Nasdaq Slides To Bear Market Threshold

The Nasdaq fell to bear market status late Thursday morning, as the tech-leaning index traded 20% off its August high. A 20% drop is the traditional definition of a bear market.


The Russell 2000 slid 1.6%. The Nasdaq lost 1.8%, while the S&P 500 and the Dow Jones industrial average dropped 1.2% and 1.3%, respectively.

Volume was higher on both major exchanges compared with the same time yesterday. A new threat of a federal government shutdown sent stocks lower.

In the IBD 50, a list of top stocks in terms of fundamentals and technicals, Kirkland Lake Gold (KL) added 1.3%. The stock broke out this month and remains in the 5% buy zone. Kirkland is an August 2017 initial public offering.

Other Gold Miners

Another gold stock setting up for a possible breakout is Barrick Gold (ABX). The stock rose 4% Thursday and is trading near a 14.20 buy point in a flat base.

Meanwhile, Newmont Mining (NEM) rallied 5% in fast trade.

Blue chips were mostly down. In the 30-component Dow, Walmart (WMT) sank 3%, leading the losers. Caterpillar (CAT) reversed lower to a loss of 1%.

In the large-cap S&P 500, Conagra Brands (CAG) fell 11% in heavy volume. The company reported quarterly earnings that topped the Street’s consensus number. But Conagra missed on revenue and offered weak guidance.

Oil stocks fell as light sweet crude chopped off 3.5% to $46.47 a barrel. Crude oil is trading about 40% off its early October high.

Bear Market Lineup

Bears have already driven key sectors or industry groups into their own bear markets. The Innovator IBD Fund (FFTY) is nearly 32% off its high; the Philadelphia semiconductor index, 23%; the small cap Russell 2000, 24%; oil and gas drillers, 43%; banks, 27%; cement, 36%; and construction and mining machinery, 41%.

Defensive groups have had mixed success dodging the bear. The soap group is down 8%; soda, 13%; tobacco, 31%; electric utilities, 6%; diversified utilities, 5%; and packaged food, 8%.

With the stock market in an ugly correction, cash is looking like the most attractive investment choice.

Financial Data

In economic news, first-time jobless claims came in at 214,000 vs. the consensus view of 220,000.

The Philadelphia Fed business survey missed badly in December. The gauge hit 9.4, well under estimates for 16.5. The survey measures manufacturing conditions.

Leading indicators for November rolled in at 0.2%, above the consensus estimate of zero.


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Originally posted 2019-09-19 23:28:38.


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