Dow Jones Tumbles 617 Points As Stock Indexes Break Support

Stocks got slammed across the board as China upped the ante on the U.S.-China trade war by retaliating with a fresh round of tariffs.


The Nasdaq led the rout with a 3.4% drop, while the Dow Jones Industrial Average and S&P 500 each tumbled 2.4%. Small caps didn’t get spared either as the Russell 2000 sank 3.2%. Preliminary data showed volume running slightly higher on the NYSE but lower on the Nasdaq vs. Friday.

The Dow Jones index breached its 200-day moving average for the first time since Feb. 8, while the S&P 500 and Nasdaq closed below their 50-day lines for the first time since mid-January.

The Dow was a sea of red as all but one (Procter & Gamble (PG)) of the 30 component stocks declined. Apple (AAPL), down 6% in above-average volume, weighed on all three major indexes. Shares gapped down below the 50-day moving average for its first close below the support line since Jan. 29. They’re now 6% below a 197.79 buy point of a cup with handle.

China woes are weighing on Apple stock. The iPhone maker could face slower sales in China as the trade war intensifies, while a tax on Apple products could eat into profits.

Boeing (BA) shed 5% to a four-month low. Chinese newspaper Global Times’ editor speculated that China could “reduce Boeing orders” amid the trade war, according to CNBC.

Other big Dow Jones losers included Dow (DOW) and Caterpillar (CAT), which gave up more than 4% each.

Networking, chip and steel stocks saw the biggest sector declines in the stock market today. Gold miners, utilities and food were among the few gainers.

Over in the IBD 50, Funko (FNKO) led the sell-off with a 9% drop in twice its normal trade. The stock fell back to its 50-day line as it continues shaping a base with a potential 24.40 buy point.

China Stocks Get Slammed

IBD 50 China stocks got cranked as the Middle Kingdom upped the ante on the U.S-China trade war by retaliating with new tariffs on U.S. goods.

Autohome (ATHM) gapped down and sank 7% to close below its 50-day line for the first time in three months. Shares are 17% off their April 17 peak. New Oriental Education & Technology (EDU) shed 7%, also in above-average volume.

Only one IBD 50 name scored a decent gain: Kirkland Lake Gold (KL) rallied 6% as the gold miner’s shares build the right side of a cup-shaped base. The potential buy point for now is 36.84.

Gold prices rose 1% to $1,300.40 an ounce as nervous investors sought a safe haven. The SPDR Gold Shares ETF (GLD) gapped up 1%, retaking its 50-day line for the first time in more than a month, as did iShares Gold Trust (IAU). VanEck Vectors Gold Miners (GDX) found support at its 200-day line and jumped 3.2%. VanEck Vectors Junior Gold Miners (GDXJ) advanced 3%.

The Innovator IBD 50 ETF (FFTY) shed 3.9% to a two-month low in the stock market today.

Follow Nancy Gondo on Twitter at @IBD_NGondo


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Originally posted 2019-09-19 23:38:50.


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