contained.
On Tuesday, the Nasdaq declined in the morning but pared losses midday to a gain of 0.02% in late trading, while the S&P 500 traded down 0.3%. The Dow Jones industrials pared losses to 0.6%. Volume was higher compared with the same time on Friday.
While U.S. stocks mostly sold off Tuesday, the major indexes remain just off their all-time highs. The Nasdaq composite and S&P 500 hit record highs last week. Additionally, the S&P 500 has now hit a dozen record closes so far in 2020.
Among exchange traded funds, the Innovator IBD 50 (FFTY) ETF fell 0.2%. The growth-focused ETF set a new 52-week high Feb. 5. The IBD 50 ETF shows a gain of more than 5% so far for 2020.
Among commodities, Gold climbed to its highest level since 2013 as investors seek safe haven assets amid the virus-related market turbulence.
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Dow Jones Sell-Off: Apple Stock
IBD Leaderboard stock Apple dropped as much as 3.4% Tuesday morning after announcing the coronavirus caused a decrease in iPhone production for worldwide sales as well as a reduction in overall demand in China.
Shares of Apple stock remain 45% extended above their most recent 221.47 entry. The stock pared losses to 1.8% in the afternoon and remains just below its all-time high of 327.85.
Apple's announcement also triggered a sell-off in its chip suppliers. Qorvo (QRVO) dropped 2.6%, Skyworks Solutions (SWKS) fell 1.9% and Qualcomm (QCOM) lost 1.7%. Additionally, Cirrus Logic (CRUS) declined 3.2% while Broadcom (AVGO) dropped 2.2%.
Dow Jones giant and chipmaker Intel (INTC) also sold-off on Tuesday and was among the Dow's worst performers. Intel stock fell at much as 1.8% intraday. But shares still remain well extended past a 59.23 cup with handle buy point.
Stocks Breaking Out Today
One IBD Leaderboard stock breaking out today is RH (RH). The stock broke out from a base into its 5% buy zone Tuesday. Shares of RH stock passed the 243.77 buy point after Berkshire Hathaway disclosed late Friday that it raised its stake in RH by 41% to 1.71 million shares. RH's Relative Strength Rating remains strong at 97 out of 99, alongside its near-perfect Composite Rating of 98.
Tesla rose nearly 6% on news of analyst upgrades. Shares of Tesla stock rose as much as 7.5% to 860 in morning trade after Morgan Stanley raised its price target to 1,200 from 650. A consolidation in Tesla stock was to be expected after surging as much as 168% above a 361.30 cup-with-handle buy point.
Ross Stores (ROST) is also breaking out Tuesday. Shares of Ross edged up into a 5% buy zone, before dipping back below. The stock is trying to break out above a flat base with 122.72 buy point. Ross stock maintains a 95 out of 99 Composite Rating and 82 RS Rating.
Follow Fox on Twitter at @foxonstocks for more market insight.
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