Key market indexes fell to session lows Thursday afternoon, as the Dow Jones Industrial Average lost nearly 400 points and the Nasdaq reversed lower.
The Dow Jones industrials fell 1.3%, the S&P 500 also slid 1.2%, and the Nasdaq edged 0.7% lower in the stock market today. Small caps tracked by the Russell 2000 gave up 1.6%. Volume was mixed, lower on the NYSE but higher on the Nasdaq vs. the same time Wednesday.
First-time unemployment claims for the week ended Nov. 7 came in at 709,000, the Labor Department reported. That was 48,000 lower than the prior week’s 757,000 and Econoday’s forecast for 737,000 jobless claims.
Stocks turned lower as Senate Republican Leader Mitch McConnell said he’s not interested in “dramatically larger stimulus” regarding a coronavirus aid bill. Meantime, President Donald Trump continues to make unsubstantiated claims about election fraud.
The Nasdaq has rallied 31% this year, while the S&P 500 is up 11% through Wednesday’s close. The Dow Jones index is up 3% and the small-cap Russell 2000 is up 4%. All four are back above their 10-week moving average.
It’s been a volatile few weeks. On Sept. 30, the IBD stock market outlook was upgraded to “confirmed uptrend” from “market in correction.” But on Oct. 23 the outlook was downgraded to “uptrend under pressure” as stocks sold off.
Last Wednesday, after Election Day, the market outlook returned to “confirmed uptrend” as the major indexes staged big rallies. That gives the green light to buy leading stocks that are breaking out of solid bases.
Covid-19 Update
Meantime, Covid-19 cases continue to rise globally. Worldwide coronavirus cases have topped 52.6 million, with more than 1.29 million deaths, according to Worldometer. In the U.S., confirmed cases since the beginning of the pandemic have now surpassed 10.7 million, with the death toll close to 248,000.
As the race toward a coronavirus vaccine continues, Moderna (MRNA) rose 5% in heavy trade. The biotech stock is about 10% away from a 95.31 buy point of a cup base, according to MarketSmith chart analysis.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, on Wednesday predicted Moderna’s coronavirus vaccine would prove just as effective as Pfizer’s (PFE). On Monday, Pfizer and partner BioNTech (BNTX) said their Covid-19 vaccine was more than 90% effective in a Phase 3 study.
Dow Losers And Winners
Intel (INTC), down 3.4%, was the Dow’s biggest loser. Apple (AAPL) on Tuesday introduced its first Mac computers with processors the iPhone maker designed itself instead of those supplied by longtime partner Intel. Intel is trading well below its 50-day and 200-day moving average lines and about 35% off its 52-week highs.
Apple climbed 0.6%, extending Wednesday’s 3% advance, before reversing to a slight loss. The stock is working on the right side of a base with a 138.08 buy point as it finds support along the 50-day line. It could offer an early alternative entry at 125.49.
Disney (DIS), which reports quarterly results after the close, was 1.7% lower. Analysts expect Disney to swing to a loss of 68 cents a share from year-ago EPS of $1.07 as revenue falls 25% to $14.34 billion, according to Zacks Investment Research. Disney stock has slipped back into buy range from a 131.46 entry of a double-bottom base. But buying stocks before earnings can be risky.
Among other blue chips, UnitedHealth (UNH) rose 1.1%, while Merck (MRK) and McDonald’s (MCD) and seven other blue chips gave up more than 2% each.
Gold miners, software and biotech stocks led among IBD’s 197 industry groups, while utilities, banks and building-related stocks lagged.
China Stocks Soar
Several China stocks reported earnings. IBD Leaderboard stock Pinduoduo (PDD) soared 21% after its earnings and sales beat views early Thursday. Shares are about 30% extended from a 98.30 buy point.
Tesla rival Xpeng Motors (XPEV) surged 28% to a new high after reporting mixed Q3 results. The carmaker sees Q4 deliveries of 10,000 electric vehicles, up 211% vs. a year ago. Shares are well extended from a 23.20 early buy point.
Tencent (TCEHY) gapped up and rose 4% in heavy trade after the China internet giant reported strong earnings and sales. Shares are nearly extended from a 73.05 buy point of a flat base.
Over in the IBD 50, China’s Futu Holdings (FUTU) rose 5% in heavy volume, on track to extend its win streak to seven. The stock is about 5% away from a 41.09 buy point of a cup base.
Digital Turbine (APPS) gained 4% to extend its rebound after testing its 50-day on Monday. ServiceNow (NOW), Thermo Fisher Scientific (TMO) and West Pharmaceuticals (WST) added about 2% each.
The Innovator IBD 50 ETF (FFTY) gave up 0.6% as Big Lots (BIG), Horizon Therapeutics (HZNP) and Etsy (ETSY) weighed.