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.


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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Originally posted 2019-09-19 23:28:12.


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