Bears Slap Stocks At Open, Then Deepen The Losses

Bears followed up on the previous session’s weakness, knocking the indexes down 1% to 1.5% Friday in the first 10 minutes of trade. Bulls tried to recover but saw the losses deepen.


In late morning trade, the Nasdaq was down 1.4%. The S&P 500 and the Dow Jones industrial average fell 1.5% and 1.8%, respectively. Small caps did better: The Russell 2000 eased 0.3%.

Volume fell modestly on both major exchanges vs. the previous day’s pace.

Missing Breakouts

For the most part, breakouts were missing. Bulls had to look outside the U.S. exchanges.

Poland-based insurer Pzu Group tried to clear a cup-with-handle but couldn’t get it done. Brazil-based Iguatemi Empresa Shopping Centers inched over a cup with handle but then retreated. Germany-based utility RWE sailed to a new high as it broke out.

IBD 50 stocks were about evenly split between gainers and losers. North Carolina-based medical services provider Syneos (SYNH) rose 0.7% in heavy volume but remains under the 200-day moving average.

On the losing side, Adobe (ADBE) gapped down 5% in heavy trade after its earnings report. Upscale apparel retailer Canada Goose (GOOS) fell 3%; and recent breakout Kirkland Lake Gold (KL) dropped 3.5% in fast turnover, on track to end an 11-day win streak.

Blue chips were mostly down in the Dow Jones industrial average. The day’s worst performer in the 30-component Dow was Johnson & Johnson (JNJ), off 7.5%. Johnson & Johnson sank after Reuters said research shows the company knew for years that its baby powder contained asbestos. A lawyer for the company said Reuters’ findings were false.

Other blue chips skidding included Walgreens Boots Alliance (WBA), off 4%; and Apple (AAPL), down 2%. Volume was above average for all three.

Starbucks Lowers Guidance

Coffee giant Starbucks (SBUX) gapped down 5% at the open and then trimmed the loss by about half in heavy volume. The company lowered guidance, changing its take on long-term growth from 12% to 10%. Starbucks expects to add 6,000 stores in China over the next four years. But China’s economy appears to be softening. In November, retail sales in China showed the slowest growth in 15 years.


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Originally posted 2019-09-19 23:28:14.


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