The stock market reduced its losses but still closed lower Thursday, while small caps surprisingly held up much better.
XThe Russell 2000 rose 0.1% for a third-straight gain, as consumer small caps helped the index beat the major indexes.
By contrast, the Nasdaq composite fell 0.7% to end a three-day winning streak that saw the composite hit new highs. At session lows, the Nasdaq fell to the lowest price since Feb. 11. The S&P 500 and the Dow Jones Industrial Average lost 0.4%.
Volume increased on the NYSE and Nasdaq, based on early figures. Oddly, breadth was more bullish than the market would suggest. Advancers topped decliners by an 8-to-5 ratio on the NYSE and by 6-to-5 on the Nasdaq.
It was hard to pinpoint the reason for a wave of selling Thursday morning, but it appeared to be related to new worries over coronavirus. Procter & Gamble warned Thursday of an impact on its sales and earnings for the current quarter due to coronavirus. It was the latest of many companies issuing virus-related warnings.
Technology, internet health care, telecom and financials were among the weakest sectors. Health Care Select Sector SPDR Fund (XLV) was down 0.6% but pared losses as it touched the 50-day moving average. With consumer stocks rising, retail was the top sector. SPDR S&P Retail ETF (XRT) jumped more than 2% and is close to the 46.67 buy point of a flat base.
Innovator IBD 50 ETF (FFTY) fell in line with the market, down 0.6%. Copart (CRPT) was the worst performing IBD 50 stock after plunging almost 7% in busy trading. Shares closed just above the 50-day moving average after the auto salvage company's quarterly results disappointed.
But Palomar Holdings (PLMR) and Albemarle (ALB) gave the IBD 50 a boost with outsized gains even though both companies missed expectations.
Palomar shares added nearly 7% and became extended from the 56.85 buy point of a cup-without-handle base. The insurance firm lagged Q4 estimates. Nonetheless, SunTrust Robinson Humphrey raised the price target to 70 from 50.
Albemarle rallied 5.6% despite fourth-quarter results late Wednesday that missed estimates. The industrial chemicals company also warned of soft pricing for lithium. Still, CFRA raised its price target on the stock to 100 from 80, Dow Jones reported.
Domino's Pizza (DPZ) soared nearly 26%, gapping above a cup-with-handle base. The company's earnings beat views, and signs are that a new strategy is bearing fruit for the pizza chain. Domino's was added to IBD Leaderboard after displaying unusual strength in today's stock market.
Hyatt Hotels (H) broke out of a flat base, clearing a 91.23 buy point in heavy volume. The company beat profit expectations and raised its dividend, proving a bright spot in the lodging industry at a time when it faces pressures from coronavirus.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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