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Nasdaq Leads Drop, But Bears Doze; IBD 50 Stock Jams

Angst over the growth prospects of major economies around the world sparked selling in U.S. stocks today. Yet the major indexes still advanced for the week amid a Day 7 follow-through that took place on Wednesday. IBD 50 stocks generally did well, but some companies showed volatile action after quarterly results.




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As megacap techs such as Apple (AAPL) dropped 1.9% and Netflix (NFLX) dove 4.5%, investors sought bargains in the retail, consumer and select cyclical sectors. For instance, amid the new technical bear market in crude oil, IBD’s U.S. oil and gas exploration group actually rose 0.7% for the day and finished the week up 2.7%. (To see the daily performance of the entire list of 197 IBD industry groups, go to IBD Data Tables within the Stock Lists on main navigation bar of Investors.com.

Both Apple and Netflix are carving normal-looking bases so far after huge run-ups since early 2017.

The Blue Chips Win Big

The Dow Jones industrial average fared best among the major indexes in the stock market today. The 30-stock blue-chip gauge fell almost 0.8% but still gained nearly 3% for the week.

That followed a key confirmation of a change in the stock market trend on Wednesday after the U.S. midterm elections. The Dow, bolstered lately by strength in its tech, consumer and health care-related names, also ended the week above its 50-day and 10-week moving averages.

The Nasdaq composite dropped more than 1.6% under the weight of renewed selling in FANG stocks. The S&P 500 dropped 0.9%. Both indexes still ended the week higher, with the Nasdaq up 0.7% and the S&P 2.1%. The Russell 2000 slumped 1.8%.

Volume fell on the Nasdaq but jumped sharply on the NYSE, according to early data.

The Dow Jones utility average sank 0.7%, cutting its year-to-date rally to just over 2%.

Strength In The IBD 50

However, the IBD 50 continues to harbor dividend-rich income plays including Medical Properties West (MPW), one of the best performers for the week.

The midcap hospital operator, ranking No. 14 in the IBD 50 through early Friday trade, edged up 0.8% and finished the week ahead by 9%. At 16.72, the member of IBD’s property REIT group has now lifted more than 8% past a 15.34 correct buy point in a tightly formed flat base.

MPW has scored solid revenue increases of 32%, 40%, 34%, 31%, 21% and 12% vs. year-ago levels in the past six quarters. The stock’s annualized yield of 6% smashes a 1.9% yield for the S&P 500.

Innovator IBD 50 (FFTY) fell 1.9%, cutting its weekly rally to around 0.3%. FFTY gained 34% in 2017. Right now, the ETF remains below its 50- and 200-day lines.

On the downside, Globus Medical (GMED), Atlassian (TEAM), Kirkland Lake Gold (KL) and Brooks Automation (BRKS) all dropped 4% to 9% for the week. Kirkland Lake is trying to bottom out and find institutional buying support near the 200-day moving average. In the prior week, the Canadian gold miner issued strong Q3 results (EPS up 71%, sales up 26% to $222.7 million).

As noted in a Friday earnings update, Globus posted a 30% jump in third-quarter profit to 39 cents a share but noted that revenue growth slowed on seasonal trends. Q4 profit is seen flat at 38 cents a share.

IBD Leaderboard Update

In Leaderboard, Lululemon (LULU) joined a decline among luxury-brand apparel firms, but its 3% drop came in volume that was significantly below average. Over the past six weeks, the Vancouver-based yogawear leader has corrected in normal fashion from a 164.79 all-time high.

Lululemon joined the Leaders list on Feb. 7 and finished that week at 77.15. At the time, it triggered a follow-on buy point by testing institutional buying support at the key 10-week moving average.

Analysts forecast Lululemon to post a 23% jump in earnings to 69 cents a share in the October-ended fiscal third quarter.

Leaderboard currently highlights 11 names on its Leaders list as well as a watch list of four names. If the market uptrend remains intact, these four highly rated stocks have a high potential of staging a successful breakout.

Please follow Chung on Twitter at @IBD_DChung for more on CAN SLIM-quality stocks and financial markets.

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