Sellers were in U.S. stocks for the second straight session Friday on the heels of a distribution day Thursday for the S&P 500 and Nasdaq composite. Microsoft (MSFT) and Apple (AAPL) were a drag on the Dow Jones Industrial Average, while Advanced Micro Devices (AMD) and Nvidia (NVDA) lagged badly in the Nasdaq 100.
XThe Nasdaq composite fell the most, down 1.8%, hurt by broad-based selling in semiconductor stocks. The S&P 500 fell 1% and the Dow Jones industrials lost 0.8%. The good news was that volume in the indexes was heavy early but trailed off the by the close. Preliminary data showed volume on the NYSE and Nasdaq coming in slightly lower than Thursday.
Tesla (TSLA) stock was impressive again, up 0.2%. It capped its 12th-straight weekly price gain. Another highflier, Virgin Galactic (SPCE), slumped 9.5%, but it's still up 17.5% for the week.
After falling 1.6% Thursday, VanEck Vectors Semiconductor ETF (SMH) fell another 2.9% Friday. It's still holding above its 50-day moving average.
The 10-year Treasury yield fell another 5 basis points to 1.47%, but it's still above the two-year yield, which is currently around 1.35%.
The stock market opened lower and worsened after Markit reported its preliminary composite purchasing managers index for February. It came in at 49.6, sharply below January's 53.1 tally, and below expectations for 52.5. Readings below 50 indicate economic contraction.
Growth Stocks Take Heat
Innovator IBD 50 ETF (FFTY) is back near its 50-day moving average after touching a new high on Feb. 5. The exchange traded fund lost 2%, hurt by weakness in Nvidia, Paylocity (PCTY) and SiteOne Landscape (SITE). All four closed with losses of more than 4%.
Several growth stocks in the MarketSmith Growth 250 faced stiff selling pressure, including Progyny (PGNY). The stock broke out over a trend line on Feb. 12, but weak action since then puts the stock in the "expectation breaker" camp. Shares crashed 11%.
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In other stock market news, gold stocks were in favor again. VanEck Vectors Gold Miners ETF (GDX) rose 3% to 30.65. It's still in the 5% buy zone after a breakout from a base with a 29.97 buy point.
Dow Jones Leaders
Microsoft fell more than 3%, notching its second straight above-average volume decline. The software giant is testing support at its 21-day moving average. Apple, meanwhile, gave back more than 2% and could be poised for a first test of the 50-day moving average after a breakout from a base in September.
Defensive stocks held up well, like Johnson & Johnson (JNJ), which rose 1%. It's testing support at the 10-week moving average after a breakout from a base in December.
Procter & Gamble (PG) also outperformed, rising 0.1%. It's still holding support as it stays in a buy range from a 125.87 buy point.
Coca-Cola (KO) also did well in the Dow Jones, up 0.7%. Shares hit an all-time high even after the company said first-quarter earnings would be hurt by the coronavirus outbreak.
UnitedHealth (UNH) was another strong stock in the blue-chip space. The managed-care firm slipped 0.2% after falling 1.1% intraday.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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