Another Rebound Nearly Dead As Stock Indexes Today Tumble

Stock indexes today were near session lows in afternoon trading as the week’s rebound is now almost entirely wiped out.




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The Nasdaq composite, S&P 500 and Dow Jones industrial average were close to undercutting Monday’s lows. Like so many other times, the market has not been able to sustain its rebound.

The S&P 500 was down 1.5% but held above support at the 2600 level. The Nasdaq composite lost 1.6% and traded below 7000, an important floor for the composite.

Small caps fared relatively better, as the Russell 2000 lost 0.9%. The small-cap benchmark is at a 52-week low, and 18.5% below its prior high.

The Dow Jones industrial average fell 1.8%. Most of the 30 components fell, none more than Johnson & Johnson (JNJ). The diversified medical company plummeted 9.5% after Reuters reported that the company knew for decades its baby powder contained asbestos. J&J said its talcum powder does not have asbestos and dismissed the accusations as false.

J&J shares fell as much as 9% below the 143.23 buy point of a breakout Nov. 7. Its drop accounted for about 100 points of the Dow’s 430-point loss Friday.

The sell-off also contributed to health care falling the most among S&P sectors. Hospital, diversified medical, managed care, home care, drug wholesale and extended-care stocks were in the bottom 12 of 197 industry groups.

Losses Friday certainly weren’t limited to health care. Declining stocks led advancers by nearly a 14-to-5 ratio on the NYSE and by 5-2 on the Nasdaq.

The energy sector continued to slump after the price of crude oil fell 2.7% to $51.16 a barrel. Oil has risen little since OPEC and Russia agreed to reduce production a week ago. Energy Select Sector SPDR (XLE), one of the largest energy ETFs, fell 1.9% and is 20% below its 52-week high.

Innovator IBD 50 (FFTY) fell 1.1%. Adobe (ADBE) was the biggest drag on the ETF. Adobe slid 6% in heavy volume after the company gave an earnings outlook lower than analysts expected.

Usually a list of top-performing stocks, a few IBD 50 stocks hit sell signals. Euronet Worldwide (EEFT), PRA Health Sciences (PRAH) and Canada Goose (GOOS) have tripped more than 8% below their buy points.

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