Nasdaq, S&P 500 Break Key Support To Cap Week With Losses

The S&P 500 and Nasdaq closed below their 50-day moving average lines Friday, as stocks headed south amid heightened trade concerns.




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The Nasdaq led the sell-off with a 1% drop. The S&P 500 shed 0.6% and the Dow Jones Industrial Average gave up 0.4%. All three indexes closed at or near session lows after a report that efforts to set up new talks between the U.S. and China had stalled.

Small caps fared even worse, with the Russell 2000 off more than 1.2%. Preliminary data showed higher volume on both the NYSE and Nasdaq vs. Thursday.

For the week, the Nasdaq lost 1.1%, closing below its 10-week moving average for the first time since early January. The S&P 500 followed suit with a 0.7% loss, while the Dow Jones index dipped 0.6% to test its 40-week line.

Dow Inc. (DOW), down 4%, was the biggest loser on the Dow Jones industrials. Caterpillar (CAT) dropped 3%, while Intel (INTC) and 3M (MMM) gave up more than 1.4% each. Intel has tumbled 24% from its April 17 high, breached its 50-day and 200-day lines, and is currently seeking support near the 45 level.

Automakers, chips and oil-related stocks led the downside among industry groups in the stock market today. Retail, managed care and computer hardware makers advanced.

Among other chipmakers besides Intel, Diodes (DIOD) sank nearly 8% to breach its 200-day line. Qorvo (QRVO) tumbled 6% to a three-month low. ON Semiconductor (ON) and Skyworks Solutions (SWKS) shed 5% apiece.

Declining chip designers included Broadcom (AVGO), Nvidia (NVDA) and Monolithic Power Systems (MPWR), down more than 2% each.

Tough Day For Chip ETFs

As a result, chip ETFs had a bad day. VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) gave up about 2% each. Both funds slid below their 50-day lines this week and are 12% off their highs.

In the computer hardware space, Cray (CRAY) gapped up and surged 22.5% to a two-year high in crazy volume. Hewlett Packard Enterprise (HPE) is buying the Seattle-based supercomputer maker for $35 a share in a $1.3 billion deal. The acquisition will make Hewlett a stronger rival to IBM (IBM), analysts say. Hewlett shares climbed 0.6%.


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Over in the IBD 50, Comcast (CMCSA) rose 0.8%, while Kirkland Lake Gold (KL) added 1.7%.

But Solaris Oilfield (SOI) sank 5% to test its 50-day line. Autohome (ATHM) gapped down and fell nearly 4%, as did KeySight Technologies (KEYS).

The Innovator IBD 50 ETF (FFTY) slid 1.1%.

Follow Nancy Gondo on Twitter at @IBD_NGondo

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